Boeing has requested the dismissal of a $1 billion lawsuit taken against it by Norwegian Air over alleged contract violations in relation to its 737 MAX aircraft orders.
It comes just days after low-cost carrier Norwegian Air sought bankruptcy protection from creditors in Ireland, where many of its subsidiaries and much of its assets are held.
Earlier in the year, Norwegian filed the billion-dollar suit against Boeing, citing contract violations in excess of its requested compensation amount when it attempted to cancel an order of 92 aircraft.
The airline claimed Boeing kept the orders on its books despite the cancellation.
The US planemaker has now informed the Circuit Court of Cook County, Illinois, where Norwegian filed the initial lawsuit, that it is seeking to have all or part of the action dismissed.
The case is due to be heard on 15 December, which is eight days after Norwegian’s Irish case is due back before the High Court in Dublin.
If the Irish court confirms the airline’s protection from creditors on 7 December, KPMG partner Kieran Wallace – who Justice Michael Quinn appointed as interim examiner – will have up to 100 days to present a full rescue plan.
An independent expert report written by Ken Fennell, partner at the Dublin office of Deloitte, suggests that Norwegian has a chance of survival if it succeeds in cutting its fleet and future aircraft orders and attracts new finance.
It has been reported that a number of creditors have already begun legal action against two Norwegian Air subsidiaries, while the company awaits its day in court for bankruptcy protection.
Low-cost carrier Norwegian Air officially filed for bankruptcy protection in Ireland last week, making it potentially the biggest casualty of the COVID-19 pandemic in aviation so far.
The troubled carrier asked the Irish High court to carry out a process of examinership, which protects the group’s assets while it tries to slash its debt pile, offload aircraft and raise new capital funding as part of a restructuring.
The process could take up to five months to complete.
“Our aim is to find solutions with our stakeholders that will allow us to emerge as a financially stronger and secure airline,” said Norwegian chief executive Jacob Schram.
Schram said the company wanted to work with its stakeholders to find solutions to its financial problems and intended to save as many jobs as possible, and believes the carrier has enough liquidity to get through the examinership process.
He added, “Our intent is clear. We will emerge from this process as a more financially secure and competitive airline, with a new financial structure, a right-sized fleet, and improved customer offering.”
Norwegian will also reportedly continue to operate its current flight schedule, which is greatly reduced thanks to COVID-19, throughout the process and its shares will still be traded on the Oslo stock exchange.
Norwegian’s fate appeared to be sealed when the Norwegian government refused to give it a second bailout this year.
Ministers in Oslo stated they did not think it was a “sound use” of taxpayers’ money to prop up the low-cost airline, which appeared to enter the pandemic already vulnerable thanks to its debt-fuelled rapid expansion into long-haul international flights.
Norwegian Air said the government’s decision has left the airline with a “very uncertain future”.
