Originally Posted by
Plastic787
Vokes55
I know for a fact that Denver and Chicago to name two were massive loss makers, Singapore (not US obv but proves the point) was so successful it lasted a matter of months. The rest were marginally profitable in summer and a big drain in winter, similar to low fare long haul full stop. IAG took one look at the books and walked away saying “nah thanks”. That’s the reality.
Singapore lasted more that "just a matter of months", it lasted from September 2017 to January 2019. Much of the issues with Singapore was mismanagement of the cargo contract. Flight deck crews were not properly informed of how the contract worked and would dump cargo to carry passengers and/or bags when it was cargo that was paying the bills. When the cargo agent canceled the contract because of reliability issues, the Singapore route was axed. It was only after the route getting axed that flight crews were given proper guidance on prioritizing cargo over passengers. This was a prime example of the type of mismanagement that occurred at Norwegian, one hand often did not have any idea what the other hand was doing. Some other examples were recruiting and training crews like crazy, only to have them get stuck at the line training bottleneck. Many crew members would sit for six months or longer, with full pay, without any line training. Many pilots had to be sent back to the sim during that time. Virtually the entire FLL based pilot group sat around for over a year, on full salary, while trying to get the EASA license conversion figured out. During the NUK start-up in LGW, there were some cancellations because they could not find enough NUK crews, while there were several NAS crews sitting around on standby in LGW, unable to cross AOCs. As NUK got larger in LGW, and the NAS operation wound down, the opposite occurred, with some NAS flights being cancelled for lack of crew, while several NUK crews were sitting around on standby. So for almost a year, Norwegian was operating two different airlines in LGW, with two separate management staff (two base captains, two chief cabin crew, etc.), but with zero ability for the two airlines to interact with each other. These are just a few examples of the massive mismanagement that was occurring at Norwegian.
IAG did not walk away from Norwegian. IAG made two offers, and Kjos rejected them, foolishly believing them to be too low. It turns out the offers were significantly more than fair, and the rejection of them is what ultimately forced Kjos out of Norwegian (no...he did not retire of his own accord, he was asked to retire by the board and many of the other large shareholders). IAG's plan for Norwegian was not to operate it as a LCC, but more to position it as a mid-level type of carrier, similar to how it was operating Aer Lingus. The plan was for three levels of airlines, BA and Iberia being the full service, top end carriers, Aer Lingus and Norwegian to be mid level airlines with some long haul, with Level and/or Vueling to be the LCC carriers.
"IAG had bought almost 4% of shares in Norwegian and had been in takeover talks, with two tentative offers rebuffed."