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Norwegian says Boeing Max grounding could cost it £45m

Norwegian says Boeing Max grounding could cost it £45m
Business
Troubled low cost airline Norwegian has said the grounding of its fleet of Boeing 737 Max planes could stop it returning to profit this year.

The firm s 18 Max aircraft have been forbidden from flying since the Ethiopian Airways crash in March, which killed all 157 people on board.

Norwegian has been trying to turn itself around amid heavy losses.

But it said "uncertainty" over the grounding could cost it up to 500m Norwegian kroner (£45m).

Chief executive Bjoern Kjos said: "There is a saying that you should hope for the best and plan for the worst, so we are planning to have [the Max aircraft] on the ground throughout August."

The low cost airline has shaken up the long-haul market by offering cut-price trans-Atlantic fares, but its rapid expansion has left it with huge debts.

In January, the carrier had to raise 3bn kroner (£270m) in emergency funding from shareholders after British Airways ruled out a takeover of the business.

While its Max planes remain grounded, the airline has been rebooking passengers on to other flights and renting alternative aircraft in an attempt to maintain as much of its schedule as possible.

On Thursday, Norwegian said its losses had widened to 1.49bn kroner (£133.7m) in the first quarter of 2019 - up from 46.2m kroner last year.

However, it said its new cost-cutting programme, designed to improve its finances, was moving faster than expected.

Image caption The Ethiopian Airlines crash in March killed all 157 people on board

All Boeing 737 Max 8 planes have been grounded globally following the Ethiopian Airlines Flight 302 crash near Addis Ababa.

It was the second crash involving a 737 Max 8 jet in five months, raising concerns there may be issues with the plane s software.

Boeing has said it is developing new software for the Max s Manoeuvring Characteristics Augmentation System (MCAS), an anti-stall system which has come under scrutiny since the crashes.

On Wednesday, Boeing said a fall in deliveries of the jet had already led to a $1bn drop in revenues.

The company also said that uncertainty over when the plane would be allowed to fly again meant it was unable to forecast its profits for 2019.
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