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Noxegon
12th Apr 2018, 10:15
https://www.irishtimes.com/business/transport-and-tourism/aer-lingus-owner-iag-considers-bid-for-norwegian-air-1.3459405

CaptainProp
12th Apr 2018, 10:43
Interesting times....

CP

Rated De
12th Apr 2018, 11:05
Connections close to the source indicated that much of the interest was indeed strategic.

Problematic as we understand it is the structure of debt covenants and indeed the a bit of dis economy.

Having said that, always a sure sign the business cycle is long when Mergers are driving growth :E

Heathrow Harry
12th Apr 2018, 11:24
Beeb:-

British Airways owner International Airlines Group (IAG) has confirmed that it is exploring a potential acquisition of low-cost carrier Norwegian Air Shuttle.
Shares in Norwegian jumped by as much as 26% on news of a possible tie-up before trading was suspended on the Oslo Stock Exchange.
According to reports, IAG wants to boost its market share amid increasing competition from low-cost carriers.

Norwegian declined to comment.

IAG said it had bought a minority stake in the airline with a view to opening talks about a deal.

"The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian," IAG said.
However, it said no discussions have taken place and it has not decided whether to make an offer.

Hussar 54
12th Apr 2018, 11:34
If it isn't already, I reckon that in the not too distant future BA's decision to sell GO to one of it's potentially biggest competitors will be right up there amongst academics researching the biggest corporate mistakes / failures of the past 100 years.

Rated De
12th Apr 2018, 12:02
I reckon that in the not too distant future BA's decision to sell GO to one of it's potentially biggest competitors will be right up there amongst academics researching the biggest corporate mistakes / failures of the past 100 years. Actually it isn't necessarily.
Perhaps the biggest mistake airline management is make searching for lower labour unit cost at the expense of everything else.

Permit the divergence, however if one looks at Qantas and Jetstar two airlines and one company the problem can be deciphered despite the accounting opaqueness.

Jetstar now has more aircraft than the parent. It flies 48% of the ASK that Qantas flies, yet generates only 22% of the revenue. This is suggestive of elasticity.

Thus had Go and BA existed side by side, the low fruit was the labour unit cost it may have jumped the containment too as a panacea for all ills!
Jetstar, was designed to lower labour unit cost and create tension between cost centres. A low fare airline struggles for yield. A Low Fare Airline is a volume business, the Achilles heel of the model is its demand elasticity. They struggle to generate consistent operating margins is evidenced by their rate of failure. The 'value proposition' full service airlines used to offer gave them a degree of demand in-elasticity, most certainly more evident in J class.

Qantas do not report Jetstar in two Operating segments (Domestic and International) yet they do Qantas. They choose not to. It is highly probable that Jetstar Internationally is a substantial loss maker.



BA saved itself from diluting its yield, but as they continue to hack into BA's value proposition (for they all went through the same MBA courses) they look for lower labour unit cost instead of yield maintenance.

Permit me to borrow from Herb Kelleher (South West) and I paraphrase badly;

"You can have the lowest cost airline or the largest revenue airline and still go broke, what matters is the gap between the two"

RexBanner
12th Apr 2018, 12:08
As I’ve said on another thread (on airlines airports and routes) IAG could very well be on a fishing expedition here to see exactly how bad the financials are. In any takeover bid they’d be allowed full access to the books...

Rated De
12th Apr 2018, 12:20
As Iíve said on another thread (on airlines airports and routes) IAG could very well be on a fishing expedition here to see exactly how bad the financials are. In any takeover bid theyíd be allowed full access to the books

Correct Rex, got to own enough to get to do diligence..

As our sources suggested, they are pretty worried about the debt covenants.

pax britanica
12th Apr 2018, 12:20
Even if you get access to the books there are plenty of stories from the business world where pre M&A due diligence failed to uncover catastrophic problems .

As in the QANTAS . Jetstar case the books tell you one thing but reality is another and in a situation like Norwegian arcane financial engineering might make it very very difficult to get a true picture of the real state of play.
Buyer beware

oldchina
12th Apr 2018, 12:32
Air Berlin was a star, once.

esa-aardvark
12th Apr 2018, 13:05
Would be a great shame. Just had a very nice Bangkok-Oslo flight in
Premium. Hesitate to think what effect an IAG takeover would have.

dead_pan
12th Apr 2018, 13:22
Attempt to rein in an upstart competitor, esp on those lucrative trans-Atlantic routes were Norwegian have made such inroads? Also, if IAG don't decide to move to a full bid then further questions will be asked about Norwegian's financial health. Win-win for IAG...

Heathrow Harry
12th Apr 2018, 14:04
IAG only get a look at the books if Norwegian decide to co-operate . In a full on hostile takeover they don't have to hand over any info and even then:-

"The offeror will invariably conduct a due diligence exercise in relation to the target company before announcing an offer. The extent of the due diligence exercise in the case of a hostile offer will be limited
to reviewing publicly available information, such as the results of searches of public registers and financial analysts’ reports. In the case of a recommended offer, the due diligence exercise may be much more
extensive, but the target company will often seek to limit its extent, either because it does not wish the offeror, who may be a competitor, to obtain confidential information from it, or because it would not
wish the information to be made available to an alternative offeror (see paragraph 3.1 below in relation to Rule 21.3 of the City Code) or because the target company wants to ensure that details of a potential
bid are not leaked to the public.

For all these reasons, as a matter of practice, due diligence in public offers is often limited in comparison with private sales. The target company will, prior to handing over any information, ordinarily insist upon the potential offeror entering into a confidentiality agreement and it would also often seek to include in the confidentiality agreement “standstill” provisions, that is to say provisions restricting for a specified period the ability of the offeror to acquire target company shares without the consent of the board of the target company. There are difficult questions of law as to the "enforceability of standstill arrangement

ExXB
12th Apr 2018, 14:24
Norwegians' model has yet to show one thing. Profits.

WHBM
12th Apr 2018, 14:46
I wonder who approached who. Did IAG initiate things, because they are interested in the acquisition, and consolidation of some operations, especially at Gatwick, or did Norwegian ask to be looked at, maybe rather quickly ...

Is this shades of both B.Cal and Dan-Air, each bought for £1 (plus all the debts).

VinRouge
12th Apr 2018, 15:04
Norwegians' model has yet to show one thing. Profits.
Show me one airline that has with growth that is as rapid as NAS. Their EBITA is keeping pace with their growth, they just need to increase efficiency or utility slightly and will be in profit.

Boeing 7E7
12th Apr 2018, 15:55
Donít you just love reading the arm chair economists who have an opinion on everything but knowledge of nothing on all matters to do with growing a business. I know I do.

Heathrow Harry
12th Apr 2018, 16:14
I wonder who approached who. Did IAG initiate things, because they are interested in the acquisition, and consolidation of some operations, especially at Gatwick, or did Norwegian ask to be looked at, maybe rather quickly ...
:D
Is this shades of both B.Cal and Dan-Air, each bought for £1 (plus all the debts).

IAG - Norwegian specifically stated they didn't know. I guess IAG went over 3% and so had to notify them....

WHBM
12th Apr 2018, 16:26
IAG - Norwegian specifically stated they didn't know. I guess IAG went over 3% and so had to notify them....
A third option is that the banks who have funded Norwegian have initiated this with IAG, if they felt what they had lent was at risk.

Heathrow Harry
12th Apr 2018, 16:33
That could be done without buying any shares at all.........

vikingivesterled
12th Apr 2018, 17:15
Could this be a play for some of NAL's aircraft orders. According to SAS latest 50ac purchasing announcement they struggled to get early deliveries since both Boeing and Airbus order books are pretty full. BA could need some quick respecced deliveries of 787's to compete with Qantas UK-Australia direct = before 2020. Plus some 737 long range orders woudn't go amiss for additional trans-atlantic point to point routes.
And with the high % short selling of Norwegian stock, BA where hardly going to loose on their investment combined with a takeover threat.

polax52
12th Apr 2018, 17:19
Donít you just love reading the arm chair economists who have an opinion on everything but knowledge of nothing on all matters to do with growing a business. I know I do.

Don't you just hate democracy and freedom of speech.

22/04
12th Apr 2018, 17:20
I have posted elsewhere
I haven't seen the books.

Could it be bought or the liabilities taken on very cheaply then dismembered/rolled into existing brands with perhaps a small operation retained as DY.

I'm remembering Dan-Air.

UK ops would end I suspect - can't see them wanting to dilute the existing brands .

Am also mulling Laker. The legacies would want to protect the lucrative North Atlantic. The 787s would be mighty useful for replacing all those ageing 747s and 777s.

SMT Member
12th Apr 2018, 19:04
The elephant in the room may well be competition authorities. BA, either direct or through one of their joint ventures, sit very heavily on the transatlantic market out of the UK. Having the authorities approve a take-over of Norwegian, supposedly including it's long-haul arm, is unlikely to take place without relinquishing other agreements.

I suppose it's exactly to get rid of the transatlantic, and growing Asia/South-America, competition out of Gatwick, that IAG are showing an interest in taking over Norwegian.

The matter is further complicated by the UK leaving the EU, and whilst Norway is not a member, it does abide by all the rules and subjects to the ECJ, in order to gain free access to the market.

Those contemplating the Norwegian aircraft being part of a deal, should remind themselves that the long-haul fleet, and the vast majority of the short-haul ditto, are leased.

vikingivesterled
12th Apr 2018, 19:35
Those contemplating the Norwegian aircraft being part of a deal, should remind themselves that the long-haul fleet, and the vast majority of the short-haul ditto, are leased.

But the orders are not, and they can be adjusted to suit BA or another IAG company.
The best of the leases can be taken in as already financed ac's, probably with part of it even advantageous US export financing.

surely not
12th Apr 2018, 20:02
WHBM the deal by which BA bought BCAL was not £1.00!!!

It was £237 million pounds as reported at the time. It was this high thanks to Scandinavian - SAS making a good offer for the airline and forcing BA to offer more than their initial offer.

The £1.00 deal was reportedly for Dan-Air

12th Apr 2018, 20:47
.......The matter is further complicated by the UK leaving the EU, and whilst Norway is not a member, it does abide by all the rules and subjects to the ECJ, in order to gain free access to the market..........

most / all the 787s are on the Irish AOC ?

MCDU2
12th Apr 2018, 20:55
The competition authorities won't give a damn. They will of course instigate a review and then it will be pointed out to them that if they don't let the deal through then there will be thousands of job losses after Norwegian goes bust. IAG will then sit back and see who blinks first. If the deal is blocked they lose some cash as the shares plummet, investor confidence wanes and Norwegian go boom. Then they lose a competitor and get the cash back eventually. Or if they succeed then they get rid of a competitor and no doubt have plans for turning it around and fitting it within the IAG group and improving yields eg: Cargo, interlining etc.

NEDude
13th Apr 2018, 05:22
most / all the 787s are on the Irish AOC ?

No, NAI (the Irish AOC) does not have 787s. All 787s are on the NUK or NAI AOCs.

stormin norman
13th Apr 2018, 06:27
BA can sell its shares ,make and profit and make NAS look a basket case for future investors.

ExXB
13th Apr 2018, 07:10
Bit of a dilemma for competition authorities. To the Mandarins in Brussels they are looking at effects on the EU market. Not at all interested in the EFTA or third countries. While the U.K. is not yet one of these, they would be by the time any investigation is concluded.

OTOH the British authorities are charged with reviewing the activities of British companies, something IAG is not.

Well, perhaps the Norwegians will look at it.

Heathrow Harry
13th Apr 2018, 08:36
Bit of a dilemma for competition authorities. To the Mandarins in Brussels they are looking at effects on the EU market. Not at all interested in the EFTA or third countries. While the U.K. is not yet one of these, they would be by the time any investigation is concluded.

OTOH the British authorities are charged with reviewing the activities of British companies, something IAG is not.

Well, perhaps the Norwegians will look at it.

will certainly be called in by the UK authorities

Popular press already reminding people of BA's predatory removal of competition over the last 60 years..................

WHBM
13th Apr 2018, 08:42
will certainly be called in by the UK authorities

Popular press already reminding people of BA's predatory removal of competition over the last 60 years..................
OK then, they can let Norwegian go bust. Booked passengers will lose their money, staff will lose their jobs.

Well done officials.

From the Daily Telegraph :

In February, Norwegian celebrated its first flight to Buenos Aires .... Broadly speaking, it was confident its new model of low fares offering basically just a seat - on new, comfortable aircraft - was here to stay
What unthinking editor at the Telegraph thinks that because aircraft are new they are comfortable ? 9-across in a 787 long-haul !!!

https://www.telegraph.co.uk/travel/comment/norwegian-british-airways-takeover/

Holdpoolin
13th Apr 2018, 10:12
The Telegraph's constant slating of BA and praise for Norwegian has been really infuriating past few months. As if they have an agenda/monetary interest in Norwegian. Think that article you quoted failed to talk properly about the vast amount of debt Norwegian find themselves in. And yes 9 abrest 787 - done that once and hopefully never again!

And to the floor - if an acquisition occurs- good/bad/inconsequential for current BA pilots?

SMT Member
13th Apr 2018, 10:18
Bit of a dilemma for competition authorities. To the Mandarins in Brussels they are looking at effects on the EU market. Not at all interested in the EFTA or third countries. While the U.K. is not yet one of these, they would be by the time any investigation is concluded.

OTOH the British authorities are charged with reviewing the activities of British companies, something IAG is not.

Well, perhaps the Norwegians will look at it.

I think you're forgetting IAG is a Spanish company. As such Ms. Vestager would be highly interested in any merger/take-over of Norwegian by IAG. The market likely to be most affected, however, would be transatlantic out of the UK. But let's not forget Norwegian also have a significant presence in Scandinavia and Spain, both long- and short-haul. I therefore think it unwise to dismiss the EU in all of this; they would be highly interested in ensuring competition is not further eroded.

Heathrow Harry
13th Apr 2018, 11:06
"OK then, they can let Norwegian go bust. Booked passengers will lose their money, staff will lose their jobs. Well done officials."

They are concerned with COMPETITION - they can/will make IAG divest itself of slots, routes, aircraft. The aim is to avoid monopolies

It is no co-incidence that air fares across the Atlantic are (relatively) high - 80% of flights offered are from one of the "Alliances"

MCDU2
13th Apr 2018, 13:24
There is very little direct competition and hence chance of a monopoly occuring should IAG offer and succeed in gaining a controlling interest in Norwegian. Norwegian does bucket and spade routes which are ten a penny with airlines competing for business. Their longhaul operations whilst including some main hubs also have a fair amount of secondary airports. Anyway this would have all been ticked off the boxes by Willys advisors well ahead of the share purchase. Thats what you pay the big bucks for.

Heathrow Harry
13th Apr 2018, 13:58
You can't get pre-clearance before a bid - you have to take the risk. No doubt the Advi$ors will have done their best but at the end of the day it's politics - so expect France, Germany, Netherlands and Italy to wade in -if nothing else to run up IAG's legal bill and trap them in the regulatory swamp for a year or two

EIFFS
13th Apr 2018, 15:25
The money raised from the recent share offer was from core investors who are long term the second tranch to be approved on the 13th (today) is for investors not included in tranch 1 to ensure that they are treat equally.

This placing was to provide a buffer to ensure that norwegian did not breech its banking covenants.

2018 is front loaded in terms of delivery of new aircraft especially the 789, 2018 will like be a loss, but the underlying performance will be the key going forward.

In the meantime IAG have generated huge free publicity for Norwegian that is not negative.

Letís see how this pans out

A and C
13th Apr 2018, 18:46
Putting that big picture of Freddie Laker in the tail of one of the aircraft was bound to provoke a reaction.

WHBM
14th Apr 2018, 07:34
The money raised from the recent share offer was from core investors who are long term the second tranch to be approved on the 13th (today) is for investors not included in tranch 1 to ensure that they are treat equally.

This placing was to provide a buffer to ensure that Norwegian did not breech its banking covenants
I had missed the announcement that Norwegian would possibly breach their banking covenants. This is the first step for an already heavily-borrowed company in announcing they are running out of cash. For a public company, this has to be announced to the stock exchange. It also commonly means that upper management take their eye off the running and progress of the company's product, to all be focused every day on the spreadsheets showing how the cash (is) coming in, and (is not) going out.

BehindBlueEyes
18th Apr 2018, 21:07
Looks like IAG have hired JP Morgan to finance a possible take over and that their stake in Norwegian has risen from 4.6 to 5%.

As I posted on another thread, a fortnight ago I was seriously thinking of having a punt on a few Norwegian shares - now kicking myself for my laziness!

Norwegian Air?s shares flying high (http://www.newsinenglish.no/2018/04/18/norwegian-airs-shares-flying-high/)

ONE GREEN AND HOPING
22nd Apr 2018, 14:09
WHBM.......Curious to know who got that £1 BA gave for BCal. That nice Lord King gave self and many others £12.15 for each of our shares, and treated the event as a merger....up to a point, naturally..

2 Whites 2 Reds
22nd Apr 2018, 14:45
Even if you get access to the books there are plenty of stories from the business world where pre M&A due diligence failed to uncover catastrophic problems .

As in the QANTAS . Jetstar case the books tell you one thing but reality is another and in a situation like Norwegian arcane financial engineering might make it very very difficult to get a true picture of the real state of play.
Buyer beware

From a previous life I can tell you that any decent management accountant worth his (or her) salt will be able to decipher the bull**** and give a reasonable assessment of the state of play to the buyer.

Due diligence may not uncover everything but if people are found lying they are liable. Additionally, any contract of sale will include certain warranties valid for 'x' period so its not quite as simple as them hiding stuff and IAG not finding it.

WHBM
22nd Apr 2018, 17:21
WHBM.......Curious to know who got that £1 BA gave for BCal. That nice Lord King gave self and many others £12.15 for each of our shares, and treated the event as a merger....up to a point, naturally..
OG&H. Sale for "£1 - plus all the debts" is finance-speak for a merger (which is generally the correct word for a takeover) where the net value of the shares is negligible - or even negative. But it is a financial convention that to be a merger it must be "for a consideration".

You also have to make a judgement that if you don't offer the principal shareholders anything they will go and make a nuisance of themselves with the Monopolies Commission (as it was then), as they then have nothing to lose. Nothing to do with the inherent trading account of the business or its assets.

Did you accept or reject the share offer ? What were they trading for at the time ?

fmgc
22nd Apr 2018, 19:21
EBITDA(R) maybe good but if you are not making profits you are not increasing your cash flow. No cash eventually no way to trade.

Heathrow Harry
4th May 2018, 10:14
http://www.bbc.co.uk/news/business

Norwegian Air Shuttle, the fast-expanding budget airline, says it has unanimously rejected two bid offers from the owner of British Airways.International Airlines Group (IAG), which owns 4.6% of Norwegian, is seeking to lift its market share amid competition from low-cost carriers.But Norwegian said the proposals undervalued the firm and its prospects.

Shares in Norwegian initially fell as much as 10% on the news before recovering slightly.

By contrast, IAG was the top gainer on London's FTSE 100 (http://www.bbc.co.uk/news/topics/c9qdqqkgz27t/ftse-100), up 5.6%.

News of the bids first emerged in an investor presentation by IAG, which also owns Spanish airline Iberia.IAG was giving the presentation after it posted a big jump in operating profits for the first quarter of 2018, thanks in part to strong demand over Easter.Underlying earnings were €280m (£247m) before exceptional items - up from €160m last year. Revenue climbed 2.1% to €5bn.

IAG said it had "had contact with the Norwegian board regarding a possible offer, without reaching agreement".In response, Norwegian issued a statement confirming that it had received "two separate conditional proposals" from IAG offering to buy the entire company.
Norwegian Air has earned a name for its low-cost deals, such as £99 one-way flights from Edinburgh and Dublin to New York. However, it reported a net loss in 2017 and had to raise fresh funds earlier this year to cope with its rapid expansion and higher fuel costs.Nevertheless, its move into discount intercontinental flights has shaken up the market and forced bigger rivals such as IAG and Air France to take measures to win back customers.IAG has already put a toe in the budget long-haul market with Level from Barcelona, while adding European airport slots from failed UK airline Monarch."Norwegian's finances may be stressed, but it's playing tough," said Neil Wilson, chief market analyst for Markets.com. "We note that it received interest from other parties once the IAG stake was revealed and this may be the reason for it to squeeze as much as it can from a bidder, although 'rescuer' may be more appropriate."We now have the prospect of a bidding war for Norwegian,

Hussar 54
4th May 2018, 11:33
From a previous life I can tell you that any decent management accountant worth his (or her) salt will be able to decipher the bull**** and give a reasonable assessment of the state of play to the buyer.

Due diligence may not uncover everything but if people are found lying they are liable. Additionally, any contract of sale will include certain warranties valid for 'x' period so its not quite as simple as them hiding stuff and IAG not finding it.


At my previous company, the Finance Director once told me -

Certifed Accountants keep the books...Chartered Accountants audit the books...And Management Accountants understand what the numbers mean.

Heathrow Harry
5th May 2018, 08:29
Business pages today's Times saying that not surprising Norwegian turned down the offer - trying to flush out other offers as the two main men own 27% of the shares for a start. Also raised the question of slots of LGW - BA would hold most slots at both LHR & LGW and that has to be anti-competitive

Hussar 54
5th May 2018, 10:59
Business pages today's Times saying that not surprising Norwegian turned down the offer - trying to flush out other offers as the two main men own 27% of the shares for a start. Also raised the question of slots of LGW - BA would hold most slots at both LHR & LGW and that has to be anti-competitive


And AF don't hold most slots at CDG and ORY ?

Nor LH at FRA and MUC and then add in GVA, ZRH, BRU and VIE in LH's case.

Hardly anti-competitive in it's true sense like operating a cartel - more a function of LHR and LGW and LCY being BA's home bases, that's all.

Heathrow Harry
5th May 2018, 11:22
Any deal would almost certainly would referred to the Competition Authority - given BA's past history who would be surprised???

Ex Cargo Clown
5th May 2018, 22:23
Any deal would almost certainly would referred to the Competition Authority - given BA's past history who would be surprised???

"past history" ? please explain.

Stuart Sutcliffe
5th May 2018, 23:15
Also raised the question of slots of LGW - BA would hold most slots at both LHR & LGW and that has to be anti-competitive
Tut tut, like so many here you are confusing IAG and BA of being one and the same, and they are not. IAG, not BA, would have the slots, and be able to parcel them out to any of the several airlines in their group.

Heathrow Harry
6th May 2018, 16:23
I think you'd find that most people out there think BA (a major component of IAG) has a long history of anti-competitive behavior

I really doubt the name makes any difference - it cannot be good for competition to have one airline owning the majority of slots at BOTH major UK airports

flyingmed
7th May 2018, 12:35
Although it seems like it would be anti competitive IAG has a few of its airlines competing against each other especially in Spain between Vueling and Iberia. If Norwegian would keep its own AOC and operating certificate it would have to be viewed as a seperate company from BA and therefore should not be anti competitive. Similar situation happening in different industries, just look at what News Corp and Rupert Murdoch have acquired.

Bidule
8th May 2018, 07:49
Although it seems like it would be anti competitive IAG has a few of its airlines competing against each other especially in Spain between Vueling and Iberia. .


Competing with codeshare on numerous flights and now having the same loyalty programme?

Heathrow Harry
8th May 2018, 08:14
Although it seems like it would be anti competitive IAG has a few of its airlines competing against each other especially in Spain between Vueling and Iberia. If Norwegian would keep its own AOC and operating certificate it would have to be viewed as a seperate company from BA and therefore should not be anti competitive. Similar situation happening in different industries, just look at what News Corp and Rupert Murdoch have acquired.
competition authorities dont look at arcane bits of paper like AOC's... they follow the money and control structure

flyingmed
9th May 2018, 02:43
competition authorities dont look at arcane bits of paper like AOC's... they follow the money and control structure
That's what should happen, lets see if the authorities react appropriately. IAG have already moved into markets and created monopolies without any real intervention from the authorities before so I would imagine they will manage to do it again. That's probably why they are very successful at what they do.

pilotflyingrocks
12th May 2018, 10:59
OSLO - The war of nerves around Norwegian goes into the next round - if the British Airways Group IAG attaches to take over the Norwegian price breaker, could CEO Willie Walsh get reinforcements on the boat: IAG is considering a joint bid with Ryanair according to media reports.


aero.de

https://translate.googleusercontent.com/translate_c?depth=1&nv=1&rurl=translate.google.com&sl=de&sp=nmt4&tl=en&u=http://www.aero.de/news-29168/Medien-IAG-prueft-Bietergespann-mit-Ryanair-fuer-Norwegian.html&xid=17259,15700021,15700124,15700126,15700149,15700168,15700 173,15700186,15700189,15700201&usg=ALkJrhjWD8OIR9x1pW6VbAUctSu7Swnp7A

JetpoweredMigrantWkr
15th May 2018, 14:03
I heard the same thing...

Skipname
15th May 2018, 14:55
Great, that's what we need.... more Ryanair.

MCDU2
15th May 2018, 16:29
Given that anecdotally Norwegians T&Cs would appear to be worse than FRs and there seems to be a core of pilots who flip flop between these loco type carriers then perhaps it might well be a wake up call to them all to finally pull their fingers out, find an airline to build a career at and join a bleedin union and stick up for themselves for the betterment of us all. Then again maybe pigs will fly and these guys and gals will pop back to the sandpit/asia [insert region as appropriate] in search of another low tax break gig.

The Range
15th May 2018, 17:12
https://www.flightglobal.com/news/articles/opinion-disruptive-norwegian-facing-its-own-upset-448536/

SSDK
15th May 2018, 19:05
Bad T&Cīs at Norwegian. Define bad? I made 123.000 pounds last year as a first year skipper, excluding pension... Is that really horrible? Yes we can do better in a few areas (and we are working on it), but to almost write it off as a place not to have a career is laughable and simply not true...

All i see are happy faces everyday overall. Miles away from what I experienced at "the harpe" and previous jobs I had.

(Ps. Sorry in advance for adding positivity on PPRuNe...)

Elephant and Castle
16th May 2018, 06:11
Why would IAG help Ryanair become a bigger competitor? it does not make any sense at all. If anything the idea would spur on other groups to buy Norwegian to avoid that hapening.

Joe le Taxi
16th May 2018, 16:43
BA absorbs NLH, and packages off the N-SH together with its own BA short haul for sale to Ryanair?

PAXboy
16th May 2018, 18:10
BA has considerable experience in nobbling opposition. Not just Laker and VS in long haul but a whole slew of domestic UK carriers (Manx, Brymon, etc.) have been taken over and curbed/eliminated. It is was large corporates do - irrespective of the actual business. They do it in finance, vehicles, retail. If you cannot beat the opposition, the SOP is to eliminate them.

VinRouge
16th May 2018, 18:14
Don't see an issue in it. It's just business.

Elephant and Castle
16th May 2018, 18:15
British Airways SH are not really comparable to Ryr as they are a premium brand,

BA is not buying Norwegian, IAG is . IAG already has 1 low cost airline that does compete head on with Ryanair, ie. Vueling.

bigjarv
17th May 2018, 22:24
https://centreforaviation.com/insights/analysis/airline-mergers-why-europe-needs-blue-sky-thinking-417376

bigjarv
18th May 2018, 08:07
Good read about the state of the European industry to add some truth to most of the nonsense written above....

https://centreforaviation.com/insights/analysis/airline-mergers-why-europe-needs-blue-sky-thinking-417376

fmgc
18th May 2018, 08:16
Good read about the state of the European industry to add some truth to most of the nonsense written above....

https://centreforaviation.com/insights/analysis/airline-mergers-why-europe-needs-blue-sky-thinking-417376

I don't see why it is wanting to compare European SH with N America and claim that it is all still smaller than aviation in N America. Utterly irrelevant.

UAV689
18th May 2018, 23:03
That article is the biggest load of rubbarb I have read. Why is it implying the US model is best? We have stringent anti competition laws, the EU can and does block large mergers. Competition is a good thing, drives innovation, I do not see how or why having that US model is a good thing. Certainly all it would do from a wages point of view is drive them down!

Good read about the state of the European industry to add some truth to most of the nonsense written above....

https://centreforaviation.com/insights/analysis/airline-mergers-why-europe-needs-blue-sky-thinking-417376

bigjarv
19th May 2018, 23:11
ďIf IAG were to acquire Norwegian and its 3% share of seats in Europe, this would just take the expanded IAG to the top of the European ranking by seats, with a share of 12% (to be more precise, it would be 12.24% Ė very slightly ahead of Lufthansa Group's 12.17%).Ē

Some statistics and facts like the one above Iíve copied out are what you need. The article is full of them. Forget about the America comparison. Just read some stats. Very interesting in my opinion especially after reading lots of miss information above. Norwegian is tiny.

bigjarv
19th May 2018, 23:23
That article is the biggest load of rubbarb I have read. Why is it implying the US model is best? We have stringent anti competition laws, the EU can and does block large mergers. Competition is a good thing, drives innovation, I do not see how or why having that US model is a good thing. Certainly all it would do from a wages point of view is drive them down!




You couldnít be more wrong. Profitability improves wages. Do you know how much the big American Airlines salary structures are? Their terms and conditions are streets ahead of Europe. Airlines in Europe are largely unprofitable so have to drive down terms and conditions to compete with each other on price.

Anyway I donít care what happens in America. I just wanted to put some facts into the conversation.

RexBanner
19th May 2018, 23:43
How much holiday do they get in the US compared to us, bigjarv? Significantly less. Crunch the numbers to take that into account and then see how streets ahead the terms and conditions are. Not quite such a difference then.

PAXboy
19th May 2018, 23:46
I cannot agree that improving profitability is ALWAYS good for staff. Nowadays, the high altar of the Shareholder comes first. Then the mgmt bonus, then the staff.

FRogge
20th May 2018, 06:14
In Europe the company with biggest profits offers the worst contracts (atleast amongst the big players)

bigjarv
20th May 2018, 22:38
Again... just wanted to put some facts in with that article to counter the usual rumours and news! If itís not useful or interesting sorry to waste your time.

Profitability is generally a good thing and brings the most positivity to most people. Insecurity and lean margins do not. Competition is vital to innovation. Monopoly (like google) with a single dominant player is not healthy for ďthe peopleĒ. I donít believe that is rocket science.

My opinion is that the European aviation industry needs to be more stable and more profitable.

bigjarv
20th May 2018, 22:48
How much holiday do they get in the US compared to us, bigjarv? Significantly less. Crunch the numbers to take that into account and then see how streets ahead the terms and conditions are. Not quite such a difference then.

Rex... itís still extremely good yes.

American pilot jobs news for airline pilots and aviation schools (http://www.pilotjobsnetwork.com/jobs/American)

Timpsi
21st May 2018, 07:45
Swedish media reporting today that IAG is preparing a new offer for Norwegian. Originally reported by the Spanish newspaper "Expansion" with no source reference. The rumour states 330 NOK per share.
Any actual proof of this?

macdo
21st May 2018, 08:05
https://uk.finance.yahoo.com/news/media-iag-plans-offer-1-055230465.html

21st May 2018, 11:00
https://uk.finance.yahoo.com/news/media-iag-plans-offer-1-055230465.html

https://www.pprune.org/images/icons/46.gifIf true, wouldnt take much more than last years profit for Mr O'Learys airline to take it over - petty cash !

bigjarv
21st May 2018, 18:36
Worth a watch. OíLearyís view....

https://www.bloomberg.com/news/articles/2018-05-21/ryanair-predicts-profit-decline-this-year-as-labor-costs-jump

Maxfli
22nd May 2018, 19:17
May 2017 fuel $500 per mt, today $750.
This challenges all of us not just NAS.

bigjarv
22nd May 2018, 21:35
Depends if you are hedged or not. NAS are not.

45989
23rd May 2018, 19:28
What a scumbag ! Great thing is he is looking so much older,,,,,

tomuchwork
23rd May 2018, 21:07
Given that anecdotally Norwegians T&Cs would appear to be worse than FRs and there seems to be a core of pilots who flip flop between these loco type carriers then perhaps it might well be a wake up call to them all to finally pull their fingers out, find an airline to build a career at and join a bleedin union and stick up for themselves for the betterment of us all. Then again maybe pigs will fly and these guys and gals will pop back to the sandpit/asia [insert region as appropriate] in search of another low tax break gig.

Clever man. HOW many legacy or even DECENT carriers are still around? I was in 2 legacy carriers myself during my career, both are no more(and both offered excellent terms and conditions, most likely that's why they are no more), I tried the sandpit(because there was nothing else decent around at that time), tried biz jets for a while till I figured out that that is another snakepit, returned to good old airline flying and ended up in RYR.
I was member of 3(!!) different unions in my pilot career, all of them sucked and did not help us at all - till the bitter end. Now we managed to initiate a turn around(maybe) in RYR management minds and still I need to read such BS from a guy that most likely just had the LUCK to end up on a better deal. All seasoned guys in this business know how it runs - best to be at the right time at the right place and your career is made. Others are not that lucky and have to earn their wings the hard (RYR) way. Nothing dishonest about, just a very hard school, nothing else.

We will see over the coming months how and IF that CLA(at least in Italy) is "falling" into place, most of us here wait to see if that happens or not. Simple as that. Would be rather stupid to force your way out(as many do) to end up in a very similar "gig"(Norwegian for instance but not exclusive).

RYR is not bad for guys who managed to get what they wanted - e.g. right base and/or right contract(direct for me is the only option). If on contract and far from home I would change as well(or better, I would have never joined).

Enough with that RYR bashing, have seen enough other jobs in my life that threat you worse(QR was one of them) and the better ones went upside down a long time ago. Few dinos still around, but honestly, I do not fancy BA at all and I am to old to join LH(and honestly I would never ever pay money to prepare for their idiotic test(which brought a mass murderer into a cockpit, let's never forget this). Nothing else good around - Cathay on new contract not worth it and the rest remains mercenary work(Korean, their Chinese brothers, the ME,...).

It's so easy to bash people about their choices. Fact is that RYR is far away from "dying on me" as so many others did during my long "career". Or do you suggest Airlines like Air France or Alitalia(lol) a safe place to be? Take a reality pill, be happy if you really(really really) ended up with a better deal(good for you) but stop distributing BS.

Would be a good thing if MOL would finally pull(or get kicked) out, I am sure that would improve the company a LOT.

directmisbi
24th May 2018, 12:14
CEO of norwegian B. Kjos hits back :

https://uk.reuters.com/article/us-norwegian-m-a/norwegian-air-ceo-says-summer-bookings-strong-well-covered-with-pilots-idUKKCN1IP1S8

Ryanair (RYA.I (https://uk.reuters.com/business/quotes/overview?symbol=RYA.I)) last year approached Norwegian with a proposal to take a stake of around 20 percent in the Oslo-listed carrier, a source with close knowledge of the discussion separately told Reuters.

ďI can confirm that Ryanair has shown interest in Norwegian Air, and that I brought it up with the board,Ē said Norwegian Airís Chief Executive Bjoern Kjos. A spokesman for Ryanair said the airline does not comment on rumor or speculation.

Luke258
26th May 2018, 09:35
Clever man. HOW many legacy or even DECENT carriers are still around? I was in 2 legacy carriers myself during my career, both are no more(and both offered excellent terms and conditions, most likely that's why they are no more), I tried the sandpit(because there was nothing else decent around at that time), tried biz jets for a while till I figured out that that is another snakepit, returned to good old airline flying and ended up in RYR.
I was member of 3(!!) different unions in my pilot career, all of them sucked and did not help us at all - till the bitter end. Now we managed to initiate a turn around(maybe) in RYR management minds and still I need to read such BS from a guy that most likely just had the LUCK to end up on a better deal. All seasoned guys in this business know how it runs - best to be at the right time at the right place and your career is made. Others are not that lucky and have to earn their wings the hard (RYR) way. Nothing dishonest about, just a very hard school, nothing else.

We will see over the coming months how and IF that CLA(at least in Italy) is "falling" into place, most of us here wait to see if that happens or not. Simple as that. Would be rather stupid to force your way out(as many do) to end up in a very similar "gig"(Norwegian for instance but not exclusive).

RYR is not bad for guys who managed to get what they wanted - e.g. right base and/or right contract(direct for me is the only option). If on contract and far from home I would change as well(or better, I would have never joined).

Enough with that RYR bashing, have seen enough other jobs in my life that threat you worse(QR was one of them) and the better ones went upside down a long time ago. Few dinos still around, but honestly, I do not fancy BA at all and I am to old to join LH(and honestly I would never ever pay money to prepare for their idiotic test(which brought a mass murderer into a cockpit, let's never forget this). Nothing else good around - Cathay on new contract not worth it and the rest remains mercenary work(Korean, their Chinese brothers, the ME,...).

It's so easy to bash people about their choices. Fact is that RYR is far away from "dying on me" as so many others did during my long "career". Or do you suggest Airlines like Air France or Alitalia(lol) a safe place to be? Take a reality pill, be happy if you really(really really) ended up with a better deal(good for you) but stop distributing BS.

Would be a good thing if MOL would finally pull(or get kicked) out, I am sure that would improve the company a LOT.
So on the one hand you say the unions didn't help and on the other you are waiting for something to happen. There lies the biggest problem. People that are waiting for something to happen. People that let other people do the hard work first. I've been in Ryanair long enough and it was and probably still is one of the worst airlines to work for. I've been based close to home and it still sucked. I've done union work and just like you many people didn't understand that the union is not just some institution that once you join does the work. We are all the union and we all have to move our ass to make a change. But I get it. It's easier to sit back and let the others do the job

BluSdUp
18th Jun 2018, 10:18
Wie Gets Ihnen?
Lufthansa is in talks with Norwegian and looking into making a bid!
Stocks up by 10%
Things are hotting up in the European market!

BluSdUp
18th Jun 2018, 11:22
Lets say Lufthansa buys Norwegian!
A good match Me thinks.
Lots of longhaul outside LHs present market ( UK , Spain and Scandinavia )

Scandinavia is a problem .
What would the Competition Board think? Does anyone here have any idea how thy think and act?
In domestic flights and intra Scandy NOR is at par with SAS, so LH-NOR would give the Star-Alliance 100 monopoly!
So that is not going to fly!
Europe 737NOR ops no problem and Long Haul , no problem as I see it.
The other LOCOs in Europe has neglected the Scandy intra market, and now would be the chance to get a chunk of it for free!
Oh dear, this is exciting , Indeed.

matt283
25th Jun 2018, 17:23
apparently all the unions have been called for a meeting in oslo, something is coming...

BluSdUp
25th Jun 2018, 17:41
The Norwegian Unions from the different bases I assume.
That would be from Norway Denmark Finland Sweden UK Ireland Spain Italy and USA.
Interesting.

matt283
25th Jun 2018, 18:16
Exactly, first time in company history meeting with unions from all the bases.

VinRouge
25th Jun 2018, 19:06
Exactly, first time in company history meeting with unions from all the bases.
Both IAG and Lufthansa share prices down considerably today.
IAG by nearly 4% and LH by over 5%. Interesting. This happened just after IAG made a bid.

Looks as if they are both trying to monster order books.

back to Boeing
25th Jun 2018, 19:56
All shares are down heavily today. Fear of a trade war is beginning to bite.

BluSdUp
25th Jun 2018, 22:08
Do You know when this meeting is?

matt283
25th Jun 2018, 22:36
4th of July...

SSDK
25th Jun 2018, 22:58
Wonder if it's just a rumor. Nobody seems to know anything in the unions.... But who knows....

lansen
26th Jun 2018, 13:11
The meeting on the 4th of July is supposedly only a cabin crew union meeting.

Smirf420
20th Dec 2018, 19:47
What is the deal up north?

The norwegian media has doom and gloom written all over NAX to the extend of full finacial chaos after new year.

The last 2 quarters were profitable, however a quick look in the Q2 report quickly reveals that Q2 had some magic to it. Q3 as always very profitable.....

Diddnít the flamboyant Norwegian CEO recently say that the harvest from the seed has begun which would be beneficial for customers, employees and investors?

222 new frames, some complete new models not commerciel tested - that was a gutsy call, even by norwegian standards.

Lotís of really good people in that company - any credebility to the norwegian media doom?

lansen
20th Dec 2018, 21:19
@Smirf420

The fact is that nobody of the cockpit crews and definitely non of the cabin crews know what is going on. Some people are optimistic, some pessimistic and some simply don't seem to give a damn.
On the intranet, no new info what's going on has been posted, except for Focus2019 which is the 3bilNOK savings plan for next year. It's like any airline. Everybody is spreading rumours and nobody really knows what to believe. Life goes on.

Speedbrakes Up
21st Dec 2018, 20:12
Cancelled all new joiners courses for the 787 next year......

Smirf420
22nd Dec 2018, 13:09
@lansen

3BnNOK - thats the total deficit from last year, more or less - atleast if you were to look at the financial report 2017.

Does anybody, except the board have any idea of the equity of Artic Aviation asset?

Im curios to whether the published debt is withholding actual debt of Arctic Aviation asset...

Breach of banking covenants could be restructured with investors will - however itís less than a year ago they had to inject cash for the exact same protection of above mentioned covenants so it would not make any sense if the money keeps fleeing left, right and center.

Having had a look back at the previous years financial reports one could silently wonder when the last profit from the core business excisted?

Anyhow, thanks for your reply - I really hope the best possible outcome for NAX. One thing is for sure, itís a great product and great people in that company.

Sailvi767
22nd Dec 2018, 17:10
What is the deal up north?

The norwegian media has doom and gloom written all over NAX to the extend of full finacial chaos after new year.

The last 2 quarters were profitable, however a quick look in the Q2 report quickly reveals that Q2 had some magic to it. Q3 as always very profitable.....

Diddnít the flamboyant Norwegian CEO recently say that the harvest from the seed has begun which would be beneficial for customers, employees and investors?

222 new frames, some complete new models not commerciel tested - that was a gutsy call, even by norwegian standards.

Lotís of really good people in that company - any credebility to the norwegian media doom?


https://www.newsinenglish.no/2018/12/20/norwegian-air-lands-in-more-trouble/

Jetavia
22nd Dec 2018, 23:53
I am not worried, Norwegian will get funding. One thing that would worry me though would be IAG taking ownership.. that would be a large disaster for everybody at Norwegian.. Willie Walsh go away..! Norwegian should be its own or if merging with anyone, then Lufthansaís Eurowings would be a good match.. sure would make Willie Walsh shit his pants 😉

3Greens
23rd Dec 2018, 06:16
Youíre not worried? You should be, they are massively over leveraged with debt, signs of an alarming slowdown in the US to which they are overexposed
amd cancelling courses and new deliveries. This company has expanded way way too fast and taken too much debt on the balance sheet. A savvy investor wouldnít waste a dime on this company. Why do you think IAG didnít move to buy earlier in the year? One reason, perhaps, is they did due diligence having taken a stake, and could see itíd be better business to wait for them to go bust and minesweep and cherry pick what they really want; rather than be saddled with the whole mess of a company.
Unfortunately, Iíve seen these signs many times before, they will likely collapse in 2019 imo. Sad times

Jetavia
23rd Dec 2018, 07:39
Well Norwegian is the pride of Norway, and the country do have people with much money that might invest. For instance earlier this year investors were offered to buy more stock at a good price, they were sold with no problems.

Norwegian is a longer term investment, and has to grow to survive in the long term. The company is aware that they need to focus on some things, thatís why 2019 will be a focus year on dealing with it, thus hitting the brake, cutting loss-making routes like atlantic out of Edinburgh and Ireland . Currently the company is overcrewed at some bases, why new courses are put at hold. New 787ís used to operate instead of AOG aircraft awaiting new engines from british Rolls-Royce. Rolls-Royce also due to write a big check as compensation.

Also new swedish AOC will likely be taking over for NAI, bringing more control back to Scandinavia.

Again i am not worried, as the company do have a plan on how to handle it. And do have tools in the toolbox to improve the economics. Mind you the Airbus NEOís were never intended to join the fleet, the deal was just to sweet to pass up. Most will be sold at a profit except some few LRís that will be kept. The MAX8ís will keep coming.

FRogge
23rd Dec 2018, 07:53
The top management seems to be very confident that they are able to save 3 billion NOK with their FOCUS2019 campaign, the expensive investments in Argentina are starting to pay dividend (possibly?), A321LR “game changer” gives possibility to open new long haul routes to be operated by narrow body. Maybe even Rolls Royce finds a solution to the engine issue.
So it could be a interesting year ahead or it could be that they don’t exist anymore, time will tell. But I think that the investors still have a strong believe in the company, otherwise they would have sold it last summer to IAG or LH or RYR.

3Greens
23rd Dec 2018, 08:18
I think it was more a case of IAG not wanting to buy, than NAS not wanting to sell. I hope they survive as his industry has had more than its share of pain. However, I just donít see it. Investors donít just pump money into a black hole. Rich people donít get rich by backing bad companies just because they need cash. If they default in their banking issues this week, they will lose their lines of credit, fuel companies and airports will want payments upfront; and in quarters where cash ainít flowiní, thatís bad news in this business.
i hope Iím wrong

directmisbi
23rd Dec 2018, 08:27
Regarding deliveries, we just received 3 brand new max in one day.
As for the 787 deliveries they are deferred for the next 10 airframes due to the RR isses. Recruitment to be resumed once the engine problems are fixed.
The financials are stressed at the moment, mostly due to technical writedowns of bank norwegian, the oil price taken a huge dive(write down on the hedge position) and huge costs due to the expansion.
IAG have already put in two offers for the whole company, Carsten Spohr of Lufthansa also expressing interest.
Companies are not take over other companies on face value, but on the PROSPECT of the investment and the possible RETURN on this. Norwegian is here to stay.

calypso
23rd Dec 2018, 08:48
I think it was more a case of IAG not wanting to buy, than NAS not wanting to sell.

That is a glib unsubstantiated statement that is at odds with all the known facts. IAG bought almost 5% of NAS at a cost of many tens of millions, a stake that it still owns (after all the due dilligence). Willie Walsh has stated many times that is remains interested in buying Norwegian. We know that two offers have been made for a price well above the current market cap. I addition another expression of interest was made by LH.

Norwegian has always been ambitious and has sailed close to the wind. A spate of technical problems with RR engines, an unfortunate diversion to Iran and the recent Gatwick drone woes have not helped. However Norwegian has a good product that consumers love, it owns a significant amount of assets and its partly owned by the biggest sovereign wealth fund in the world. Norway itself relies on Norwegian to connect a dispersed population over a large country, it won't let it go bust over some short term cash flow problems. If it needs a bit of breathing room I am sure it will get it from current and , if required, outside investors. Taking a breather from breakneck expansion is a good thing and will only make them stronger for the future.

The Bartender
23rd Dec 2018, 09:41
Well Norwegian is the pride of Norway....

Says who? With all the creative organizing and staffing, it is considered Norwegian by name, not by much else.
On customer satisfaction and loyalty (https://www.bi.no/forskning/norsk-kundebarometer/resultater-2018/) the norwegians rank Norwegian below both SAS and WiderÝe.

babemagnet
23rd Dec 2018, 10:09
https://www.forbes.com/sites/grantmartin/2018/12/22/discount-carrier-norwegian-air-faces-collapse-by-years-end/#4f2453544e9b

RexBanner
23rd Dec 2018, 14:31
Expansion is the only thing that is keeping the company going. They are paying for todayís flying programme with the forward sales for future flying. Theyíre a flying Ponzi scheme. I love how people say theyíre backed by the Norwegian sovereign wealth fund ignoring the fact that that same fund is unlikely to want to lose money in perpetuity. Low Cost Long Haul is historically unprofitable and a non starter. Nothingís changed in that respect and itís being found out again now.

Believe me when I say I bear the crews of Norwegian no ill will. Iíve been through a redundancy and itís not pleasant. For the good of the future Ts & Cs of our profession though Norwegian cannot disappear fast enough. Weíre all getting benchmarked against them. Whether is a good product for the consumer is a moot point. The product is being sold below cost. Iíd love to buy an LG OLED 85Ē TV for £100 and of course if they give me the opportunity to do that Iím gonna think theyíre a great company. The fact is though the economics do not add up in the long run.

Will be an interesting few months..

BluSdUp
23rd Dec 2018, 15:50
First I would like to say I hope they survive, for two reasons.
1 Our fellow pilots in Norwegian
2 The absurdly dirt cheap tqt I regularly pick up in my perpetual commute, they have saved me tens of thousands of euros.
Now for the facts.
DN, the Norwegian FT stated on Friday 21/12 that they need 160 mill euro to not default at the loan terms.
What is more ,as per date they have 30 Billion Nkr of interest carrying debt, that is ca 3.2 Billion euro, give or take.
A Ponzi Scheme indeed.
As for the Norwegian Government goes they will not do a thing. They gave the SÝrlandsbanen Train contract to some looser UK company and also sold the last SAS stocks.
On an optimistic note: If 2019 is politically and economically stable they will be ok.
Oh , I forgot we live in the most unstable time since the fall of the wall or perhaps since 1945.........

One of the problem Norwegian have super high seat cost for a so called low cost airline.
And having tried to make lowcost long haul with the most catastrophic airframe/ engine combo so fare in history, the NightmareLiner, they have been a bit out of luck.

As fare as terms for pilots goes we would be better off with them gone, in the long term.
But be careful what you wish for , MOL in Dublin has gambled on all Norwegian pilots begging him for jobs this spring so he can fly the summer program without cancellations.
AND so he can lower the terms he is about to sign with his own pilots.
I personally think that Norwegian has reached a form of critical mass so that present owners are more then willing to gamble more money.
I say gamble, as this is not risk allergic conservative investors we are talking about.
Also, due to a fair market share ,network and slots they are worth lots to any other medium or big airline.
OK
To the kitchen for PoppCorn

etudiant
23rd Dec 2018, 21:29
First I would like to say I hope they survive, for two reasons.
1 Our fellow pilots in Norwegian
2 The absurdly dirt cheap tqt I regularly pick up in my perpetual commute, they have saved me tens of thousands of euros.
Now for the facts.
DN, the Norwegian FT stated on Friday 21/12 that they need 160 mill euro to not default at the loan terms.
What is more ,as per date they have 30 Billion Nkr of interest carrying debt, that is ca 3.2 Billion euro, give or take.
A Ponzi Scheme indeed.
As for the Norwegian Government goes they will not do a thing. They gave the SÝrlandsbanen Train contract to some looser UK company and also sold the last SAS stocks.
On an optimistic note: If 2019 is politically and economically stable they will be ok.
Oh , I forgot we live in the most unstable time since the fall of the wall or perhaps since 1945.........

One of the problem Norwegian have super high seat cost for a so called low cost airline.
And having tried to make lowcost long haul with the most catastrophic airframe/ engine combo so fare in history, the NightmareLiner, they have been a bit out of luck.

As fare as terms for pilots goes we would be better off with them gone, in the long term.
But be careful what you wish for , MOL in Dublin has gambled on all Norwegian pilots begging him for jobs this spring so he can fly the summer program without cancellations.
AND so he can lower the terms he is about to sign with his own pilots.
I personally think that Norwegian has reached a form of critical mass so that present owners are more then willing to gamble more money.
I say gamble, as this is not risk allergic conservative investors we are talking about.
Also, due to a fair market share ,network and slots they are worth lots to any other medium or big airline.
OK
To the kitchen for PoppCorn


The take away is that the best informed and most interested observer, MOL, has concluded that they are toast and is acting accordingly. Most interesting.

hunterboy
23rd Dec 2018, 21:58
I think the OP has hit the nail squarely on the head. If reason prevails,Norwegian is probably too big to fail. However, with Brexit, looming US recession on the horizon courtesy of an illiterate US President, (insert own unforeseen event here), all it would take is a politician or banker or two to say ďsod it, Iím not going to throw good money after badĒ and that will be that.
why donít we lock the thread and all come back in 12 months to see what the result was? ��

directmisbi
23rd Dec 2018, 22:05
The forbes article has been updated :
And based on communication sent from the carrier this Saturday, the airlineís liquidity position is reportedly stable. As the end of the year approaches, Norwegian seems keen on having its debts fully settled.

dirk85
23rd Dec 2018, 22:26
https://i.ibb.co/kc836fC/6-AB709-AE-AE98-4887-9830-E5-E43046-DB34.jpg (https://imgbb.com/)

MCDU2
23rd Dec 2018, 23:24
The comments regarding FR are not supported by facts. FR is now unionised in most of its bases with collective agreements in place. Any influx of pilots from a possible Norwegian fail will not allow MOL to suddenly reduce the T&Cs. Sure he might try and renegotiate the agreements but as has been demonstrated across Europe the FR pilots are more than ready to stick it back to him and strike if necessary and protect their position.

directmisbi
24th Dec 2018, 09:18
https://media.uk.norwegian.com/pressreleases/update-from-norwegian-air-shuttle-asa-2817995

stormin norman
24th Dec 2018, 12:33
When I see a company putting out financial statements to justify their position their usually doomed.

lansen
24th Dec 2018, 12:50
When I see a company putting out financial statements to justify their position their usually doomed.

And I guess youíre a Harvard Business graduate, arenít you?
Ever thought about all the potential customers that doubt to buy tickets because of that Forbes bullshit article? Ever thought about our employees that get this a couple of days before Christmas?

victorpapa
24th Dec 2018, 13:29
When I see a company putting out financial statements to justify their position their usually doomed.
So by your logic if you say nothing your guilty
and if you defend yourself then your Ďusually doomedí
Not much in way of options?

krismiler
24th Dec 2018, 13:40
https://youtu.be/sKbCvlizk4w

annakm
24th Dec 2018, 17:19
https://youtu.be/sKbCvlizk4w

That doesnít really look much more than a pretty video of a Norwegian aircraft accompanied by cut and pasted extracts from the original Forbes article - nothing new.

Incidentally, Forbes have now amended the headline of the piece from :

Discount carrier Norwegian Air faces collapse by year end.

To:

Discount Carrier Norwegian Air Faces Financial Pressure As Year Ends.

Slight backtrack.

f

fruitbat
24th Dec 2018, 19:44
Selling aircraft may give short term liquidity but it increases long term debt. It may prolong the airline for a short while but itís going to make life even more difficult down the road. Dark clouds are forming in the global economy, Norwegian is unlikely to see improved trading anytime soon.

annakm
24th Dec 2018, 20:11
Slight? The new article.
https://www.forbes.com/sites/grantmartin/2018/12/24/norwegian-air-shares-optimistic-forecast-amidst-financial-scrutiny/#119389ee6c18

Mr Grant Martin seems to enjoy writing sensationalist articles. Maybe his talents are wasted with Forbes and he could get a job with a tabloid instead?
Thatís a complete turnaround from his contribution 48 hours ago when he was predicting the demise of Norwegian in 9 days time.

victorpapa
24th Dec 2018, 20:20
https://youtu.be/sKbCvlizk4w
Wonderful video 🤪
Do you do Weddings and Bar Mitzvahs?
Try one with the mark II Forbes article.

lansen
24th Dec 2018, 22:24
Am I the only one who thinks it's interesting that this guy mainly just writes about US carrier's (mostly United/Delta) new products and suddenly starts ranting at Norwegian? Paid by them?
Anybody taking that guy seriously must be delusional.

krismiler
24th Dec 2018, 23:14
That video was current when I posted the link, of course things change over time and if a newer one appears I’ll post it.

I would be more concerned about booking a trip on Norwegian than BA or EK. Make sure you pay by credit card, have travel insurance and a back up plan just in case. Up to 3 months advance booking wouldn’t concern me too much at the moment. Whilst passengers on short haul LCCs tend to book closer to departure date, it could affect the long haul bookings for summer holidays. Profit margins are thin and news such as this a few weeks out from when people are going to start booking isn’t good. Paying a few € more for peace of mind with a stable airline could be an attractive option for passengers.

Unfortunately news such as this will cost them business when they most need it.

booze
24th Dec 2018, 23:33
Unfortunately we had the same at WOW Air: media was ranting all the negativity possible, costing us a lot, but it was no surprise as it is a well known fact that some of the icelandic journalist are holders of SAGA gold cards from Icelandair...

Otherwise holding thumbs for the guys/gals at Norwegian. My sincere best for our fellow colleagues.

BluSdUp
29th Jan 2019, 09:12
It was a glorious day in Norway today as BjÝrn Kjos announced that Sterna Finance controlled by John Fredriksen has added 3 billion nkr to Norwegian in a stock expansion.
This has been in the making for some time , but the IAG hostile takeover had to be sorted first!
Happy day
Regards
Kpt B

WHBM
29th Jan 2019, 13:34
It was a glorious day in Norway today as BjÝrn Kjos announced that Sterna Finance controlled by John Fredriksen has added 3 billion nkr to Norwegian in a stock expansion.
I think this needs some clarification. The business media reports they are today SEEKING 3bn Kr in a Rights Issue. That is where those who currently hold stock are entitled to invest more at a discount, but can of course choose not to if they wish.

https://www.bbc.co.uk/news/business-47039303

3bn Kr is about USD 250m, in other words around the price of one Boeing 787-9.

The 3bn Kr just about covers last year's loss, so not apparent how it will assist future operations. As always when someone looks for money to cover a loss, you have to ask if the operation is loss making not only how they are going to convert it to profitability, but also how they are going to pay the additional money back, in the case of a Rights Issue of shares either in dividends (good luck) or in increased value of the shares, which they could then sell.

I think their aircraft lessors will understand the difference.

From the BBC

"Billionaire John Fredriksen"

Old adage I know, but which a number here will have heard.

Q : How do you become a Millionaire through airline ownership.
A : Start as a Billionaire.

BluSdUp
29th Jan 2019, 13:49
Trust me on this one: John " Storeulv" Fredriksen will not give you the time of the day without charging you for a look at his Rolex!
He would NEVER give BjÝrn Kjos a Ýre ( cent) never mind 3 billion ,unless he can make money.
You can come up with whatever prediction you want, but this is a whole hell of a lot better news the Wee Little Irishman came with.
The day John Fredriksen decide he wants to have a share of something it is usually not small scale.

SetStandard
29th Jan 2019, 15:09
BluSdUp, sorry, I donít think you understand, thatís not what has happened. NAS is planning on issuing new shares to its existing share holders so they get a cash injection of 3billion Kr (£268m). John Fredriksen, Bjorn Kjos and Bjon Kise have all agreed to underwrite the new share issue, meaning that if any existing shareholders donít want to purchase their new shares, then they will. Most shareholders would purchase their newly issued shares because otherwise their holding in the company becomes diluted.

No one has given anyone any money - shareholders are being asked to buy newly created shares so that the company has enough working capital going forward. I wish NAS all the best, I really do, however Iím glad I didnít buy shares in them.

BluSdUp
29th Jan 2019, 15:34
SetStandard
Sorry, but I perfectly understand what is happening and I have experience from chapter 11 representing the workers.
Later stock expansion and later bankruptcy.
The details might be different , but the big picture I get.
Fredriksen is underwriting potentially worthless stocks, according to some here.
He does that only if he can make money OR he can take over the whole shooting match and make a LOT of money.
For Norwegian it is guaranteed money, so no loan default!

Kjos has been pissing away money like a drunk sailor. Fredriksen is a strict Captain and he will make everyone work for the money and get the income up and cost down.
He could start by making the Cabin crew sell me a coffee on Thursday morning.
He will not get into the running of the company for now or maybe ever. But IF he does I suggest everyone gets their shit together.
Interesting journey ahead.

lambourne
29th Jan 2019, 15:39
BluSdUp, sorry, I donít think you understand, thatís not what has happened. NAS is planning on issuing new shares to its existing share holders so they get a cash injection of 3billion Kr (£268m). John Fredriksen, Bjorn Kjos and Bjon Kise have all agreed to underwrite the new share issue, meaning that if any existing shareholders donít want to purchase their new shares, then they will. Most shareholders would purchase their newly issued shares because otherwise their holding in the company becomes diluted.

No one has given anyone any money - shareholders are being asked to buy newly created shares so that the company has enough working capital going forward. I wish NAS all the best, I really do, however Iím glad I didnít buy shares in them.


You are spot on. For an investor this is a terrible deal and the future is so bleak how would anyone imagine buying more of such a loss making operation. I wonder if they will scrap long haul all together and hope to survive as a regional 737 operation. Their aircraft cost have to be sky high. Unloading the 787ís may be the last of the furniture to burn.

Icanseeclearly
29th Jan 2019, 16:12
BBCs take on it

https://www.bbc.co.uk/news/business-47039303

in the report it states that shares dropped by 16% April last year share price 308 today 99...

https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/NO0010196140NONOKEQS.html

not looking brilliant

SetStandard
29th Jan 2019, 16:43
BluSdUp,

Hey I hope you are right. I don’t run an airline, so I’ll leave the reasons how NAS has gotten into this position and what they can do about it going forward, to others. However I do know that a rights issue is realistically the last option available to a company to generate cash into the business. If the company can’t raise cash via profit generation or by borrowings then selling discounted shares to existing shareholders is the only way.

I would imagine that most shareholders would take up the rights issue if they are able. That would mean that John Fredriksen would have minimal exposure to the newly diluted shares. However, as you say, the issue is being underwritten by someone with deep pockets so hopefully NAS gets the cash it needs. NAS does however need to start getting cash into the business via profit generation - hopefully their turn around plan will assist this.

Interesting times, as you say.

golfyankeesierra
29th Jan 2019, 16:54
Mr Kjos explained that the airline was going to change its strategic focus from growth to making cost savings
curious to see where a lowcost is going to cut cost..

EIFFS
29th Jan 2019, 17:20
curious to see where a lowcost is going to cut cost..


MoL once said of Norwegian that ď only in Norway would Norwegian be considered to be low costĒ there is one hell of a lot fat to cut for sure.

For the last 5 years everyone has been saying they need to stop expanding if they want to make money, meanwhile Kjos talks about critical mass

ManaAdaSystem
29th Jan 2019, 17:20
So they are not going to grow anymore?
How many aircraft still on order?
How is the operation in Argentina going? Supposed to be 60 aircraft there? How many at the moment?

BluSdUp
29th Jan 2019, 18:56
I heard the nr of aircraft today as 164.

BluSdUp
29th Jan 2019, 18:59
And stocks at 120KR down some 5 or 10% at closing today.

ManaAdaSystem
29th Jan 2019, 19:17
And according to Wikipedia, 122 aircraft orders, 30 A321 LR and 92 MAX.
No growth?

Capt Ecureuil
29th Jan 2019, 19:42
Will someone in the know tell how the cost savings envisaged affects crew such as bases, pay, conditions, job losses etc as the rumours out there don't sound good and yet some are in celebratory mood and getting out the champers and cigars.

Da9441
29th Jan 2019, 20:19
And according to Wikipedia, 122 aircraft orders, 30 A321 LR and 92 MAX.
No growth?
I seem to recall something, suggesting that a fair amount of those will not make it into growth for Norwegian. Something on Flightglobal about it.


There are good parts of the business that are profitable so now world domination is off the cards there is hope it will pull itself back up.

As an outsider looking at it, it does seem rather haphazard how they are targeting growth, not clearly targeting a niche, just after everything. It's not like 20 years ago when most legacy carriers where caught unawares by new upstart low cost carriers, most are can compete very aggressively on long haul now and Norwegian can't rely on being cheaper as much, BA etc are much more competitive comparatively with Norwegian now than they were with Ryanair, EasyJet etc in the early days.

racedo
29th Jan 2019, 23:11
BluSdUp, sorry, I donít think you understand, thatís not what has happened. NAS is planning on issuing new shares to its existing share holders so they get a cash injection of 3billion Kr (£268m). John Fredriksen, Bjorn Kjos and Bjon Kise have all agreed to underwrite the new share issue, meaning that if any existing shareholders donít want to purchase their new shares, then they will. Most shareholders would purchase their newly issued shares because otherwise their holding in the company becomes diluted.

No one has given anyone any money - shareholders are being asked to buy newly created shares so that the company has enough working capital going forward. I wish NAS all the best, I really do, however Iím glad I didnít buy shares in them..

It is called a "Rights Issue" and in reality is pretty standard when you seek to raise money as it is cheaper than borrowing from a bank. If you own 10 out of 100 shares i.e. 10% and company makes a rights issue of 100 shares, then you have option to buy 10 so keeping holding at 10%. Not buying means someone else does and your holding will drop to 5% of the shareholding.

NAS shareholder list makes interesting reading as Norwegian Pension fund and other Norwegian institutions own a high %. It basically makes it takeover proof unless Bjorn agrees.

ManaAdaSystem
30th Jan 2019, 06:15
Norwegian Airlines pension fund, or the Norwegian state pension fund?

SetStandard
30th Jan 2019, 08:03
racedo understands it. However I would argue that it isn’t really a standard way to raise finance - it’s a last resort way to raise finance. Standard ways to raise finance are to generate cash into the business via profits or via borrowings from banks etc. I would suggest that both these convential ways are not an option for NAS for many reasons, hence the rights issue.

Asturias56
30th Jan 2019, 10:23
No - it's very common when you run into problems - the Banks ask a fortune in interest AND some lien on the assets, Govt aren't interested

So you dilute the current shareholders - they hate it but have little choice - if you own $ 100 of Norwegian stock before it's now worth only $ 90 (and the share price normally drops to reflect this) but you have little choice but if you don't agree then the you may own $ zero

SetStandard
30th Jan 2019, 10:38
Asturias56, exactly. Companies would only usually raise cash by way of a rights issue if they were unable to raise funds by other means - or as you say running into problems. The explination of a rights issue are pretty simple to understand, anyone with google could figure it out, the issue I see here is that there are no other options for NAS. This is their last option available to keep the business a going concern over the next few months. Hopefully, for the employees, shareholders and all other parties involved, it works.

MCDU2
30th Jan 2019, 11:17
At some point they are going to have to start generating cash (ie: sell bums on seats at a profit) in order to satisfy the debt covenants - or renegotiate them with the lenders. Robbing Peter to pay Paul and selling off their assets is a short term fudge.

racedo
30th Jan 2019, 11:53
racedo understands it. However I would argue that it isnít really a standard way to raise finance - itís a last resort way to raise finance. Standard ways to raise finance are to generate cash into the business via profits or via borrowings from banks etc. I would suggest that both these convential ways are not an option for NAS for many reasons, hence the rights issue.

As they are going for growth then not really surprising they have a cash issue, it is pretty normal when companys are growing quickly. Borrowing from a bank and they knowing you need the cash means they set the terms and if need to borrow $250 million then pretty much guaranteed they will be looking for $10-15 million in fees plus a high interest rate.

Borrowing from the shareholders is FREE aside from the fees and underwriting costs.

As they have someone underwriting it, it means they have the money either way. Underwriter is someone basically stating they will buy any shares issued that have not been taken up by existing shareholders for a fee. Company will have to restructure to stop the cash bleed.

Norwegian capitalism is slightly different from the vulture capitalism that exists in UK/US so they will be there for at least another year. Norwegian Govt see it as a strategic investment so would fully expect them via other means to support the company.

BluSdUp
30th Jan 2019, 13:42
Folketrygds fondet ( Norwegian State Pension Fund ) has 6% of the stock in NAS.
Up to 132Nkr now, one hr before Oslo BÝrs closes.
Popular , no! Recovering due to potential Yes , me thinks!
Gone fishing!

WHBM
30th Jan 2019, 14:36
If you are going for growth you would have all your funding etc lined up before you start. That's professional finance.

I still can't see what the Rights Issue will achieve long term given it is only the amount of the loss last year, and will be absorbed by that. The comparisons with the last year of Dan-Air are uncanny (established carrier, big increase in schedules, rights issue in the bottom season, that investment going straight out of the door again to pay past debts, etc).

SetStandard
30th Jan 2019, 16:22
As they are going for growth then not really surprising they have a cash issue, it is pretty normal when companys are growing quickly. Borrowing from a bank and they knowing you need the cash means they set the terms and if need to borrow $250 million then pretty much guaranteed they will be looking for $10-15 million in fees plus a high interest rate.

Borrowing from the shareholders is FREE aside from the fees and underwriting costs.

As they have someone underwriting it, it means they have the money either way. Underwriter is someone basically stating they will buy any shares issued that have not been taken up by existing shareholders for a fee. Company will have to restructure to stop the cash bleed.

Norwegian capitalism is slightly different from the vulture capitalism that exists in UK/US so they will be there for at least another year. Norwegian Govt see it as a strategic investment so would fully expect them via other means to support the company.

However they are not going for growth, they are trying to strengthen their balance sheet according to Bjorn Kjos. The type of capitalism doesnít come into it. As I say, I wish no ill on the company or their employees, however trying to raise cash from a rights issue is the last resort to funding because they are unable to raise it elsewhere. In simple terms, they are not generating enough cash from their on going operations to cover what they need to cover and the banks wonít lend them any more money.

The underwriters would have judged that 3billion KR is what they require to survive the winter. Hopefully in summer, after their turn around plan has started, they will be able to generate cash from ongoing operations to cover them going forward.

Its reletivly simple however, no money is free. The underwriters/shareholders will want their investment back at some point plus a return on it. The only way the company is going to be able to provide that return is if it starts making a sizeable profit, soon. The underwriters obviously think thatís achievable and good on them too, I hope they are correct. However NAS is running out of options, it quickly needs to start to make a profit from flying people from A to B.

Clop_Clop
31st Jan 2019, 02:50
Folketrygds fondet ( Norwegian State Pension Fund ) has 6% of the stock in NAS.
Up to 132Nkr now, one hr before Oslo BÝrs closes.
Popular , no! Recovering due to potential Yes , me thinks!
Gone fishing!

Yeah will be interesting later on will be what price Norwegian now with "sturulven" are planning for the issue but feels brave buying into this, maybe the price is not even decided yet but the capital the aim to issue is already known so what's left if the price of the issue and the dilution.

Existing want shareprice to stay high to keep dilution minimal. Also market should converge towards the issue later on as the date of issue gets nearer so could be a swing coming up if the issue is discounted. Thats the game more or less here i believe. Next stop for the voyage is the finer details about the issue...

directmisbi
1st Feb 2019, 07:08
According german Handelsblatt reporting on Norwegian, Lufthansa and IAG :

"The German airline also re-dipped its toe in talks for Norwegian, in case it was capable of bumping rival IAG, out of the bidding. Although IAG on Thursday said it was no longer interested in Norwegian, Lufthansa sources say the move, which hammered Norwegian`s shares, was just a strategic ploy to pressure Norwegian CEO BjÝrn Kjos into signing a deal"

Norwegian media today report that the Rights Issue was a plan B ready to be launched , in case the price IAG offered was below the value Kjos wanted for the company...Kjos says the Rights Issue was ready from november, but they couldn't launch before the take over talks had ended.

racedo
1st Feb 2019, 15:28
If you are going for growth you would have all your funding etc lined up before you start. That's professional finance.

I still can't see what the Rights Issue will achieve long term given it is only the amount of the loss last year, and will be absorbed by that. The comparisons with the last year of Dan-Air are uncanny (established carrier, big increase in schedules, rights issue in the bottom season, that investment going straight out of the door again to pay past debts, etc).

Hardly as no one will commit the type of money needed. Everybody thinks shortterm.