Norwegian Air orders 50 Boeing MAX aircraft, resolving dispute

A mannequin of Boeing 737 Max airliner is seen displayed on the China Worldwide Aviation and Aerospace Exhibition, or Airshow China, in Zhuhai, Guangdong province, China September 28, 2021. REUTERS/Aly Tune

OSLO, Might 30 (Reuters) – Norwegian Air (NAS.OL) has agreed to purchase 50 Boeing (BA.N) 737 MAX 8 plane and secured choices for an additional 30 of the planes at an undisclosed worth, ending a contract dispute between the 2 companies, the price range provider mentioned on Monday.

The deal is a lift for Boeing, anchoring long-standing buyer Norwegian to the U.S. aircraft maker after the Oslo-based airline earlier this yr mentioned it will contemplate switching to rival Airbus (AIR.PA). learn extra

For Norwegian the deal marks a return to plane possession after it was pressured to resort to leasing offers throughout chapter proceedings that rescued the corporate final yr. learn extra

The deal consists of compensation to Norwegian as settlement for earlier disputes over MAX and Dreamliner plane deliveries and technical points, triggering a monetary achieve of two billion Norwegian crowns ($212.2 million), the airline mentioned. learn extra

Norwegian’s shares jumped 8.4% by 0857 GMT, outperforming a 0.3% achieve in Oslo’s benchmark index (.OSEBX). The shares have now risen about 12% because the airline was recapitalised a yr in the past.

The battle with Boeing was the only difficulty that had not been resolved throughout final yr’s restructuring of the airline, Norwegian Air Chief Govt Geir Karlsen instructed Reuters.

“This was the ultimate piece of the puzzle … it is going to terminate the lawsuits,” Karlsen mentioned.

The monetary achieve shall be booked as quickly as a deal is signed, anticipated by the tip of June, boosting the airline’s fairness.

The primary 50 plane shall be delivered between 2025 and 2028, comparable to present lease expirations, leading to a restricted internet enhance of the corporate’s present fleet.

“It is a landmark deal that units out a path whereby Norwegian will personal a big share of its fleet,” board Chair Svein Harald Oeygard mentioned.

“This can lead to decrease all-in prices and elevated monetary robustness, enabling us to additional solidify our Nordic stronghold.”

Norwegian in February instructed Reuters it was contemplating a swap to Airbus except ongoing litigation with Boeing over earlier plane cancellations was resolved in a well timed vogue.

The take care of Norwegian is Boeing’s second main European order in latest weeks for MAX plane following a take care of airways big IAG (ICAG.L). learn extra

($1 = 9.4243 Norwegian crowns)

Reporting by Terje Solsvik, enhancing by Gwladys Fouche and Susan Fenton

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