Escalating beyond harsh words, Norwegian filed a lawsuit against Boeing on Monday alleging “gross negligence, fraud and breach of contract.”
Lawsuit Details: Norwegian Sues Boeing
Norwegian recently cancelled orders for 97 aircrafts, a mix of 92 Boeing 737 MAX and five 787 Dreamliners, at a list price of nearly $13 billion dollars. The lawsuit, filed in a federal district court in Illinois, alleges “gross negligence, fraud and breach of contract.”
“Instead of delivering what they promised, Boeing has deliberately misled and omitted information, shown gross negligence and clumsy production, and made aircraft with significantly impaired value and utility, which in the case of the MAX aircraft had tragic and fatal consequences.”
Norwegian is seeking a refund of its deposit, damages, additional compensation for the what it calls shoddy and “defective” aircraft, and legal fees. In addition to the worldwide grounding of the 737 MAX, Norwegian’s 787s have encountered multiple problems including battery and engine issues. These have forced Norwegian to ground aircraft, disrupt schedules, and pay pricey fees to wet lease other aircraft.
The complaint alleges a conspiracy of poor workmanship, faulting the U.S. Federal Aviation Administration (FAA) for also failing to do its duty:
“Boeing exerted relentless pressure on its engineers from the start of the program to prioritize quantity over quality, proven they used ‘jedi tricks’ to get the FAA to approve the aircraft’s design based on statements from its own employees, and systematically cut corners along the way a very flawed design process that made a plane full of errors.”
While Norwegian has declined to comment on the lawsuit, Boeing issued a short but diplomatic response to E24, an online business newspaper:
“Norwegian Air Shuttle is a long-standing Boeing customer. As with many other players going through a challenging time, we are working to find the way forward.”
Expect a string of similar lawsuits from airlines around the world. As the pandemic has destroyed demand to the point in which new aircraft no longer fit the business plan, other airlines will seize upon Boeing’s shortcomings to try to wiggle away from contractual commitments. In the case of Norwegian, however, the problems with both the 737 MAX and 787 were well-documented and can hardly be blamed on COVID-19.