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OSLO, NORWAY - Nordic low-cost operator Norwegian Air canceled orders for 92 737 MAX jets and five 787 Dreamliners. The airline also said that it would take legal action against the US aircraft manufacturer.

“Norwegian has, in addition, filed a legal claim seeking the return of pre-delivery payments related to the aircraft and compensation for the company’s losses related to the grounding of the 737 Max and engine issues on the 787,” 

the airline said in a statement.

The loss of 97 aircraft deals, worth $5.5 billion, is the latest blow to Boeing and its finances. It came as the jet maker flew its first test flight that aims to get the 737 Max re-certified by the Federal Aviation Administration to carry passengers again.

"We are not going to comment on commercial discussions with our customers," 

Boeing spokeswoman Jessica Kowal said.

"Norwegian Air Shuttle is a long-standing Boeing customer. As with many operators dealing with a very challenging time, we are working on a path forward."

In July 2019, Bjorn Kjos, the 72-year-old CEO and co-founder of the Oslo-based low-cost airline said his airline had a huge appetite for the 737 MAXs.

A year later, Kjos is retired and the airline's love and patience for the troubled MAX seem to have reversed course entirely, especially amid the pandemic which has seen the global aviation world suffer a major collapse.

Norwegian also canceled its remaining five 787-9 orders outstanding from 2015. The carrier had trouble with the Dreamliner engines, made by Rolls-Royce, showing premature wear and had to ground them so blades could be replaced. Like other airlines in the U.S. and around the world, Norwegian has received a government bailout to survive the Covid-19 pandemic.

Norwegian currently has 18 737 MAX jets in its fleet, and they have all been grounded since March 2019, when aviation safety authorities around the world grounded Boeing's once best-selling jet after two crashes killed 346 people.

CFRA Research analyst Colin Scarola said in a note to clients that "this cancellation does not signal customers are losing faith in Boeing planes.

"Norwegian's decision likely has more to do with its own financial problems than issues with Boeing planes. We note the airline generated large losses in 2017-19, with earnings before interest and taxes failing to cover interest expenses well before the pandemic, and its shares are down 93% year-to-date," 

Scarola said, adding the pandemic will continue to drive the airline industry downsizing in 2020-2021.

Scarola said while the canceled order has concerned investors, the deal represented MAXs that were to be delivered through 2027, and represents just 2% of Boeing's overall 4,700+ commercial aircraft order backlog.

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