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Old 4th Sep 2019, 15:58
  #22 (permalink)  
calypso
 
Join Date: May 2000
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Expanding an airline costs vast sums of money. You have to buy new aircraft, train new crews, expand the back office and wait for new routes to ether fail or mature. Norwegian was planning to fund the expansion from profits of the core business, clearly those profits where not enough given the scale of the expansion. The expansion has now stoped so those costs will also drop considerably. On top of that there have been the issues with the RR engines, which RR says they have now fixed - although the full implementation of the fix will take a couple of years. Further to that we have the MAX grounding which should resolve itself in the next few months - and a settlement should be reached with Boeing to cover some of the costs.

In this context pushing back the debt repayment to a period where all these one off costs are no longer a factor makes a lot of sense. Tackling the issues head on seems a more sensible strategy that trying to outrun them which appeared to be the previous plan. It sets the basis to rescue the business and return to profit.
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