June 29, 2020 / 9:24 PM / 10 days ago

Norwegian Air cancels 97 Boeing MAX and Dreamliners, claims compensation

FILE PHOTO: Norwegian Air Sweden Boeing 737-800 plane SE-RRY lands in Riga International Airport in Riga, Latvia January 17, 2020. REUTERS/Ints Kalnins/File Photo

OSLO (Reuters) - Norwegian Air (NWC.OL) has cancelled orders for 97 Boeing (BA.N) aircraft and will claim compensation from the U.S. plane maker for the grounding of the 737 MAX and for 787 engine troubles that hit its bottom line, the Oslo-based carrier said on Monday.

The airline cancelled 92 of the 737 MAX jets, five 787 Dreamliners and so-called GoldCare service agreements related to both aircraft, just as Boeing on Monday began a crucial set of flight tests of the 737 MAX in an effort to gain regulatory approval for it to return to the skies.

“Norwegian has in addition filed a legal claim seeking the return of pre-delivery payments related to the aircraft and compensation for the company’s losses related to the grounding of the 737 MAX and engine issues on the 787,” the airline said.

Norwegian did not specify the amount it would seek to claim from Boeing, which it had been in talks with about compensation, and was not immediately available for comment.

Boeing said it was working with Norwegian on a path forward in a challenging time as it was with other operators but it would not comment on commercial discussions.

The problematic Trent 1000 engines, used on the Dreamliners, were made by Rolls-Royce (RR.L), which Norwegian has been in a dialogue with about compensation. Monday’s statement did not say whether Norwegian would file a legal claim against Rolls-Royce.

The European budget carrier, which revolutionised transatlantic travel by offering cheap fares, was struggling before the COVID-19 pandemic brought the airline industry to its knees.

One reason was the grounding of the 737 MAX in March 2019 following the second of two fatal crashes that together killed 346 people. Norwegian had 18 MAX passenger jets in its 163-aircraft fleet at the time.

Originally a small regional airline in Scandinavia, Norwegian made its breakthrough on the global stage with a multi-year order in 2012 for up to 372 aircraft, of which 222 were from Boeing and 150 from Airbus (AIR.PA).

Reporting by Gwladys Fouche and Terje Solsvik; Additional reporting by Eric M. Johnson in Seattle; Editing by Leslie Adler and Christopher Cushing

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