Norwegian Air clinches improved delivery schedule from Boeing

Norwegian Air agreed with Airbus and Boeing to delay deliveries of aircraft in order to cut back on its capital spending, making the most of the leverage afforded it by the disasters linked to two of the latter manufacturer's jets.

Hit by a drop in transatlantic airfares and having been left with 18 idled aircraft after being forced to ground the Boeing 737 MAXs in its fleet, the Scandinavian carrier opted to press its suppliers.

The rescheduling of the aircraft deliveries from both vendors, including 14 more 737 MAX, will allow Norwegian to pare its outlays on capital expenditure for 2019 and 2020 by $2.1bn.

On 6 February, Norwegian announced it would postpone the delivery of 12 Boeing 737 MAX 8 aircraft from 2020 to 2023 and 2024, and of four Airbus 321LR aircraft from 2019 to 2020, followed on 10 April by the announcement of further postponements, including of Airbus 320neos.

Its bargaining chip with Boeing was the result of the 737 model’s global grounding following its second fatal crash in five months, in Ethiopia.

“We have had some productive meetings with Boeing where we have discussed how we can manoeuvre through the difficulties the Max situation is causing Norwegian,” Chief Executive Officer Bjorn Kjos said a statement. He added that the financial impact of the grounding for the company may be close to $60m.

Shares of Norwegian Air rose up to 5% on Thursday but remained roughly 60% lower for the year after tumbling in January when British Airways parent IAG SA shelved a takeover approach.