Norwegian Air Shuttle ASA has notified Boeing that it is terminating purchase agreements for all 97 of its remaining jets on order with the U.S. planemaker.
The cancellation covers 92 of Boeing’s 737 MAX planes and five 787 Dreamliners as well as related service agreements, Norwegian said in a statement Monday.
According to market pricing data from aircraft valuation company Avitas, the orders were worth about $5.5 billion after standard discounts.
Talks with Boeing have “not led to an agreement with a reasonable compensation,” Norwegian said in the statement. In addition, the airline said it filed a legal claim seeking the return of predelivery payments for the planes plus compensation for losses related to the MAX’s long grounding.
For Boeing, the termination roils a key customer relationship, even if Norwegian’s financial troubles had cast doubt on its ability to take all the planes. Norwegian converted debt to equity and sold new shares last month in order to get access to government loan guarantees in its home market, saving it from collapse after the COVID-19 crisis gutted demand for air travel.
Boeing couldn’t immediately be reached for comment.
The MAX has been grounded since March 2019 following two deadly crashes. Boeing on Monday completed the first test flight in a process to regain certification for the Max from the U.S. Federal Aviation Administration.