Norwegian Air and jet maker Airbus have agreed on terms to repudiate the carrier's contract for new aircraft, lawyers representing the two firms told the High Court in Dublin today.
Norwegian last year won protection from bankruptcy in both Norway and Ireland, where most of its assets are registered.
The airline is aiming to emerge with fewer aircraft and less debt as it plots a future beyond the Covid-19 pandemic.
Under a multi-year deal signed in 2012 and revised several times since, Airbus was to deliver 100 jets to Norwegian, and according to the aircraft maker's financial filings the company still has 88 narrow-body jets on order.
"We have agreed in the last short while, the terms of a consent order," Norwegian Air lawyer Brian Kennedy told the court.
Among the terms, Airbus will keep any prepayments it has received and will still be owed £600,000 by Norwegian, he said.
The deal comprised both Norwegian Air and its asset-owning subsidiary Arctic Aviation, Kennedy said, although he did not specify the number of aircraft involved.
A lawyer representing Airbus confirmed to the court that the two sides had reached an agreement.
Before the Covid-19 pandemic, Norwegian had contractual commitments amounting to $9.55 billion for the purchase of Boeing and Airbus aircraft from 2020 to 2027, according to the carrier's financial filings.
Last June however, Norwegian unilaterally terminated its remaining orders with Boeing for 97 aircraft and sought compensation for the grounding of the Boeing 737 MAX jets and technical problems with 787 Dreamliners.
Boeing has contested the move and also made counterclaims against Norwegian, documents filed by the airline show.