Last year, Norwegian Air Shuttle entered bankruptcy protection both in Ireland and in Norway. Now as the airline undergoes a major restructuring process, management at the airline are looking at ways to cut its overall fleet size and minimize its cash burn while managing its ongoing debts. Now lawyers on behalf of Airbus and Norwegian Air have announced today, February 24th, that they have been able to reach an agreement that would see the Norwegian carrier terminate its agreement with the European aircraft manufacturer.
Despite having an all Boeing fleet, Norwegian Air did sign an agreement with Airbus for 100 jets back in 2012, which included 30 of the Airbus A321 long-range aircraft type. Since then this order has been revised several times and according to the court papers filed in the Irish High Court on Wednesday, Norwegian Air Shuttle has agreed to cancel its revised order of 88 Airbus aircraft. According to the Irish Times, Airbus will keep all of the cash payments that Norwegian Air has already paid to the aircraft manufacturer and the aircraft manufacturer will also receive $850,000 (€700,000) in compensation for the purchase agreement being terminated, a small price to pay for not receiving a single aircraft.
However, Norwegian Air isn’t just in talks with Airbus about terminating deliveries of new aircraft. The Norwegian airline is currently in ongoing talks with US aircraft manufacturer, Boeing. Norwegian Air hasn’t had it easy when it comes to its Boeing fleet. The carrier encountered problems with its fleet of Boeing 787 aircraft, and more recently, the Boeing 737 MAX grounding. The airline has ordered almost US$10 billion worth of planes in recent years most of which are set to be delivered from 2020 to 2027.
last year, Norwegian Air decided to terminate its remaining order of 97 aircraft with Boeing citing the drop in revenue and travel demand from the pandemic with the Seattle-based manufacturer contesting the airline’s decision to do so. At the start of this, Norwegian Air announced that it will be exiting from the long haul market and will be refocusing its efforts on the short-haul operations. As the airline begins to return its Boeing 787 fleet back to its lessors, Norwegian Air Shuttle is still in talks with Boeing about compensation for the groundings of the Boeing 787 and 737 MAX as well as its disputed terminated aircraft order.
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