Norwegian Air Shuttle ASA said it is canceling its orders for 92 of Boeing Co.’s troubled 737 MAX jets, threatening to add to the U.S. planemaker’s mounting financial strain.
The announcement by the discount European carrier on Monday came as Boeing’s long-troubled jet began a series of regulatory test flights needed for the aircraft to again carry passengers after two fatal crashes. The MAX has been grounded since the second crash in March 2019.
Norwegian said that it hasn’t been able to reach an agreement with Boeing over compensation after the grounding of its MAX fleet disrupted the carrier’s operations and caused significant financial losses. The airline said it had 18 MAX aircraft at the end of last year.
A Boeing spokesman declined to comment on negotiations with Norwegian. “As with many operators dealing with a very challenging time, we are working on a path forward,” he said.
Norwegian said it would also cancel orders for five wide-body 787 Dreamliners due to reliability problems related to Rolls-Royce Holdings PLC engines that power those aircraft. The engine maker has said it was working to fix the problems and improve reliability.
The coronavirus pandemic has wreaked havoc on Boeing’s customers as governments around the world ordered would-be passengers to stay home and closed their borders. Globally, carriers have slashed payrolls and scaled back operations while looking for ways to stockpile cash. Airlines have canceled orders for new jets as they face significantly reduced demand for air travel.
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Boeing customers had already canceled a total of 313 MAX orders so far this year, in some cases converting those orders into purchase agreements for other aircraft.
Before the pandemic, Boeing’s order book for MAX aircraft took a hit last year from the collapse of India’s Jet Airways Ltd. in April and the resulting loss of 125 orders from that airline.
The MAX is the latest version of Boeing’s workhorse single-aisle passenger jet. Regulators around the globe grounded after two accidents tied to a faulty flight-control system claimed a total of 346 lives.
Air-safety regulators and Boeing for more than a year have been grappling over fixes to the MAX’s software, among other changes, leading to a protracted regulatory-approval process to allow the aircraft to fly again with passengers. Certification flight tests, a key step toward approving the plane to resume commercial service, began on Monday.
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