This summer, Norwegian Air filed a $1 billion lawsuit against Boeing due to losses incurred from the grounding of the 737 MAX. The airline, which just last week entered protection from creditors under Irish law, said that the manufacturer’s presentation of the aircraft had been based on “a pack of lies.” Boeing is now seeking to dismiss the lawsuit, which is up for hearing next month.
In June this year, low-cost carrier Norwegian, fighting for its survival, canceled orders for close to 100 Boeing aircraft; 92 737 MAXs, and five 787 Dreamliners. Simultaneously, the budget airline launched a lawsuit against the manufacturer involving 18 Boeing 737 MAXs. Norwegian had already taken delivery of the unfortunate jets but stated that it had been unable to use them to due to the model’s protracted grounding.
$1 billion for “pack of lies”
According to aeroTELEGRAPH, the carrier stated in its lawsuit that it was based on “gross negligence, fraud and breach of contract by Boeing,” and that the manufacturer’s presentation of the aircraft to Norwegian had been “a pack of lies.” The airline is claiming economic loss and seeking compensation of $1 billion.
Late last week, Norwegian received interim protection from its creditors under the auspices of the Irish High Court. Now, the Irish Times reports that Boeing is seeking to have Norwegian’s lawsuit dismissed.
Case due in court on December 15th
Norwegian claims to have lost at least $185 million in operating profits in 2019 due to the aircraft’s grounding. The airline claims this was a large part of the reason it found itself in financial trouble even before the crisis hit in March this year. The lawsuit also includes maintenance agreements with Boeing.
Now the American planemaker is looking to dismiss, or at the very least, stall the suit. A court in the state of Illinois is meant to hear the issue on December 15th.
This is eight days after the case of Norwegian’s Irish-registered Norwegian Air International, Arctic Aviation Assets, Drammensfjorden Leasing, Lysakerfjorden Leasing and Torskefjorden Leasing is due back before the court in Dublin. On December 7th, it will decide if the appointed interim manager, Keiran Wallace, will be given 100 days to come up with a rescue plan.
Bankruptcy would mean billions of dollars in deficit
Meanwhile, to liquidate the airline is expected to leave a $7 billion deficit. This would effectively eliminate any chance of creditors regaining what the parent carrier, Norwegian Air Shuttle, and its subsidiaries owes them. This amounts to about $5.2 billion, with the Irish leasing companies accounting for $4.6 billion.
Industry analysts say that while Norwegian’s situation is precarious to say the least, the airline still has a chance of survival if it can reduce its fleet, drop future aircraft orders, and gain some new financing. Down to operating a few, subsidized domestic routes in Norway, one billion dollars could go some way towards seeing Norwegian hang in there into the new year.
What do you think, should Boeing compensate Norwegian over the MAX? Let us know in the comments.