Norwegian (DY, Oslo Gardermoen) has accused Boeing (BOE, Chicago O'Hare) of “gross negligence and shoddy production” in a lawsuit against the manufacturer in relation to its acquisitions of B737 MAX and B787 aircraft.

A major Boeing customer for many years, Norwegian now claims the US company is at fault for contract violations worth more than USD1 billion, according to legal documents obtained by business newspaper Dagens Næringsliv.

Persistent technical problems with new aircraft forced the airline into “thousands” of flight cancellations, long before the impact of covid-19 on travel began.

“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,” reads the lawsuit filed at the District Court for the Northern District of Illinois in the United States.

Norwegian alleged in the court papers that Boeing was aware that five B787-9s due for delivery, which were powered by Rolls-Royce Trent 1000 engines, were “defective and probably would have been out of service for maintenance at least 20% of the time.”

As previously reported, Norwegian cancelled all of its outstanding orders for Boeing aircraft on June 30, comprising ninety-two B737-8s and five B787-9s, and demanded the return of pre-payments plus compensation for the technical problems it experienced.

Both aircraft types had disrupted the airline’s operations and caused “enormous economic” damage, the court papers said.

Meanwhile, Norwegian has itself been slapped with two lawsuits. Newrest, a Toulouse-based global inflight caterer, has filed debt summary judgment applications at the High Court in Ireland, home of subsidiary Norwegian Air International (D8, Dublin Int'l).

This kind of suit is a tactic companies often use to demand payment under contracts quickly from a judge, without trial or hearing and on the basis of paper submissions only, the Irish Times reported.

Norwegian signed up as a Newrest client in 2016, for it to cater initially for its long-haul routes from Paris CDG to Fort Lauderdale Int'l, Los Angeles Int'l, and New York JFK.

Newrest France launched an initial suit on June 17, followed by a second from parent Newrest Group Holding on July 1. Norwegian has yet to submit a defence to either debt case.

In further bad news for Norwegian, Sweden and Denmark have both given the company the cold shoulder regarding funding. Norwegian succeeded earlier this year in landing a multi-billion kroner government rescue package in Norway that has so far saved it from collapse, but similar requests to other Scandinavian countries have been rejected.

Norwegian is currently burning NOK300-500 million (USD32-54 million) a month, CEO Jacob Schram told the business daily E24 Næringsliv.

“I can't say anything except that we're just shaking our heads in despair. I think it all appears very poorly thought out for anyone who is concerned about healthy competition for the benefit of the whole of Scandinavia,” he said.

There is strong preferential treatment in the Nordic countries, he added, where SAS Scandinavian Airlines (SK, Copenhagen Kastrup) receives crisis aid from all three countries while Norwegian and Widerøe (WF, Bodø) are offered assistance only from Norway. He is not against SAS receiving help, he said, but there must be equal treatment.

The National Debt Office, the Swedish government's financial manager, recently rejected Norwegian's application for loan guarantees for NOK300 million (USD32.3 million), an amount, Schram argued, that was far below what SAS was offered in Norway and Sweden.

In June, the Swedish government agreed to inject up to SEK5 billion (USD553 million) into SAS if the parliament approved. Denmark and Sweden, the carrier’s biggest shareholders, had already agreed to give a 90% guarantee for a revolving credit facility of SEK3.3 billion (USD365 million). Norway has also pledged around USD50 million to SAS to maintain Norwegian routes.

“A prerequisite for an airline to be able to obtain a government loan guarantee is that it is considered to have been financially sustainable as of 31 December 2019,” Swedish National Debt Office spokeswoman Åsa Elm told E24.

In related news, Norwegian will resume a number of long haul routes to the USA from the beginning of December 2020, with several weekly departures, despite saying previously that there would be no international flights before the start of the summer-season schedules in 2021.

By July 1, 76 Scandinavian routes had resumed, according to local media. Now, Norwegian UK (DI, London Gatwick) will restart on December 9 with flights from London Gatwick to Boston, Los Angeles, Miami Int'l, New York JFK, Orlando Int'l, San Francisco, CA, and Tampa Int'l, while routes from Paris CDG operated by Norwegian itself are scheduled to open to Los Angeles and New York JFK from March 28, 2021.