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Montevideo, July 11th 2020 - 15:45 UTC

 

 

Norwegian Air Shuttle cancels purchase of 97 jets from Boeing

Tuesday, June 30th 2020 - 07:39 UTC
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Talks with Boeing have “not led to an agreement with a reasonable compensation,” Norwegian said. The aircraft are worth at least US$10.6 billion based on list prices Talks with Boeing have “not led to an agreement with a reasonable compensation,” Norwegian said. The aircraft are worth at least US$10.6 billion based on list prices

Norwegian Air Shuttle has notified Boeing that it is terminating purchase agreements for all 97 of its remaining jets on order with the US planemaker. The decision covers 92 of Boeing's 737 Max planes, five 787 Dreamliners and a related maintenance pact, Norwegian said in a statement on Monday.

The airline, which is restructuring after the Covid-19 virus decimated trans-Atlantic travel, said it also filed a legal claim seeking the return of pre-delivery payments for the jets plus compensation tied to the Max's 15-month grounding.

Talks with Boeing have “not led to an agreement with a reasonable compensation,” Norwegian said in the statement. The aircraft are worth at least US$10.6 billion based on list prices before customary discounts.

The termination roils Boeing's relationship with one of the company's largest customers in Europe, even if Norwegian's financial troubles had cast doubt on its ability to take all the planes. Norwegian converted debt to equity and sold new shares last month in order to get access to government loan guarantees in its home market, saving it from collapse after the pandemic gutted demand for air travel.

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

As cash-strapped carriers seek to halt or postpone jetliner deals, Boeing is more vulnerable to single-aisle cancellations than Airbus SE. Buyers typically have the right to walk away from deliveries that have been delayed more than a year without risk of penalties. Boeing has recorded cancellations for 313 Max planes so far this year.

Kuwaiti lesser Alafco Aviation Lease and Finance Co sued Boeing earlier this year, seeking to scrap an order for 40 Max and reclaim the US$336 million it said it had paid in advance for the aircraft.

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