Norwegian Air Shuttle wants to cancel all remaining orders for the Boeing MAX 8, or in total 92 aircraft. It also notified Boeing it wants to terminate the purchase agreement for five 787-9s, the airline said in a notice published on June 29 on the Norwegian Stock Exchange.
The decision confirms Norwegian’s plan to drastically resize its operations as if hopes to survive the Covid-19 crisis. Last April, Norwegian announced an extensive restructuring and recapitalization plan that gives aircraft lessors 53.1 percent and bondholders 41.7 percent of the shares. The plan was approved by shareholders.
Norwegian has 110 MAX 8s on order. It had taken delivery of 18 aircraft before the type was grounded following the two crashes in 2018 and 2019. The 2019 annual report shows that Norwegian expected 16 deliveries in 2020, 10 in 2021 and 66 between 2022 and 2027. All these aircraft are now part of the notice of termination.
Norwegian is also seeking compensation for pre-delivery payments as well as costs resulting from grounding its 18 MAX 8s. It has been in negotiations with Boeing about this for the whole of 2019 but now says it has filed a legal claim. The 2019 annual report says Norwegian had to pay $1.5 billion in predelivery payments in 2020 and $0.6 billion in 2021.
No appetite for more Dreamliners either
The airline also wishes to terminate the purchase contract for five 787-9s. Of these, four were due this year and the fifth from 2022. Norwegian has a fleet of eight 787-9s, but their operability has been significantly restricted because of the compressor and turbine blade issues with the Rolls-Royce Trent 1000. Although Rolls-Royce has compensated numerous Dreamliner-operators for the grounding, Norwegian seeks compensation with Boeing and includes this case within the legal claim.
As more love is lost between Norwegian and Boeing, the airline also has no need to continue its GoldCare services agreement and wishes to terminate this contract too.
The announcement means Norwegian seems to stick to its fleet of 100 737-800s, although it earlier said some aircraft will be part of sale and leasebacks or returned to lessors once their contracts are up for termination. The MAX-fleet would be limited to the 18 grounded aircraft, while the long-haul fleet will be composed of the three 787-8s and 13 787-9s currently in the fleet.
The order status of the 63 Airbus A320neo’s (deliveries scheduled from 2020-2027) and 30 A321LRs (2025-2027) has not been confirmed, but it isn’t to be ruled out that Norwegian wishes to terminate agreements for these aircraft as well.