General Industry

Norwegian Air And Airbus Agree Terms To End Jet Deliveries; Boeing Not Engaging With Airline's Restructuring Proceedings

By Dave Simpson
Norwegian Air And Airbus Agree Terms To End Jet Deliveries; Boeing Not Engaging With Airline's Restructuring Proceedings

Norwegian Air and jet maker Airbus have agreed on terms to repudiate the carrier's contract for new aircraft, lawyers representing the two firms told Ireland's High Court on Wednesday February 24.

In December, Norwegian won protection from bankruptcy in both Norway and Ireland, where most of its assets are registered, and is aiming to emerge with fewer aircraft and less debt as it plots a future beyond the COVID-19 pandemic.

Under a multi-year deal signed in 2012 and revised several times since, Airbus was to deliver 100 jets to Norwegian, and, according to the aircraft maker's financial filings, the company still has 88 narrow-body jets on order.

"We have agreed, judge, in the last short while, the terms of a consent order," Norwegian Air lawyer Brian Kennedy told the court.

Among the terms, Airbus will keep any prepayments it has received and will still be owed £600,000 by Norwegian, he said.


The deal comprises both Norwegian Air and its asset-owning subsidiary, Arctic Aviation, Kennedy said, although he did not specify the number of aircraft involved.

A lawyer representing Airbus confirmed to the court that the two sides have reached an agreement.

Prior to the COVID-19 pandemic, Norwegian had contractual commitments amounting to $9.55 billion for the purchase of Boeing and Airbus aircraft from 2020 to 2027, according to the carrier's financial filings.

Last June however, Norwegian unilaterally terminated its remaining orders with Boeing for 97 aircraft and sought compensation for the grounding of the Boeing 737 MAX jets and technical problems with 787 Dreamliners.

Boeing has contested the move and also made counterclaims against Norwegian, documents filed by the airline show.


Boeing Not Engaging With Restructuring Proceedings

Boeing is not engaging with Norwegian Air's restructuring proceedings in Ireland or Norway, a lawyer for Norwegian said on Wednesday February 24, which is a decision that may complicate the airline's efforts to recover from the brink of collapse.

Boeing "to date hasn't engaged in the examinership process, or the Norwegian is not anticipated that Boeing will engage in either," Brian Kennedy told Ireland's High Court.

Kennedy said that Boeing wrote to the Norwegian official overseeing Norwegian's restructuring in that country on December 28 saying that neither Boeing nor its affiliates submit to the jurisdiction of the Norwegian courts.

It is Norwegian Air's understanding that it is taking a similar position in relation to the Irish process, Kennedy said.

Boeing did not immediately respond to an e-mailed request from Reuters for comment.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.