Boeing takes a big hit with 97 order cancellations

Norwegian

Aircraft manufacturer Boeing this week took a big hit with the cancellation of 97 jet orders by Norwegian Air Shuttle due to financial trouble facing the carrier. The news came as the FAA begun recertification test flights for the 737 MAX since the grounding 15 months ago.

Norwegian’s order consisted of 92 Boeing 737 Max jets and five 787 Dreamliners, all of which were unfilled. It was the first European airline to buy the 737 Max when it agreed in 2012 to buy 100 737 MAXs and 22 of the earlier versions of the 737.

The carrier’s financial problems predate the coronavirus pandemic with around $8 billion in debt accumulated by the end of 2019. It was seeking a debt restructuring in September of last year, but it was only in May that its shareholders approved a reorganization plan. Nearly $1 billion in debt was converted into equity to avoid bankruptcy.

Boeing issued a statement saying, “We are not going to comment on commercial discussions with our customers. Norwegian Air is a long-standing Boeing customer. As with many operators dealing with a very challenging time, we are working on a path forward.”

Norwegian’s order cancellation adds to the 322 orders that were canceled since the pandemic begun affecting air travel in February.

The 737 MAX grounding took a toll on Norwegian which has 18 in its fleet and have beed demanding compensation from Boeing since they weren’t allowed to fly.

In addition to the problems caused by the grounding of the 737 Max, Norwegian said it had problems with its 787 Dreamliner engines which “affected reliability and resulted in premature and unplanned maintenance.”

Norwegian has 37 of the Dreamliners in its fleet, and 101 of an earlier version of the 737. They are seeking the return of deposits it paid Boeing for the 97 jets.

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