The Scandinavian airline has announced the cancellation of 97 planes, along with planned legal action against Boeing.
Following drastic restructuring to stay in business following the recent health crisis, the new-look Norwegian is making even more substantial changes.
Last week it announced the resumption of several routes within Norway and short-haul routes in Europe. Now, the struggling airline is taking longer-term action.
In an announcement to Oslo Stock Exchange, Norwegian has said it will cancel a total of 97 aircraft from Boeing. That's five Boeing 787 Dreamliners and 92 Boeing 737 Max aircraft.
In addition, the airline notifies of planned legal action against the American manufacturer. Norwegian wants to recover pre-payments made in connection with delivery of the aircraft. They also demand compensation for losses made due to the 737 Max grounding and the engine problems on the 787 last year.
The grounding of the 737 Max
In the spring of last year, the entire fleet of Boeing 737 Max aircraft was grounded worldwide. This followed two tragic plane crashes on Lion Air and Ethiopian Airlines with the relatively new model.
Norwegian had planned the 737 Max to be an integral part of its future fleet. At the time of its grounding, the airline had 18 of the aircraft. But there were an additional 92 on order to fulfil the airline's previously aggressive growth strategy.
The fleet remains grounded. In its stock exchange notification, Norwegian claimed the grounding has “disrupted operations and caused significant losses.”
Engine problems plagued Norwegian
But it wasn't just the 737 Max issues that caused Norwegian headaches. The airline also suffered from technical problems with the engines on the 787 Dreamliner, the aircraft of choice on Norwegian's long-haul flights.
Last summer, engine fragments fell from the sky on to an Italian town, forcing the Dreamliner to make an emergency landing in Rome. The falling debris caused damage to property in the coastal area, while one person reported mild burns.
Later in the year, a Boeing 737-800 also encountered engine trouble and had to make an emergency landing in Ålesund. However, most of the long-running engine issues have been with the Rolls-Royce Trent engines on the Dreamliner.
The stock exchange announcement reads: “Norwegian’s Rolls-Royce Trent 1000-powered 787 aircraft have suffered from long-running reliability issues that have affected reliability and resulted in premature and unplanned maintenance, which has disrupted the Company’s operations and caused further significant losses.”
NRK reported that the manufacturer “did not have enough capacity to produce enough spare parts for a long time, so the queue for maintenance became long.”
Read more: Norwegian's Tail-Fin Heroes
Bad times for Boeing
The exact amount of refunds and compensation requested by Norwegian has not been disclosed.
However, Boeing says the total list price of the cancelled planes amounted to 122.34 billion Norwegian kroner, around $12.65 billion.
That being said, airline customers negotiate significant discounts on bulk orders. How much Norwegian had actually agreed to pay has not been disclosed.
Boeing told E24 that they do not want to comment on commercial discussions they have with customers. “Norwegian Air Shuttle is a long-time Boeing customer. As with many other players who are going through a challenging time, we are working to find a way forward,” said a company spokesperson.
Norwegian's CEO Jacob Schram has previously said the company would consider switching to Airbus if Boeing could not resolve its issues.
