Norwegian cancels orders for 97 Boeing aircraft

Jun 30, 2020

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Norwegian Air has cancelled its plans with Boeing to purchase nearly 100 aircraft. The struggling low-cost carrier said on Monday that it’s cancelled its remaining order for 92 Boeing 737 MAX aircraft and an additional five 787 Dreamliners.

In addition to cancelling its order with Boeing, Norwegian said that it had filed a lawsuit against the aircraft manufacturer in an effort to get money back as a result of the grounded 787 and 737 MAX aircraft. Norwegian is seeking pre-delivery payments and compensation for its losses related to both the 787 and 737 MAX.

The carrier didn’t specify how much it was seeking from Boeing.

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“Norwegian has engaged in a commercial dialogue with Boeing with a view to resolving its 787 and 737 MAX issues and obtaining compensation for its losses,” the airline said in a statement. “The dialogue has [yet to date] not led to an agreement with a reasonable compensation to the Company.”

The airline has struggled with many of its aircraft from Boeing. First, the ongoing Rolls-Royce engine issues with the Boeing 787s had forced Norwegian to temporarily ground some of its long-haul Dreamliner fleet while they underwent necessary maintenance.

Related: How airlines are affected by the Rolls-Royce engine trouble on the Boeing 787

Then, the airline took delivery of its Boeing 737 MAX aircraft, which it used on some transatlantic routes for a short time. However, the carrier was forced to ground the fleet, costing it millions. And as a result, it has suspended some of its smaller-city transatlantic routes, such as those to Newburgh (SWF) and Hartford (BDL).

Norwegian cancelled the remainder of 737 MAXs three years to the day after it took delivery of the first of the order.

“We are not going to comment on commercial discussions with our customers,” a spokesperson for Boeing said in a statement. “Norwegian Air Shuttle is a long-standing Boeing customer. As with many operators dealing with a very challenging time, we are working on a path forward.”

Norwegian has 18 737 MAX aircraft currently in its fleet, though they remain grounded as a result of the aircraft’s global grounding since March 2019.

This week, amid the coronavirus-spurred downturn in travel, Boeing took a step towards relaunching the 737 MAX into commercial service. On Monday, the FAA said that it was working with Boeing on a series of recertification flights that would be used to clear the MAX for reentry into commercial service.

Related: Boeing’s 737 MAX is one step closer to carrying passengers again

Norwegian has long struggled with its finances — even before the coronavirus crisis. In 2018, strong rumors circulated that there was a chance it would shutter after reporting a net loss of 1.5 billion Norwegian kroner ($175 million USD).

In July 2019, the airline’s long-time CEO Bjorn Kjos stepped down as the head of the company. Since January 2020, Jacob Schram has taken over the role of CEO at Norwegian.

Related: Coronavirus crisis raises questions about the survival of already-struggling airlines

In response to the coronavirus, Norwegian has taken a conservative approach. In April, the company announced that it was planning to keep the majority of its operations — including long-haul and European — grounded until at least April 2021.

However, the carrier broke those plans and announced in June that it would resume some European routes as of 1 July. The resumption of long-haul routes remains on hold until April 2021.

Amid the coronavirus, the carrier got a $27 million lifeline from the Norwegian government.

Featured photo by Robert Alexander/Getty Images.

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