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Boeing Losing Almost 100 Plane Orders From Norwegian Carrier, Report Says

By Howard Smith – Updated Jun 30, 2020 at 10:23AM

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Norwegian Air Shuttle ASA says it is canceling 92 orders for the 737 Max and five 787 orders.

One day after Boeing (BA -3.39%) saw its troubled 737 Max back in the air for its first recertification test flight with the Federal Aviation Administration, the company may be getting more bad news about the aircraft. A regional European carrier, Norwegian Air Shuttle ASA (NWAR.F -1.61%), is canceling a total of 97 orders with the plane maker, according to The Wall Street Journal

The cancellations include 92 of the 737 Max, and five 787 jets. The Max has been grounded since March 2019, after two fatal crashes. The Norwegian airline is also reportedly seeking compensation for related losses, since it had 18 Max aircraft as of the end of 2019, according to the report. 

airplane taking off at sunrise

Image source: Getty Images.

Boeing's issues with the 737 Max have been compounded by severe impacts on the aerospace industry from the COVID-19 pandemic. Through May, the company has received more than 600 total order cancellations in 2020, including 313 for the Max, according to the report. 

Passenger airlines are struggling to regain business as economies slowly begin to reopen, and the carriers are working to conserve cash and improve liquidity. The global airline trade group, the International Air Transport Association, estimates that passenger airlines will lose $371 billion in 2020 revenue. 

Several domestic airlines have received federal aid through the Payroll Support Program portion of the CARES Act, and are raising money in the capital markets. Airlines are also seeking compensation from Boeing for the 737 Max grounding.

A Boeing spokesman, who would not comment specifically on negotiations with Norwegian Air Shuttle, said "as with many operators dealing with a very challenging time, we are working on a path forward," according to the Journal report. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
BA
$121.08 (-3.39%) $-4.25
Norwegian Air Shuttle ASA Stock Quote
Norwegian Air Shuttle ASA
NWAR.F
$0.61 (-1.61%) $0.01

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