Norwegian Air CEO says Boeing changed 787 pump design
NEW YORK (Reuters) - The chief executive of Norwegian Air Shuttle ASA (NWC.OL) ended weeks of criticism of Boeing Co (BA.N) on Thursday, praising the aircraft maker for fixing a faulty 787 Dreamliner and saying the $200 million high-tech plane is "fantastic" for the budget airline.
Bjorn Kjos told Reuters in an interview that Boeing redesigned a malfunctioning hydraulic pump that controlled flaps used to steer the plane as part of a two-week overhaul to fix problems with the jet.
"I think the Dreamliner is going to be a fantastic aircraft," the CEO said, noting that the plane's low operating cost made it profitable for use on long-haul trips.
"We know from the one that has flown very well so far, that it is performing fantastic" on fuel burn "and passengers love it," said Kjos, a former fighter-jet pilot.
The CEO's softer tone contrasts with his previous frustration with the Dreamliner, which has suffered a string of troubles since it entered service two years ago. Among previous remarks, Norwegian Air has said the "Dreamliner has proven to be more of a nightmare for airlines relying on this new craft, especially Norwegian Air Shuttle."
Taking the plane out of service has required Norwegian Air to lease an Airbus (EAD.PA) A340 jet, and stranded passengers for up to 12 hours. Kjos declined to disclose the cost of those measures, but said fuel burn on the four-engine Airbus jet was high, especially compared with the next-generation, two-engine 787.
"Obviously it is no good that the passengers are delayed for 12 hours. You shouldn't accept that. So I am angry on behalf of the passengers. But I know Boeing will fix this aircraft. They have the resources to fix it and they know how to fix it."
He said Boeing had sent 15 people from Seattle to work on the plane in Stockholm, where the plane was located.
Boeing was not immediately available for comment.
Kjos said Boeing redesigned the hydraulic pump to make it more reliable after Norwegian Air and other airlines had pump failures as well. He said Boeing is completing two weeks of overhauling Norwegian Air's faulty 787 Dreamliner, fixing the pump and other equipment. He said the plane's electrical system was "fine" but software flaws had caused incorrect warnings to appear in the cockpit, and problems with interior lighting.
Only one of the airline's two 787 Dreamliners had serious issues, he said, and that plane is due back from service by Boeing this week. The other plane will then go in for the same two-week repair under the "GoldCare" service plan that Norwegian Air had purchased with the jet.
He said GoldCare "will pay off" economically because Boeing is the best at repairing the plane. Having other technicians work on a 787 is like having mechanics familiar with a 1995 car fix a 2013 car. "They could do it, but it takes training."
Kjos said he wants to buy more 787s - including the forthcoming stretch version, the 787-9 - to allow passenger growth at Norwegian Air that he forecast at 20 percent a year, up from about 20 million passengers a year currently. But he provided no details on potential orders or timing.
"Nothing can substitute a Dreamliner. I'm totally convinced that we made the right decision when we went for the Dreamliner," he said.
Kjos said he was not considering the 787-10, because that longer version has less range than the 787-9 model. He also was not interested in the Airbus A350, a competing plane that recently beat out Boeing's yet-to-be-launched 777X for a landmark order from Japan Airlines Co Ltd (9201.T) breaking the lock on JAL that Boeing has held for decades.
Kjos also said Bombardier Inc's (BBDb.TO) new all-composite CSeries was too small at 149 seats. Norwegian's mainstay 737 jets have seating for about 189 passengers, he said.
The 777X would likely be too large for Norwegian Air's use and lacks the composite fuselage that makes the 787 lighter and more fuel efficient, he added.
NO TAKEOVERS, PLEASE
Norwegian Air has been approached by a number airlines that wanted to be acquired, Kjos said, but he declined to entertain the offers. The airline is not in talks with LOT Polish Airlines LOT.UL about a buyout or about purchasing that airline's 787s, which also have experienced problems, he said, responding to reports that they had held discussions.
"We have said no, we are doing fine on our own," Kjos said.
Norwegian Air's forecast growth of 20 percent a year in coming years will require more 787s beyond the eight it already has ordered, with two delivered, he added.
The airline is considering destinations that include Chicago, Boston, Washington, D.C., Las Vegas, Seattle and Minneapolis. Those flights might not all go through Europe.
"We fly where people fly," he said, noting a huge demand - and competition - from Asia to Europe and the United States.
The airline is hiring flight crews based in New York and Fort Lauderdale, Florida, to allow more flights from those cities as it receives more Dreamliners in coming months.
Norwegian Air is due to receive its third Dreamliner in late November and a fourth early next year. Those jets will allow it to begin daily flights from New York, Kjos said.
Norwegian Air is the first budget airline in recent years to offer transatlantic services. It plans to fly to Los Angeles, San Francisco and Orlando, Florida, on top of its routes to Fort Lauderdale and New York.
Last year, Norwegian Air placed Europe's biggest aircraft order when it bought 222 planes from Boeing and Airbus. It has been one of Europe's most successful carriers, taking market share from SAS AB (SAS.ST) while moving outside its traditional Nordic market by setting up bases in London and Spain.
The airline said it can operate long-haul flights for 30 percent less than traditional airlines, mainly because of the Dreamliner's lower operating cost and the jet's ability to fly for 18 out of 24 hours, he said.
(Reporting by Alwyn Scott; Editing by Gerald E. McCormick, Marguerita Choy and Richard Chang)