HEIKO JUNGE/AFP/Getty Images
- Norwegian Air told Reuters on Wednesday that it will seek compensation from Boeing for the costs and lost revenue involved in grounding its Boeing 737 Max 8 fleet.
- Norwegian Air has 18 Max jets in its 163-aircraft fleet.
- On Sunday, Ethiopian Airlines Flight 302 crashed shortly after takeoff, killing all 157 people on board.
- Both that crash and the Lion Air crash in October that killed 189 people involved a Boeing 737 Max 8 that plunged minutes after takeoff. The causes of both crashes are under investigation.
OSLO (Reuters) — Norwegian Air said on Wednesday it will seek compensation from plane maker Boeing for costs and lost revenue after grounding its fleet of 737 Max 8 aircraft in the wake of the Ethiopian Airlines crash.
"We expect Boeing to take this bill," Norwegian said in an emailed statement.
The Oslo-based airline has 18 Max passenger jets in its 163-aircraft fleet. European regulators on Tuesday grounded the aircraft following Sunday’s crash of a similar plane in Ethiopia, which killed 157 people and was the second crash involving that type of plane since October.
Boeing Chief Executive Dennis Muilenburg said on Monday that he was confident in the safety of the 737 Max in an email to employees, which was seen by Reuters.
Industry sources, however, said the planemaker faces big claims after the crash.
Norwegian has bet heavily on the ‘Max’ to become its aircraft of choice for short- and medium-range flights in coming years as the low-cost carrier seeks to boost its fuel efficiency and cut the cost of flying.
"What happens next is in the hands of European aviation authorities. But we hope and expect that our Maxes will be airborne soon," Norwegian Air’s founder and Chief Executive Bjoern Kjos said in a video recording released on social media.
"Many have asked questions about how this affects our financial situation. It’s quite obvious that we will not take the cost related to the new aircraft that we have to park temporarily. We will send this bill to those who produce this aircraft," he added.
Idle planes will add to pressures on the airline, which is making losses amid intense competition at a time when several smaller European competitors have gone out of business.
The carrier has raised 3 billion Norwegian crowns ($348 million) from shareholders in recent months and said it would cut costs as it tries to regain profitability this year.
"If this situation gets solved within the next fortnight, this will not be very serious for Norwegian," said analyst Preben Rasch-Olsen at brokerage Carnegie, adding that seasonally low demand in March likely leaves spare capacity.
"The little extra costs they are incurring, they can probably get that covered by Boeing," Rasch-Olsen said.
"But if this situation continues into the Easter holidays, or May and June, then it is a problem. They (will) need to get in new planes. And then comes the costs."
Read more: The family of Ethiopian Airlines Flight 302 captain speaks out after crash that killed 157 people
Europeans tend to book their summer holidays in May, so the grounding may not yet affect bookings for the peak season for the airline industry, the analyst said.
Meanwhile, Norwegian was maintaining its order for more aircraft of the same type from Boeing, spokesman Lasse Sandaker-Nielsen said.
Norwegian is expected to take delivery of dozens more of the ‘Max’ in coming years, raising the overall number to more than 70 by year-end 2021, according to recent company announcements.
Shares in the airline have now dropped 6.8 percent this week as investors worried about the impact of the Ethiopian crash.
They fell by 4.8 percent in early trade on Wednesday but later recovered to trade up 2.7 percent by 1246 GMT.
Norwegian canceled some flights on Tuesday, and on Wednesday it canceled at least three dozen departures, its website showed, most of which were due to fly from airports in Oslo, Stockholm and other Nordic cities.
The airline was booking passengers on to other flights and using other types of planes from its fleet to help fill the gaps.
In a separate statement, Norwegian said it would deploy one of its larger Boeing 787 Dreamliner aircraft to operate its daily route from Dublin to Stewart airport north of New York City, replacing the grounded Max.
Additional reporting by Lefteris Karagiannopoulos; Editing by Susan Fenton and Louise Heavens
More about the Boeing 737 MAX 8 and the Ethiopian Airlines disaster:
- Everything we know about Ethiopian Airlines’ deadly crash of a Boeing 737 Max 8, the second disaster involving the plane in 5 months
- Seven airlines and 5 countries have grounded the Boeing 737 Max 8 after a 2nd crash involving the plane killed 157 people — here’s who’s taken action so far
- Europe has banned the Boeing 737 MAX — a plane that has crashed twice since October
- Boeing has $400 billion in orders on the books, 80% of them are for the 737
- ‘I don’t want Albert Einstein to be my pilot’: Trump says airplanes are becoming ‘too complex to fly’ as the UK, China, and other nations ground the Boeing 737 Max 8
- A major flight-attendants union is calling on US regulators to investigate the plane involved in 2 crashes in 5 months
- These are the victims of the Boeing 737 Max 8 crash in Ethiopia
- Germany, the UK, China, and other countries have grounded the Boeing 737 Max 8 after its 2 deadly crashes — here’s who’s taken action so far
- FAA says Boeing 737 Max 8, the plane that’s crashed twice in 5 months, is still safe to fly
- Southwest has the largest exposure of all US airlines to Boeing’s 737 Max
- Elected officials are calling on the US government to ground the Boeing 737 Max 8 after the plane was involved in 2 deadly crashes
- The black box from the crashed Ethiopian Airlines flight has been found
- ‘If it’s Boeing, I’m not going’: People are freaking out about flying on the same plane that has now crashed twice in 5 months
- The family of Ethiopian Airlines Flight 302 captain speaks out after crash that killed 157 people
- A Georgetown University law student who reportedly expressed a fear of flying is among the 157 dead in the Ethiopian Airlines crash
- An Ethiopian Airlines passenger said he missed the crashed flight by 2 minutes: ‘I’m grateful to be alive’
- People of 35 different nationalities were killed in the Ethiopian Airlines crash, including 8 Americans
See Also:
- This map shows all the countries to ban the Boeing 737 Max 8, and where airlines have grounded their fleets, after Ethiopian Airlines crash that killed 157
- These airlines will likely take the biggest hit after the Boeing 737 Max was involved in two deadly crashes
- The Boeing 737 Max has come under fire after 2 deadly crashes in 5 months — but the aircraft is likely to be successful in the long-run, an aviation expert explains
Source: Business Insider – feedback@businessinsider.com (Reuters)