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Norwegian

Old 12th May 2019, 18:16
  #61 (permalink)  
 
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So where/when has any possible compensation from RR and Boeing been confirmed as being in cash? Quite often the compensation from will be in the form of reduced prices for future orders/ free training/ etc etc.

That doesn’t helped an airline struggling for cash. Also, passengers care not who’s at fault for flight cancellations and disruption. It will always be the airline to take the blame.
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Old 12th May 2019, 19:59
  #62 (permalink)  
 
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Exactly!

Do people really think Boeing and RR are going to give cash compensation to all airlines affected by the 787 issues and 737 MAX issues? If they did that, they would be both bankrupt by tomorrow! How many airlines are affected by these two separate issues?

Norwegian have more chance getting the rights to Siberian airspace from Russia than they do of getting cash from Boeing/RR!
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Old 12th May 2019, 20:49
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Originally Posted by Dct_Mopas View Post
So where/when has any possible compensation from RR and Boeing been confirmed as being in cash? Quite often the compensation from will be in the form of reduced prices for future orders/ free training/ etc etc.

That doesn’t helped an airline struggling for cash. Also, passengers care not who’s at fault for flight cancellations and disruption. It will always be the airline to take the blame.
No chance will discounts for future orders be accepted as an equivalent unless you double the amount you talking of.

Airline paid the cash out so it requires repaying, refuse to pay and then Airline no longer pay for planes, cancel leases, handback aircraft and state unwilling to use because do not believe they are safe. Every other airline will then ask "Why and What do they know" and watch Boeing collapse.

I posted in another thread that a minor chip issue in 1994 cost Intel $500 and almost the company, it affected hundred users at most but everybody wanted it changed and other people stopped using Intel chips in their equipment.

Boeing go to court and will eventually get a final judgement in 2035 because that is how long it will take and Norwegian take Boeing to court for selling unsafe planes. Lawyers get rich and both go bust.

Boeing has no high road to take because only needs one Airline to hand back and refuse to fly as unsafe and watch everybody following.
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Old 12th May 2019, 21:03
  #64 (permalink)  
 
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Originally Posted by Vokes55 View Post
And you think that means that if Norwegian’s load factor increased, they’d lose €16 for every additional passenger they carried?

Depends on the price they charge. But a £16 loss at 86% load is not the sign of a healthy airline. And they aren't healthy.
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Old 12th May 2019, 21:31
  #65 (permalink)  
 
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Norwegian's finances are a lot more precarious than Boeing. If 737 Max compensation goes into a prolonged court battle, Norwegian will most likely end up declaring bankruptcy first and any post-bankruptcy administrators are far less likely to have the desire for a multi-year court fight than existing execs. Both sides know this, and they also know that Boeing will be more than capable of finding some spurious reason as to why SouthWest in the USA (who have strong finances and can play a waiting game in court) should get cash compensation while Norwegian should get only a discount off the next order. Of course if IAG shoukd buy Norwegian then Boeing might change their mind - perhaps unfair but that's called capitalism

If either side think they might go bankrupt, they will be much more inclined to settle out of court for whatever derisory terms the other side proposes.

Boeing as a major defence contractor has the implicit backing of the US Govt who will regard Boeing as a strategic US asset - they can play tough if Boeing is nearing Chapter 11. When Deepwater caught fire, the UK Govt went into bat for BP as a strategic asset against Obama. I am not sure how far the Norwegian Govt will want to go down the route of diplomacy in comparison

I agree with racedo that airlines will want significantly extra compensation as discounts in the future compared to compensation in cash now. I do not however believe that if 1 airline throws their toys out of the pram saying the Max is unsafe to fly that other airlines will take them seriously; Norwegian is very likely not privileged to info on the 737 Max which American does not have. Once the FAA, EASA and others recertify the 737 Max in the next 12 months then barring a hull loss, Norwegian would have to be very convincing for American to ground their aircraft on Norwegian's say so.

Last edited by davidjohnson6; 12th May 2019 at 21:46.
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Old 12th May 2019, 21:47
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Originally Posted by A320ECAM View Post
Exactly!

Do people really think Boeing and RR are going to give cash compensation to all airlines affected by the 787 issues and 737 MAX issues? If they did that, they would be both bankrupt by tomorrow! How many airlines are affected by these two separate issues?

Norwegian have more chance getting the rights to Siberian airspace from Russia than they do of getting cash from Boeing/RR!
RR sold a product that requires a recall for safety reasons. This is costing the airline cold, hard cash to mitigate both in leasing capacity and in paying leases for B787’s that are grounded.

Boeing sold an airplane that crashes itself, with a flawed system, a questionable certification process and denied there were any problems (what else don’t we know about?!). While these planes are grounded, they are costing money in leasing and operationally to find capacity elsewhere.

Now add all the additional administration required to organise keeping the operation afloat. That costs money too.

If I was managing any company let down so badly by suppliers, I’d be seeking as a starting point; full compensation on every penny spent to stay operational, compensation for the inconvenience caused, compensation for damage to my brand and finally, future discounts or I’ll take my business to your competitor. Play this right and Norwegian may have a healthy lump of cash and discounts on future orders coming their way.
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Old 12th May 2019, 21:57
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Boeing as a major defence contractor has the implicit backing of the US Govt who will regard Boeing as a strategic US asset - they can play tough if Boeing is nearing Chapter 11.
If this doesn’t transpire to be one of the reasons for the MAX mess, I’ll be shocked. ie. Boeing have appeared to present an attitude of being untouchable throughout the fallout. If that is their attitude now, what must it have been like when designing the MAX?

It is imperative airlines like Norwegian hold them to account and send a message that their behaviour has been unacceptable.
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Old 13th May 2019, 08:31
  #68 (permalink)  
 
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I think it has been well reported that RR has put aside 100's of millions of £ to pay 787 affected airlines compensation due to the engine issues.

I could assume to pay means cash compensation, rather than offer future sweeteners...BUT we do not have that info, nor likely will we.

So far there hasn't been credible reports of Boeing doing the same as yet, re the MAX, but surely brand new planes do have some sort of warranty attached to them - ?
Most MAX are leased and not owned by the airlines - so do the lessors stop paying the lease fees, and the airlines stop paying the lessor?
I guess the MAX affected airlines at this stage do have to pay now for the ACMI leases they are scrabbling around to find uplift with for most likely the rest of the summer season at least.

We really cannot pontificate anymore as we are simply not employed in the Accounts, or the Commercial Departments of any of these airlines, nor are we privy unless they publicly announce exactly what their terms are with RR & Boeing in these unforeseen circumstances.
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Old 13th May 2019, 11:09
  #69 (permalink)  
 
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Originally Posted by rog747 View Post
I think it has been well reported that RR has put aside 100's of millions of £ to pay 787 affected airlines compensation due to the engine issues.

I could assume to pay means cash compensation, rather than offer future sweeteners...BUT we do not have that info, nor likely will we.

So far there hasn't been credible reports of Boeing doing the same as yet, re the MAX, but surely brand new planes do have some sort of warranty attached to them - ?
Most MAX are leased and not owned by the airlines - so do the lessors stop paying the lease fees, and the airlines stop paying the lessor?
I guess the MAX affected airlines at this stage do have to pay now for the ACMI leases they are scrabbling around to find uplift with for most likely the rest of the summer season at least.

We really cannot pontificate anymore as we are simply not employed in the Accounts, or the Commercial Departments of any of these airlines, nor are we privy unless they publicly announce exactly what their terms are with RR & Boeing in these unforeseen circumstances.
Boeing have stated in Q1 results that it has already cost them $1 billion, they then refused to provide a single piece of financial guidance on the rest of the year. Basically telling everybody it is going to be bad and we have no idea how bad.

Most Airlines sold via US are financed via EXIM................. basically US Govt funded Export Credit, if Lease co's and Airlines decide not to pay then US Govt on the hook.

Airline buy an aircraft at Book prices of $50 million for $25 million, sell to Lease co for $50 million, in effect pocketing $25 million in cash and pay the lease co over the life of the asset with an agreed future resale value.

While Boeing is a strategic asset for US Govt the issue will be that US Govt will not wish to put €10 billion directly into them as that is State aid and EADS would be in court.

The longer it goes on the more damage to Boeing as it is future orders that will be the issue, I think anybody with a Max order for Q4 this year will be lucky to get it in Q4 2020.
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Old 19th May 2019, 17:01
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Whats the Norwegian 789 doing at PIK? (positioned in from LGW at 1800hrs), perhaps training circuits or maintenance?
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Old 19th May 2019, 17:22
  #71 (permalink)  
 
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Originally Posted by VickersVicount View Post
Whats the Norwegian 789 doing at PIK? (positioned in from LGW at 1800hrs), perhaps training circuits or maintenance?
Maintenance
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Old 19th May 2019, 21:40
  #72 (permalink)  
 
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Originally Posted by VickersVicount View Post
Whats the Norwegian 789 doing at PIK? (positioned in from LGW at 1800hrs), perhaps training circuits or maintenance?
Chevron have a maintenance contract with Norwegian for their 787s. I think this is the 3rd or 4th that’s been in with more to follow.
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Old 20th May 2019, 12:12
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Originally Posted by ScotsSLF View Post

Chevron have a maintenance contract with Norwegian for their 787s. I think this is the 3rd or 4th that’s been in with more to follow.
https://m.facebook.com/Chevrontech/p...48&__tn__=EH-R
Excellent. That's the type of work PIK should focus its concerns.
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Old 13th Aug 2019, 15:16
  #74 (permalink)  
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All Transatlantic routes from Ireland scrapped. Blame is being cast on the 737 Max issues, but as regular followers of this thread will know, that's only part of the story.

In terms of the airports, it represents a loss of 242K passengers at Dublin, 82K at Shannon and 28K at Cork. The Shannon figure is close to 5% of all traffic and represents a big loss. For Cork and Dublin, it's closer to 1% and will get lost in this year's growth, although the loss of Cork's only transatlantic link is symbolically important.
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Old 13th Aug 2019, 17:07
  #75 (permalink)  
 
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According to this article, at TUI the full cost of having grounded Max jets could reach 300 million Euros in 2019. http://www.travelweekly.co.uk/articl...it-uncertainty

Norwegian, who have a similar number of Max jets reckon it will be a €30-40 million hit. Norwegian Airlines management is either smoking the good stuff or deliberately deluding investors and customers alike.

Last edited by Smooth Airperator; 13th Aug 2019 at 17:21.
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Old 13th Aug 2019, 19:45
  #76 (permalink)  
 
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Originally Posted by Smooth Airperator View Post
According to this article, at TUI the full cost of having grounded Max jets could reach 300 million Euros in 2019. http://www.travelweekly.co.uk/articl...it-uncertainty

Norwegian, who have a similar number of Max jets reckon it will be a €30-40 million hit. Norwegian Airlines management is either smoking the good stuff or deliberately deluding investors and customers alike.
But TUI will lose out on the whole package revenue as opposed to just the flight rev for Norwegian
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Old 13th Aug 2019, 20:02
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Originally Posted by TartinTon View Post
But TUI will lose out on the whole package revenue as opposed to just the flight rev for Norwegian
Not sure if that's true. Wet lease has been brought in to make sure people get their holidays.
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Old 14th Aug 2019, 13:50
  #78 (permalink)  
 
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I agree with 840. If it were simply a max issue Norwegian would suspend its Irish flights for the winter months and reinstate them next summer when (hopefully) the Max will be flying again. They are clearly unprofitable.

Network wide I assume that most of Norwegian's problems are long haul - certain the low cost model works far better for SH than LH. The new CEO is going on about profitability rather than growth but how many of their LH routes are actually profitable?
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Old 14th Aug 2019, 14:59
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The Irish routes were especially popular with Americans, although Irish preferred to fly with Aer Lingus - so maybe that was a part of play. However, Norwegian’s line is that it isn’t profitable running them with weight restricted 737-800’s and there is no certainty in the MAX situation - so they would rather cancel them.
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Old 14th Aug 2019, 16:47
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I wouldnt think it is a weight restriction issue, more like a range issue.
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