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Norwegian Air Cancels Boeing Orders, Seeks Return Of Pre-Delivery Payments: Report

Norwegian Air Cancels Boeing Orders, Seeks Return Of Pre-Delivery Payments: Report

Norwegian Air Shuttle ASA (OTC: NWARF) is canceling orders of 97 Boeing Co (NYSE: BA) aircraft and filing a claim for compensation for the non-operational 737 MAX and 787 planes.

What Happened

Norwegian Air, a budget airline based in Oslo, Norway, canceled orders of 92 MAX aircraft, five 787 Dreamliners, and service agreements related to both types of planes on Monday, reported CNBC.

The airline said, “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.”

Why It Matters

Norwegian placed a multi-year order in 2012 for 222 Boeing aircraft, and before the grounding of the MAX series operated 18 such planes, noted CNBC.

Before the pandemic, the European carrier had its focus on transatlantic travel, but the airline has been struggling since COVID-19 spread globally. 

Boeing began running test flights for 737 MAX in an attempt to secure recertification from the United States Federal Aviation Administration on Monday. 

Deadly crashes in 2019 involving the 737 MAX had killed 346 people in Indonesia and Ethiopia.

FAA has taken no decision on letting MAX planes back in the air, and the test flights form a part of the larger review the agency is conducting.

Boeing shares closed over 14% higher on Monday on the news of FAA flight tests recommencing

Price Action

On Monday, Norwegian Air OTC shares closed 0.87 lower at $0.285. The company’s shares closed 3.67% lower at $0.27 in Oslo.

Boeing shares traded 1.44% lower at $191.68 in the after-hours session on Monday. The shares had closed the regular session 14.40% higher at $194.49.


Related Articles (BA + NWARF)

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