Hard times for Norwegian

[BehindBlueEyes]

As you would expect, all dates in June are unavailable on the Norwegian.com website but, not sure if it’s a glitch, but it appears there are flights available to book from July.

[nosmo king]

It’s being reported in Norway that Norwegian are increasing their fleet from 8 to 20 aircraft and opening up 70 routes from the 01st of July.

[737Driv3r]

restarting now with 76 routes indeed. Hopefully more in the future and many of us back 🤞

[nosmo king]

https://media.uk.norwegian.com/pressreleases/norwegian-to-restart-short-haul-flights-from-the-uk-and-serve-a-wider-european-network-from-july-3013933

[oldchina]

"She told me to sit anywhere
So I looked around
And I noticed there wasn't a chair ... "

Isn't it good ...

[Kirks gusset]

More than 300 pilots and 600 cabin crew from the company’s bases in Norway will operate 20 aircraft, with about 200 pilots and 400 cabin crew being brought back from layoffs, the budget carrier said.
Hmmm?
What about the UK and Spanish Crews? will they get a shot at "direct employment"

[BehindBlueEyes]

Doesn't look like it so far...

[737lpa]

In the case of Spanish crews, this is to be decided in court probably at the end of the summer. Having said that, a favorable sentence of "direct employment" as you called it, would only mean that norwegian is liable for the expenses associated to redundancy packages and not necessarily that they're going to keep the crew. It's just that it won't be for free.

What's important right now is that norwegian remains alive and that it's able to ramp up slowly but surely. For this small increase in the summer, only crews from Norway will be brought back to work, which is a little start.

[Ned Kelly]

It is amusing reading here sometimes.

So many people who all believe they know how Norwegian should have been run in the past or going forward.

Not enough misery at your own airlines to worry about?

Why all the speculation that Norwegian will need plenty of B737 and B787 pilots to start up again and that there are not enough
aspiring pilots or experienced pilots from the middle east to make that happen.

Are you all oblivious to the fact that many if not all of their current pilots and recently laid off pilots (many of whom are still current with LPC and OPC)
are available to fly again. Especially since they have not gone elsewhere in the current climate.

Why would they be struggling to find people and typerate them or do difference courses for other pilots when they have a ready supply.

Are you suggesting that they should not re hire their old staff, and why should´t they? Because some guys are prepared perhaps to snatch up
the jobs by undercutting salaries? If you are prepared to go down that road, then at least you already know what kind of airline you have joined.

Seeing how many pilots will be available in the market after corona I would not be surprised if many of the guys who have blamed Norwegian
for everything that is wrong with the industry are prepared to join ahead of laid off pilots just to save their own ass.

Reading some of the comments makes it sound as if Norwegian are trying to start a long haul operation from scratch.

[Meester proach]

300 pilots back, 2700 to go !

[vikingivesterled]

Norwegian splits with its staffing partner OSM Aviation and pays the outstanding debt in shares according to this stock announcement:
https://newsweb.oslobors.no/message/510029

Press in Norway reporting it as Norwegian taking in 3000 employees in US, UK and Spain as directly employed,. But no return to work before traffic rebounds.
Natural that New Norwegian takes over the full and whole responsibility for the companies that employs our staff says Schram.
In norwegian: https://e24.no/naeringsliv/i/3JW9pv/norwegian-trekker-seg-fra-samarbeid-overtar-3000-ansatte-fra-bemanningsbyraa
Press release: https://media.no.norwegian.com/pressreleases/norwegian-gaar-ut-av-osm-og-overtar-hele-ansvaret-for-3-000-piloter-og-kabinansatte-i-usa-spania-og-england-3022209

[DutchExpat]

3000 staff now back into the family!

https://www.google.es/amp/s/www.paddleyourownkanoo.com/2020/07/17/norwegian-air-shuttles-brings-pilots-and-cabin-crew-in-house-takes-over-direct-responsibility-for-staff/amp/

[Kirks gusset]

Pretty much in line with the announcement in May about the bail out of shares and restructure, the " new Norwegian" will take crews on "flexible" contracts and PBH for the airframes, makes sense when cash is tight.
If the pilots at least get LPCs and keep current, even if they earn next to nothing, at least they will be well placed when/if things pick up. "the email" to crews to follow.

[SteinarN]

According to Leeham News and Analysis (https://leehamnews.com/2020/07/21/hotr-norwegian-claims-1bn-in-damages-from-boeing/), Norwegian have filed a claim against Boeing for more than US$1B.
The claim involves cancellation of all the 110 Max' ordered, including the 18 already delivered. Norwegian claims fraud, breach of contract and gross negligence by Boeing. They also claimes Boeing produced an airplane that was unsafe, covered up design issues and claimed the MAX is virtually identical to the 737 NG, requiring no unusual transition training would be needed.

Returning airplanes
NAS also wants to return its 18 737-8s that were delivered but which have been grounded since March 2019 in the wake of two fatal MAX accidents with Lion Air and Ethiopian Airlines.
Norwegian filed claims for “in excess of $1bn.” It seeks court authority to rescind contracts for 110 MAX aircraft (including ones already delivered) and an unspecified number of 787s, including some already delivered.
------
Norwegian claims fraud, breach of contract and gross negligence by Boeing. It claims BCASE is charging for maintenance services not delivered.
The claims are common to others that MAX customers made: Boeing produced an airplane that was unsafe, covered up design issues and claimed the MAX is virtually identical to the 737 NG, requiring no unusual transition training would be needed.

[Kirks gusset]

https://edition.cnn.com/2020/06/30/business/boeing-737-max-norwegian-air-cancels-orders/index.html Looks like Boeing think the 97 Aircraft were cancelled due to financial problems at NAS. The deposits may or may not be returned, but could be off-set against future expenditure.
The compensation for the 787 is another issue. Its all rather grey area, but infact 3 separate legal issues as far s the Courts will be concerned.
NAS may be successful in the 787 engine issue and associated costs, unlikely in the 97 Airframes and little chance of returning the 18 737-800 just because they don't need them or cant afford them. Lease values have fallen 22% and CMR values down about 6M per airframe, Not attractive to have them sitting around either with NAS or with Boeing

https://www.ch-aviation.com/portal/news/93260-norwegian-blasts-boeing-sued-in-dublin-in-despair-over-aid

[Maxfli]

Not sure what effect this will have or how critical such a guarantee was to any recovery model.

https://www.aerotime.aero/gabriele/25687-sweden-rejects-norwegian-credit-guarantee

[Copenhagen]

Low-cost carrier Norwegian has warned that it will require further financing next year to survive the winter as coronavirus-related travel restrictions continue to hamper the recovery in air travel.

Norwegian today posted a net loss of NKr5.3 billion ($595 million) for the first half of 2020, a period in which passenger levels dropped from 18.1 million to 5.3 million as international passenger flights came to a virtual standstill in the second quarter.

https://www.flightglobal.com/strategy/norwegian-warns-more-cash-needed-to-survive-crisis/139934.article

[Meester proach]

It’s not really surprising when carriers traditionally make money in the summer to survive the winter.

I think the hibernation idea is a good one , if they can hit the ground running in 2021, especially having seen some other LCCs load factors at present - appears to be a waste of fuel in a lot of cases.

[ManaAdaSystem]

15-17 Dreamliners to be sold. That is nearly half of the longhaul fleet, but they are not giving up on the longhaul part.
About 10 737 aircraft already sold.

[SWBKCB]

and where's the market for them?

[Tartiflette Fan]

I would imagine the same place where there are currently buyers for airline shares i.e. speculative purchasers who believe the buying price will be so low that they stand a very good chance of making money when ( in their view ) markets swing back to some kind of normality.

[uncle-traveling-matt]

Well, it's none-existent at the moment, so I guess they are talking about the leased frames going back to its owners. Shouldn't be too difficult a maneuver, because its the same leasing companies who in turn own Norwegian...

[golfyankeesierra]

spare engines? 🤔

anyway, it surprises me they apparently own them.

[ManaAdaSystem]

uncle-traveling-matt

Not what they said. They say it’s going to be difficult to sell these aircraft, due to the current marked. Moving an aircraft from Norwegian to one of the leasing companies who owns Norwegian doesn’t make much sense. Or money.

[oceancrosser]

Is it better for the lessor now turned shareholder to keep the aircraft at Norwegian, stored but racking up a monthly claim of lease that will never be paid and digging Norwegian a deeper hole?

[Kirks gusset]

Didn't they convert the leases to PBH, hence no debts, other than planned maintenance being racked up, being stored for free, it's a good deal.
The cash flow issues will start to bite in the UK with the winding down of the furlough scheme, not so much in Spain were the state "emergency fund" allows crews to be laid off without pay and just get a miserable 1000 euros or there about, hence other that social taxes, again NAR have no outlay.
They really need a bunch of funds quickly to keep solvent, not sure how they claim to be able to survive 6/7 months with no income as such, but in fairness the management are trying hard..although with shares falling it's not attractive to investors in any shape or form.
And with the doom and gloom merchants at LGW it's not surprising the LH seat take up is down 97%

[uncle-traveling-matt]

uncle-traveling-matt

Not what they said. They say it’s going to be difficult to sell these aircraft, due to the current marked. Moving an aircraft from Norwegian to one of the leasing companies who owns Norwegian doesn’t make much sense. Or money.

Geir Karlsen (CFO) specifially mentioned that the leasing companies would be part of the solution. The power by the hour arrangement and future grace of 20 percent on the leasing rates going forward plus the fact that leased frames are basically provided free of charge until april next year, proves that thesis.

[Rt Hon Jim Hacker MP]

I’ve been through this. There is no way that Norwegian can survive this winter. Riddled with debt and no product to sell.

Let’s see who pops up next to revolutionise low cost long haul.....

[Meester proach]

It’s been said before, but thanks for your kind wishes.

If I was also in aviation I’d be hoping 3000 737/787 experienced pilots were not dumped on the market .

[maxpeck]

Don't think there are 3000 pilots left in Norwegian.

[Meester proach]

You think they all found jobs elsewhere ??

[Longtimer]

Thread first started on Sept 2019 and here we are a full year later........

[maxpeck]

You think they all found jobs elsewhere ??

No, they are already on the market.

[Meester proach]

Is there even a market ? I doubt it unless your thinking about 5 years hence

[maxpeck]

Not really no. But that's not the question you asked me.

[Meester proach]

Ok, so in total from those already left and those who remain, would be near 3000

[FRogge]

There is many airlines around the world that will go bankrupt during incoming winter unless they get money from the outside (etc. state aid, cash injections by owners...)
Norwegian is obviously one of those and it's not a secret as Schram talked about it openly few days ago.

[jowong1]

and where's the market for them?

should have converted them into freighters and get into the cargo business and have a low-cost cargo division

[Kirks gusset]

The traffic figures for August reflect the state of uncertainty in the industry:
https://media.uk.norwegian.com/pressreleases/norwegian-august-2020-traffic-figures-heavily-influenced-by-travel-restrictions-and-drop-in-demand-3031945
As the CEO constantly points out they need liquid cash to keep going, the LH flights from UK are available from early Dec but take up is pretty non-existent as the boarders are closed and travel insurance/ credit card claw back won't cover if you book to a "closed destination" knowing that at the time. If Trump gets his act together and opens USA up they may have a chance, otherwise LGW LH will be much delayed, having said that, its doubtful the company would want to bleed cash into non profit making routes, as pointed out again by CEO :"and concentrate supply in line with demand."

[MCDU2]

Of course it would have nothing to do with savvy consumers being unwilling to give Norwegian their hard earned cash in advance when there is a risk of them going boom??

[Vokes55]

There’s a risk of any airline going “boom” right now.

[Kirks gusset]

“With such a bad summer as we’ve had this year, we don’t have the financial muscle to get through the winter,” Norwegian Air’s chief executive, Jacob Schram, told newspaper Dagens Næringsliv (DN

But: Maybe the former CEO and Execs could help bail out? moral compass drift off the scale one thinks!
Bonus party over
Norwegian’s part of the requested bailout comes just after DN reported on bonuses paid to top Norwegian Air executives last year, just before the long-troubled airline’s founder and former CEO Bjørn Kjos stepped down. Kjos’ massive intercontinental expansion plan ended up leaving the airline with troubled aircraft from Seattle-based Boeing and huge debt. Kjos reportedly nonetheless approved bonuses of between NOK 2 million and NOK 6 million to four members of management, while also paying sky-high fees to external consultants.

The bonuses were paid out several months before the Corona crisis hit, and new CEO Schram has stressed that the days of such high extraordinary pay are over, but it’s all provoked labour unions at a time of massive layoffs. Newspaper Dagsavisen editorialized on Monday that all the talk about “solidarity” among management and workers at Norwegian Air loses credibility in the face of such high pay for a few leaders. Kjos has said he can’t remember the bonuses doled out before Norwegian Air reported huge losses for 2019.

[BehindBlueEyes]

So much for, “We’re all in this together Red Nose Warriors!”

[EIFFS]

The booking levels to the US are a bit miserable to say the least but there is demand, there was even talk of using a 737 to restart JFK with a 100 passenger limit, but APD killed it anyway

[SarcenStone]

Do Norwegian’s 737s now belong to them, as in the company, or are they still leased from a third party? I’ve been following this thread for a while and am still no clearer.

[Meester proach]

EIFFS

That’s a shame but I expected it. I don’t think any thoughts of xmas market to JFK will be on without a miracle - we will have to see if they make it to the reboot in March

[SWBKCB]

Kjos has said he can’t remember the bonuses doled out before Norwegian Air reported huge losses for 2019.

Classic...

[Kirks gusset]

Their stock price has fallen form 4 euros to .083 so pretty much worthless. It helps the Norwegian Govt extended the loan scheme until Feb 2021 but based on predicted revenues they will still run out of cash this year. LH program from LGW will be slashed

[Meester proach]

Source ? Or do you just make up your predictions

[Capt Scribble]

0.93 NOK and at 11 to 1€, that makes it about .084 on my calculator. https://www.bloomberg.com/quote/NAS:NO

[Kirks gusset]

Meester, perhaps the fact that the round trip to Miami with BA in Dec is £376 and with NAS is £829 is not exactly encouraging travel, thats if you can travel at allTravel to USA is subject to entry restrictions

British nationals cannot enter the USA if they have been in the UK, Ireland, Schengen zone, Iran, Brazil or China within the previous 14 days
If you are eligible to enter the USA you must be prepared to self-isolate for up to 14 days after arrival

See Entry requirements (https://www.gov.uk/foreign-travel-advice/usa/entry-requirements) for more information before you plan to travel.

The share price is not a prediction, more of a kind of "fact"

To gain any sort of traction they should delay LH ops until Feb/Mar 2021 when hopefully they would be in a position to resource them properly.

[Meester proach]

The share price is but you seem to have drawn a lot of conclusions from example of a ticket price - ie not enough money for winter and “ slashing LH from gatwick “ - where are these two statements from ?

[Tartiflette Fan]

https://www.telegraph.co.uk/business/2020/09/28/norwegian-could-nationalised/

"Norwegian could be nationalised under radical plans being considered by government officials in Oslo.Political leaders in Norway’s ruling coalition have indicated that they favour bailing out the struggling budget carrier (https://www.telegraph.co.uk/business/2020/04/14/norwegian-shares-plunge-last-ditch-rescue-plan/) rather than the older flag carrier SAS.

Airline bosses have held talks with the government last week, local media reported."

[Ancient Mariner]

It should read; former flag carrier SAS. Norway sold off its shares some time ago.

[uncle-traveling-matt]

Exactly. Last batch of shares in SAS were sold off in 2018. Due to the current circumstances with covid19, SAS tried to persuade the Norwegian government to retake a stake in the company, but Norway wisely refused. The Norwegian politicians seem to think it is better to keep a healthy competition in the Nordic market, and support Norwegian. More to come over the next weeks.
As for LH, CEO confirmed that a decent part of routes we're healthy and profitable, hence expect to see red nosed 787’s operating out of LGW again,once restrictions are lifted.

[Kirks gusset]

From the CEO: https://app-cdn-test.ft.com/content/7f6f0705-2afa-4326-8af6-6c47f2f0e8e6?sectionid=companies

The whole point of reducing operations to a minimum was survival, the taking over of the shares in the service companies effectively plugged the court actions in Spain, kept the pilots on basic state aid, although OPCs are being done etc. If they try and re-launch LH ops before financially capable it will be good night merry Christmas.. a bit of patience is needed.
And ticket price is not the only consideration when booking, with BA if your plans are effected you can change your fight dates and destination with no fees.. With NAS you can change your flight date OR get a refund.
Agreed, once Covid restrictions are eased the USA routes may pick up, but these days everyone is price sensitive and looking for security.

Perhaps this explains things a little clearer :

https://www.travelweekly.co.uk/articles/384449/norwegian-air-needs-more-cash-to-survive

The old chestnut of card companies withholding liquidity crops up again ! not the first airline to suffer..

[Meester proach]

Are OPCs being done outside the Norwegian 737 lot who have kept going ?

I’ve heard of some paying to renew 787, but personally I really dont t see the point yet - keep your powder dry etc.

[Kirks gusset]

Need to keep an eye on the share prices after 9th October:

https://www.marketscreener.com/quote/stock/NORWEGIAN-AIR-SHUTTLE-ASA-1413204/news/Norwegian-Air-Shuttle-ASA-NAS-Additional-conversion-of-lease-debt-to-perpetual-bonds-31385225/

Another deal done with the creditors for the end of lease maintenance obligations, the "bonds" will be tradable 9th October and 9th Dec.

[ManaAdaSystem]

Back to square one.
Why would the Norwegian government pay a Chinese/Irish owned airline to fly between LGW and the US?

[FRogge]

Because they believe that one day you can make money on those routes and pay back the debt (or at least some of it)

[calypso]

Because the Irish and the Chinese are only transitional owners, Norway needs an airline to connect the regions to each other and to the outside world, SAS needs a competitor to keep prices down, nobody in Scandi wants or trusts Ryanair and an airline serving just Norway does not have the size and economies of scale to be competitive. Having shafted the foreigners with the debt equity swap Norwegians will buy back the company for 1 Kroner and go on to make a nice pile.

[ManaAdaSystem]

You forget it’s going to cost some 12-15 billion NOK before they can buy the company for 1 NOK.
Not saying it’s impossible, but that is a lot of money to pay for jobs in other countries.
The way this company is organised continous to be a problem for them.
The company was i bad shape before Covid, something a lot of people seem to have forgotten.

[Icanseeclearly]

What are the legal / EI competition implications of a state owned airline, Norwegian, operating out of the UK to the US / Southern Europe (potentially with G registered aircraft and a UK AOC) in direct competition with non state owned airlines?

Think it would open a whole can of worms and a lot of legal challenges from the likes BA / Virgin / EasyJet / Jet2 especially after the UK airlines appear to have been thrown on the scrapheap by Boris and his chums, potentially interesting times ahead.

[Kirks gusset]

If the Norwegian Government to take a stake in the airline, considering BOC is Chinese state owned they would be in bed with a whole myriad of partners. They would have to shell out too much to take a controlling interest in the company as the existing shareholders would need their equity bought out. Norwegian Air Uk is the Uk AOC holder and as such would not be considered a "State owned" airline.
It may be that the new Norwegian would get preferential treatment in the home country but outside of Norway it is just another carrier.
One issue is who will now pay the staff in the UK given the Furlough scheme changes and if the Norwegian government will want to pay foreign wages with state funds. In Spain it's the Spanish Government meeting the costs apart from social taxes, not the same here in the UK.
A condition of any AOC is "financial stability".
From 9th October onwards will be an indication of how the markets react.

[Paul737]

Will there be a Norwegian outside Scandinavia?

[Kirks gusset]

The suggestion is a temporary solution whilst/ if the airline can generate any liquidity :
The government stated that there was an option to bail out the struggling air carrier rather than revive Scandinavian Airlines, which is already partly owned by Denmark and Sweden. The government officials considered that taking a majority of Norwegian Air stake would result in the temporary airline’s nationalisation. The long-term nationalisation of the carrier would be hardly possible as there are law-related issues with other European airlines such as Lufthansa .

The airline has already given multiple hints that it would need more financial support from the government. Earlier in September 2020, Schram warned that the state loan guarantee was not sufficient enough to get through COVID-19 crisis. The airline claimed that it would need a new rescue package despite the already-secured €285 million (NOK3 billion) state aid guarantee.

[fruitbat]

Not good news when a heavyweight like Wizz starts competing on your domestic routes..

https://www.routesonline.com/news/29/breaking-news/294213/wizz-air-to-shake-up-norways-domestic-market/

[Dualbleed]

And one of the Braathen brothers starting up another airline too.

[Kirks gusset]

fruitbat

Wizz is cash rich at the moment and well placed to see things through the next 2 years. The call the Norwegian government will have to make is whether to pour money down the drain with one operation, which is already under financial pressure and scrutiny, or sit back and let Wizz create new jobs and sustainability within their own domestic markets. Most governments are just interested in employment statistics and if Wizz create new positions and bring revenues to the country that may influence their decisions. What is bizarre is that the LH routes "on Hold until 03/21, according to the management "t are still being advertised from UK from Dec. Being bullish is one thing but surely this strategy is a home goal and will destroy any credibility the airline has left. Everyone would dearly like the LH to kick start again for the sake of all the crews.. but this nonsense?

https://www.travelweekly.co.uk/articles/388230/norwegian-air-chief-warns-of-prolonged-covid-crisis

[A321drvr]

The main problem with Wizz is the quality of jobs they create not the quantity, unfortunately. Hopefully Norwegian politicians see this and they can put a clear message through to their voters on the subject. I would be extremely sad to see Norwegian go as well as Wizz thrive (even though i have many friends working for the latter due to lack of better opportunities at the moment).

[Meester proach]

I should think the Norwegian government doesn’t want wizz anywhere near the important inter Scandinavian routes

[ManaAdaSystem]

From Scandiland news: They now consider closing their Gatwick base.

[Old King Coal]

ManaAdaSystem.....in line with what you say, the rumour I hear suggests that Norwegian's short-haul ops at LGW will cease on 30th November and any folk presently on furlough will correspondingly be made redundant.

[EIFFS]

Kirks gusset

I'm not sure the Norwegian government will see WIZZ as a suitable replacement, most of the local jobs would be low paid line maintenance, cabin crew a few pilots and any profits from revenue will go back to WIZZ home country, WIZZ cost base similar to FR which tells you all you need to know about well paid jobs, Oslo will step in to Norwefgian.

[EIFFS]

I suspect that there will be many airlines in state ownership before this is over, not much point having a trillion dollars rainy day sovereign wealth fund and not using it when it pisses it down, Norway is heavily dependant on tourism, the plan would be to privatise it downline, a bit like the SNP with Prestwick except that the Norwegians are well educated and the SNP are thick as mince.

[SWBKCB]

Don't Norway and the EU have an Open Skies agreement?

[brushcounsel]

any profits from revenue will go back to WIZZ home country

So, to Switzerland?

Also, how much of Norwegian's profits has Norway been getting recently and what's their ROI on current aid?

[SaulGoodman]

I don’t see Norwegian in their current shape and form surviving however:

Norway might be interested in a controlling stake in a “national” airline serving OSL. If Norwegian can renegotiate its leases and Norway can buy the airline on the cheap it might be viable in the long term in a much smaller form. Look at the Aerlingus model connecting Europe and North America or Finnair between Asia and Europe. Competing on a short haul market with WIZZ or RYR would be a complete death sentence as is LH loco.

[Kirks gusset]

Tourism may well be important for Norway, as with every other country, however, the tourism income results from people visiting the county and spending internally. Of course there is an element of infrastructure revenues from taxi, airport staff etc. The means by which tourists get to the county matters not, and in the case of NAS, most of the "revenue" is hoovered up with the historical debts , most of which reside outside Norway. The proposed closure of LGW SH ops was always on the cards, there was no way the Company would stump up wages for Foreign workers when haemorrhaging funds at home. Perhaps the cost savings may be enough to allow the LH ops to start again.
Norwegian Air’s short-haul flights from Gatwick will not be affected as they are operated by pilots and crew based in the Nordics, the spokesman said.
One assumes the LH crews will be subject to the "flexi contracts" agreed at the May re-structuring meeting..i.e paid when needed to fly.
Sad times once again, Spain only costs them social taxes so may be safe until the summer when things should pick up... unless Wizz take advantage of the routes,
The release of the locked up shares yesterday (9th) resulted in a 24% fall in share prices.
https://www.marketscreener.com/quote/stock/NORWEGIAN-AIR-SHUTTLE-ASA-1413204/news/Norwegian-Air-Shuttle-ASA-NAS-Additional-shares-and-perpetual-bonds-released-from-lock-up-31509812/

[Meester proach]

I can assure you no one I know of in LH, has any sight , or knowledge of “ flexicontracts “, or any such thing.

[samsara]

I have absolutely no idea where you get your information from but a sizeable chunk of it posted on this thread is utter rubbish .

[Kirks gusset]

Probably the same "rubbish" that was presented at the investor relations meeting in April before the May bail out agreement and the vision for the "New Norwegian"

Increased use of seasonal agreements to manage winter trough


https://www.norwegian.com/globalassets/ip/documents/about-us/company/investor-relations/other/norwegian-air-shuttle-asa_presentation-to-bondholders_27-april-2020.pdf

[Meester proach]

Truth be told , it’s always been seasonal and I think it was this time last year they were asking who wants to go part time , leave of abscence, unpaid leave etc.
But that’s a soundbite for investors you have there and doesn’t relate directly to the reality for the crews

[uncle-traveling-matt]

Correct, this is about roster flexibility more than anything else. Not flexicrew contracts like easyJet had. It is a no go in the Nordics.

As for LGW SH and new Norwegian, operate Scandi to LGW and then connect to Norwegian LH, where there is a market to operate and a decent sized long-haul network. Why bother going LGW-ALC, let the vultures battle it out..

[Diavel]

The management of Norwegian is considering shutting down longhaul ops out of LGW. according to the news here in Scandinavia.
The companys shares are now very close to beeing worthless, trading at 0.7 NOK at the Oslo stock exchange.
The only chance this company has is if the norwegian government decides to re capitalize the company. Something they sofar have been reluctant to do, as it is considered to be the same as throwing money into a bottomless pit.

[SaulGoodman]

or are they awaiting bankruptcy so they can pick up whatever remains they want? Re-negotiating leases and so-on?

[Clop_Clop]

Diavel

Still the message before was they needed more funds at the end of this year after the earlier lifeline, so for govt it shouldnt come as a surprise they need more ..

Q3 report due 29/10 so maybe some more info then about the situation...

[aileron]

And the share price continues a slow burn to nothing.

[Thomas_Anderson]

I’m surprised they have lasted this long in the current climate.

[Kirks gusset]

https://simplywall.st/stocks/no/transportation/ob-nas/norwegian-air-shuttle-shares/news/is-norwegian-air-shuttle-obnas-using-too-much-debt/

The Norwegian Government needs to get off the fence.

[SmokeAndNoise]

Don't get me wrong, I have all the sympathy in the world for the crew who find themselves in this predicament by no fault of their own.

However.

Generally speaking, do you think governments should bail out financially irresponsible companies at the expense of more prudent ones? Maybe it's time for the market to adjust to a new reality and for some of the "unhealthy" over capacity to go away.

[Meester proach]

You’d have to define where you draw that line . Free market economy and all that . Risk often leads to reward .

Personally I’d rather see a couple of the companies that treat their crews like 1880s workhouse inhabitants disappear .

[SmokeAndNoise]

Risk leads to reward - or defeat. Otherwise it isn't risk. Question here is; whose defeat? The company that took the risk or someone else? There isn't enough chairs for everyone in the current market.

...so whilst I agree with your statement above, state aid to Norwegian would not achieve this goal. Proper regulation and governance would.

Personally I think the most sensible solution would be for Norwegian to make its own destiny. If required, the various States where Norwegian crew were paying their taxes, should pay salaries and recency training until such time the crews are able to find employment again. Hopefully with financially responsible, decent airlines...

[Meester proach]

Well maybe the government in Norway, seems a lot of these routes socially important and steps in cover those....and the aircraft lessors who have a bucket load of 78s idle, bail out the LH restart ?

There’s ways it could still flourish , if handled carefully

[Tartiflette Fan]

SmokeAndNoise

Why should they receive much more favourable treatment than waiters, hairdressers, salesmen, fitness-trainers ? I see no reason at all.

[Kirks gusset]

Norwegian Air has confirmed plans to slash its long-haul fleet of Boeing 787 aircraft which form the basis of the carrier’s base at London Gatwick.

Geir Karlsen, Norwegian Air chief financial officer, said: “We have too many long-haul aircraft. We are working to reduce the number.”

Norwegian chief financial officer Geir Karlsen says. ”When it comes to the 787s, that is a difficult task – at least in this market – to divest as many as 15, 16, 17 of them.”

The carrier operates 37 Dreamliners – 26 of which are leased. That adds a further complication to the situation as Norwegian’s lessors are now equity holders in the airline following the debt-for-equity restructuring in May which paved the way for the carrier’s survival.

“We are discussing already alternatives with these [lessors] where we have to find a solution to take down the capacity on long-haul,” says Karlsen. “It’s not going to be easy, it’s a very different market compared to the short-haul market with regards to liquidity and how easy it is to divest, but we need to find a solution.”
11 Airframes which are not leased, less 2 just sold:

https://simpleflying.com/norwegian-boeing-787-sale/

That only leaves 9 airframes to deal with as the "leased" ones are basically costing them nothing, other than maintenance, which is being accrued as a debt.

Looks like the USA routes from LGW are no longer starting Dec 9th, most/all now appear mid March 2021, which strangely is in line with the original rescue plan.

[Kirks gusset]

For those of us accused of not knowing the facts, or more than management, or making wild speculations!

https://www.routesonline.com/news/38/airlineroute/294568/norwegian-s21-trans-atlantic-operation-update-as-of-23oct20/

At least some good new for the LH LGW crews..

[srjumbo747]

Yes, I’ll go and book with them now and take a gamble with my money..... not!

[Heathrow09L]

That sounds positive, complete opposite on what was reported on PPJN

[fruitbat]

Norwegian Government have held a press conference where they seem to have ruled out investment.

https://apple.news/A8vQDJ9mfQ-mblPAnZcAD5w

[Kirks gusset]

Not the best news combined with the fall in revenues of 96% for October.

https://www.bloomberg.com/news/articles/2020-11-09/norwegian-air-future-uncertain-after-government-declines-new-aid

Looks like they may be supported on "Domestic" routes only, and if Wizz picks up the baton for international flights that takes pressure off the government.

The Oslo (https://www.independent.co.uk/topic/oslo) stock exchange said: “NAS [Norwegian Air (https://www.independent.co.uk/topic/norwegian-air) Shuttle] is currently evaluating the effects of the current situation with an aim to safeguard the interest of all stakeholders.”

This scenario is similar to the Olympic collapse where PSO routes were supported only.

Needs a golden egg and quickly

[Diavel]

True, no help from the norwegian government. This is fair enough, the company has no future post corona,without the neccessary muscles to fight with Ryanair, Wizz Air and Easy Jet.
No investor wishes to put money into this bottomless hole, all who have done so over the last few years have burnt their fingers.
It is better to likvidate the company and start over, Braathen is already working on starting a new airline in Norway.

[ManaAdaSystem]

15 of the remaining 21 aircraft in production grounded as of tomorrow. 1600 more staff on furlough.

[pippobaudo]

It is curious to see that from one side the Norway government scream against Wizz (working conditions, no-union allowed policy and so on....) and on the other side sentence to death Norwegian (always been way more ethical then Wizz, Ryanair and others) opening de facto the traffic and the country to those unethical reality.
It’s like you stand against racism then you kick out of your porch your cousin letting a redneck arian brotherhood trailer park style guy camp there 😒
May the government aim to some kind of negotiation?

[ManaAdaSystem]

Screaming doesn’t cost 5-6 billion NOK (the amount Norwegian asked for). The Chinese and Irish owners refuse to put a cent into their company, so why should the government?
They can’t refuse Wizz from flying in Norway, but the right to join a union is fundamental in Norway. Wizz going head on against this may not the smartest thing to do.

[lear999wa]

Wasn't Norwegian the company that based European pilots in Bangkok, with self employment agency contracts from Singapore. And operated said pilots between london and New York. Don't misunderstand me, I have no ax to grind with Norwegian, but in my eyes they don't hold any sort of moral high ground in relation to worker rights.

[pippobaudo]

I agree with you about the cost, still a contradictory behavior i guess. Especially when not supporting Norwegian’s operations will lead eventually in termination of many norwegian people. Playing devil’s advocate: did they withdraw also support to the others (SAS....)?
I don’t know as my knowledge on this particular thread is marginal.
Regarding Norwegian business plan....without RR and MAX issues you believe that with almost 200 aircraft wouldn’t been a good gig anyway?

[fruitbat]

Further reporting from Reuters...

https://uk.reuters.com/article/uk-norwegianair-results/norwegian-air-may-halt-operations-in-early-2021-without-more-cash-idUKKBN27Q0N2

[Kirks gusset]

This about sums it up:
https://www.ft.com/content/39d0c94d-c811-4b58-8393-dead7c396f7b

Any dreams of 787 flying are just that at the moment. Liquidation and buyout of the LH may be an option.

[Heathrow09L]

I see there is a fundraiser for Norwegian that pilots/staff are donating too for appreciation of how much Norwegian have given them, sadly I think it’s been poor leadership and abuse of pilots terms and conditions even in the stable period, I hope the money given or donated to this fundraiser doesn’t end up in the directors back pocket.

[Atlantic Explorer]

are you actually serious? Is this actually happening?

[dcoded]

Serious indeed!

https://www.facebook.com/donate/414870576184422/1478740135647991/

Just reach into your wallet and pour those Dollars into the endless hole.
This Captain who initiated the fundraiser must be oblivious to the fact why Norwegian got in to this predicament in the first case and also desperate (?) enough to pay to get his job back.
Or maybe I just don't get people these days?

[Heathrow09L]

Whoever is pouring money into that joke of a fund clearly have no self respect.

[Austro767]

I would be really careful there.

Maybe it is really a serious fund, honestly willing to support Norwegian, well 85.000.000 USD - wow - a bit far off reality. But okay.
But there is at least the possibility of a risk, that this guy just wants fill his pockets by taking advantage over the difficult situation the employees (or even colleagues) of Norwegian currently are.

[Twinstar2007]

Think it will take more than one person to save Norwegian, how can people who donated money in there be so naive?

[ATC Watcher]

it is all relative, according the FB funding stats, they try to get 85 millions EUR in the next 44 days . they got 82 replies and 2500 euros so far , so 30 eur per person on average , at this rate to get to their 85 M they would need to convince 3 million people :hmm:

[Twinstar2007]

where does it stop, assuming Norwegian survive this person will next suggest to the blind followers:-

Lets all pay our hotel rooms ourselves and taxis to and from the airport

as a bonus let’s also pay the fuel we uplift too.

[iome]

Getting worse

Norwegian Suspends Passenger Refunds & Reports 1B NOK Loss For The Third Quarter (https://loyaltylobby.com/2020/11/10/norwegian-suspends-passenger-refunds-reports-1b-nok-loss-for-the-third-quarter/)

[Austro767]

Well if they are really unable to pay obligations, it would require them to file for bankruptcy right now or at least within a short period of time.

[ATC Watcher]

The bit I do not quite understand is the role of Wizzair in that . I know Norway is not in the EU so why is a Hungarian airline now operating domestic flights in there ? Was that the reason the Norwegian government refused to further bail them out ?

[dcoded]

One can only speculate for the reason why they "refused", I would chose to use the word "declined" instead.
They probably got to see some of their books and saw that what ever the airline is saying is not deemed to be realistic.

Edit:

At this point in time it is a overstatement to say that Norwegian is critical to the Norwegian infrastructure. That argument is not valid.
They have SAS (who is being held under the arms by the Swedish and Danish state, and partly by subsidised routes in Norway)
Wideroe, and now also Wizz Air to keep the prices down. Oh, and a new start up with one of the Braathens family members.
Why would they dump money into Norwegian?

[Denti]

Norway is not in the EU, but a full member in the single market which does include aviation, therefore any EU airline could offer domestic flights if it wanted, same as Norwegian could do domestic flights in the EU. That is unlike switzerland which is not a full member of the EU aviation agreements.

[ATC Watcher]

decoded and Denti thanks or the explanations .Got it.
I just read elsewhere that Wideroe is the only European airline to fly at nearly the same capacity as in 2019 ( only minus 3% last week. ) Norwegian air shuttle is minus 65% and SAS at minus 78%, both in line with the vast majority of the rest of the majors.
So SAS has the capacity to take over the Norwegian shuttle routes , which they mostly shared with them anyway. The fares likely to go up, I agree , but let's get real , is that really a bad thing at the moment ?

[EIFFS]

Norwegian have dodged many a bullet in the past and whilst they were in a hole pre covid there was a path out that looked possible, few doubt that it was a good product and a good company to work for, I did 8 years, pay always on time, whether that be Conair, Arpi, NAS, OSM, we all knew cost control was a joke, day off money often £1500 a day (double day off payments) often for days on end.

Its only hope is the Norwegian government for whom it would be petty cash with a trillion £ sovereign wealth fund, but you'd have to ask why, cheaper to start from scratch SAS prices will go through the roof.

[uncle-traveling-matt]

dcoded

Who said the Norwegian politicians “declined”? The government did, but please do remember that Norway is presently ruled by a minority government, and last time I checked, Norway is still a democracy, and watching this evening news in Norway, this is far, far from over. The opposition are up in arms, and busy forming a coalition in order to save Norwegian. As far as I can gather, the majority of political parties are now willing to go in and save Norwegian. 2021 is also election year, and the Norwegian people love their local airline.
Things can quickly turn around for Norwegian : A vaccine should be available early 2021, the max is about to be recertified and the Boeing billion dollar compensation$$$ ?

[Paul737]

Best article I have read so far:

https://www.nettavisen.no/okonomi/pa-hoy-tid-a-sla-norwegian-konkurs/3424045532.html

[Paul737]

Another interesting article, especially the last part, talking about saving only the Norwegian part of the company:

https://www.nettavisen.no/okonomi/senterpartiet-oyner-hap-for-norwegian--frir-pa-nytt-til-ap-og-frp/3424045855.htmlThe Center Party has already tried to get the FRP and the Labor Party to join a joint crisis package without success, but now Arnstad is coming up with two concrete proposals that she will put forward in the Storting.

She asks party leaders to quickly clarify whether they want to support them:

- One is that we will ask the government to present the same type of support scheme that they have given to the rest of the business community, to the aviation industry. The second is that we believe it is necessary to have a new dialogue with Norwegian to save the Norwegian part of the company, ie the air routes in Norway and the Norwegian workplaces, Arnstad says to NTB.

[uncle-traveling-matt]

The Scandi part alone generated more than 20 billion kr in yearly revenue, so I dont see them confined to Norway only. Retrench to Scandi bases with a 100 frames, fortify and build from there. The rest will follow. The politicians are debating as we speak...

[Paul737]

And for that you need money from the Norwegian government who is only willing to save the Norwegian part of the company

[Joe le Taxi]

Selling 100kr notes for 50kr will generate plenty of revenue, but a viable business it does not make!

[FRogge]

To be even remotely able to ever pay off their debt, they need to be bigger than just a domestic airline in Norway. They need to be sizeable, not flying anything that wouldn't be profitable and be more lucky with everything they do (737MAX, RR engines etc)

[dcoded]

Retrench to Scandi bases with a 100 frames, fortify and build from there. The rest will follow. The politicians are debating as we speak...

Sounds like a good plan!
The problem is what to do in the mean time, before you get a sizeable market to operate 100 AC with a profit.
What do you suggest? Keep pouring in the money until some point in the future where they "will" make money?

[Kirks gusset]

Some rationale on how the Norwegian Gov thinks:

https://uk.reuters.com/article/norwegianair-government/norway-views-norwegian-air-debt-as-key-obstacle-to-aid-idUKL1N2HY0PX


Today the shares started a steady slide and with the furlough of the Gatwick staff it's looking increasingly like the only option will be to save the Norway operation and cut off the limbs, if this is done through liquidation or a rapid re-structure remains to be seen.

Norway’s Industry Minister, :
“It is a tough message to get. But we are answerable for the responsible use of public funds. Norwegian Air has a financial structure that makes it risky for us to go in with support. It was not defensible.”


https://seekingalpha.com/article/4388034-norwegian-air-shuttle-faces-bankruptcy?utm_source=feed_articles_investing_ideas_all&utm_medium=referral
Rather a comprehensive review but of course, just an opinion of a writer

[Vokes55]

dcoded

Doesn't that apply to just about any airline right now?

[Paul737]

https://www.linkedin.com/posts/hans-j%C3%B8rgen-eln%C3%A6s-80505536_norwegian-is-on-the-top-list-for-media-in-activity-6733506190468247552-uspZ

It looks like help from the Government of Norway is on its way to ¿save the norwegian/scandinavian part of the company?

Under what conditions (restructuring?) will this help come?

[Kirks gusset]

With the very complex structure of the company it may be difficult to divide it up, kill off one part and save another. The clue is in the wording
This weekend political parties in the Parliament are negotiating on a compensation aid package to the airlines in Norway.
, the politicians have already objected to funding operations outside of Norway and appear to only want to support "internal operations".
The best to hope for now is to keep the "brand" alive by liquidating everything outside of Norway, OK so this shafts the shareholders that showed good will (no choice) in converting debts to shares, on the other hand, continuing to operate whilst insolvent could bring heavy penalties and liabilities that the Norwegian element will certainly want to avoid.( already hinted at by the CEO) , It may be possible to get shareholder agreement for their interests to be retained in a state supported Norway only operation, but this would mean them agreeing to effectively walk away with no functioning elements of the "old structure", of course all the 787 and surplus 737 would be permanently grounded in the "non trading" part of the new structure. The debts are so huge that even state support would not keep the whole operation alive and would require such large sums that other Norway based airlines could question.

[dcoded]

Vokes55

Indeed it does!
But not all airlines came in to this crisis with +8bn USD in debts.

[uncle-traveling-matt]

From the filed courtpapers in the case versus Boeing, Norwegian are claiming compensation due to the grounding of the max and resulting losses of over 1 billion dollars. Now if Norwegian
can get a bit of help from Norway, that will go a long way in getting Boeing to eventually cough up the compensation owed, continue the financial restructuring so brilliantly handled by the CFO until covid destroyed the market, and bring the company back to good health after the crisis.
Will be interesting to see how the leasing companies react, will they pitch in with their own money? Or walk away?
Much of their debt are hooked up to the 787 fleet. Due to the new IFRS rules, FUTURE leasing costs are a big part of this, so is maintenance and other capital costs. If they manage to offload the leased dreamliners (around half of their 787 fleet)back to their owners(the leasing companies) over half of their debt would be gone over night. This would again mean attracting investments and liquidity of which there are plenty available in the current capital markets.

[srjumbo747]

Why are they going after Boeing? Surely RR?

[737Driv3r]

There is already a contract in place for maintenance for 90 738s at least so I would say the spanish bases will survive or worst case scenario everyone transferred up to scandi and flying from there. Still Spanish government is also helping with the ERTEs so I believe Spain will survive along with scandi bases.

[Paul737]

And all this because there is a contract in place for maintenance for 90 738s

Wishful and naive thinking only because you have a Spanish base. Pretty sure Norway is going to give money to save Spanish bases!!! 😂

And spanish based crew transferred to scandi ignoring the MSL right?

As soon as ERTEs FM are over Spanish bases are done

[Kirks gusset]

The major issue with support Norwegian is transparency. It has from the start had a complex and duplicitous business operating practice, a former CEO that "cannot remember "paying 500K in personal bonus just before the shares collapsed and the whole thing is like an Onion, the more you peel, the more you cry!
Look at their home-grown handling company in UK "RED HANDLING" company records showed they paid £637,546 in staff costs in 2018/19.. for 9 admin staff, no mention of other employees, in October 2020 the Norwegians appointed their own Directors, some of which are also Directors at NAS. They paid no UK tax as a company yet want the UK to support the furlough. One can't blame the Norwegian government for being cautious as this is clearly a management that works overtime to line it's own pockets.
The real shame is the loyal and professional crews seem oblivious and keep following the misguided actions of the company and will be left high and dry.
The Boeing maintenance contracts are handled under the "gold package" for 787s, and as these leases are stalled, so are the contracts, with essential maintenance charges being added as accrued debts ( agreed by Board and Shareholders in bail out)
Lufthansa Technik will only carry out maintenance on the 738s while they get paid.
It would be nice if the Spanish bases survived , cant see these crews being used in scan land though, doesn't make sense with the spare crews and capacity there already

[rotorcloud]

My guess is that there will be a massive debt cut that the Norwegian government will ask for as a requirement to take over the majority of the company. I am sure it will be taken from the stock market and major restructuring will happen. When they are lucky they can get rid of at least half of the debts putting them into a good position for the future. While all major airlines are still negotiating with their staff, burning cash everyday and loosing their business clients on long term Norwegian can be the big winner of the crisis. Not to forget the court case against Boeing which will generate cash as well.

[dirk85]

It’s not how the real world works. You cannot just delete the debt and continue like nothing happened.
You decide to delete the debt but elect to pocket the cash from Boeing? Which planet do you come from?
A lot of you are delusional, sorry to say.

[srjumbo747]

Simple question. Should I book tickets with them for my flight to Orlando next year?

[737Driv3r]

Yes. With the government hoping in like most other governments around the world doing the same they will be fine.

[rotorcloud]

The kingdom of norway will make an offer to all creditors represented by a share price. Then it is basically on them to accept and secure at least some of their credits. if they deny they loose everything. Cede claims. And i live on planet earth ...

[dirk85]

Creditors were burnt once, there is only so many times you can trick them.
They are better off selling the pieces and get it over with.

[uncle-traveling-matt]

There are no tricks involved. Its about sound, financial judgement. When the creditors were lined up against the wall in the spring, they lost a lot of money accepting the debt to share conversion. Why? Because they were nice people? No, because the alternative presented an outcome with even greater losses. Given the current circumstances, a pandemic, they are faced with the same dilemma once again. Now, I think Norwegian will walk away from this pandemic, smaller, slimmer yes, but more agile and with a lot less debt..

[Wickerbill]

I am not sure they will walk away at all.

[737Driv3r]

At this moment the package can already be negociated as the parlament gathered in the weekend to decide an aviation aid package.

So maybe there's still a life after this covid black chapter for most🤞

[uncle-traveling-matt]

Wickerbill

Enlightening.
Getting rid of the debt is paramount. In its own absurd way, covid will see to that.

[Speedbrakes Up]

Its encouraging to see the Norwegian government in Parliament working on a rescue package.

But that rescue package, what will it cover, what will be clauses imposed by the government, and above all can the money that is given to Norwegian by the government go beyond the boarders, to the hard working employees in Spain, Italy, France and the UK????

Or will Norwegian retreat to its original core area of flying, get rid of debt, and build its self back up over the next few years???

I just hope the hard working employees of Norwegian are given some guidance and direction as to what the future holds, and soon. Its a horrible time.

[Plastic787]

Norwegian might well be saved for intra Norwegian services and some international ops ex Norway but anyone who seriously believes that they’ll be flying point to point LH services out of the likes of LGW, CDG etc again is, quite frankly, delusional. The business model was a proven money pit and failure before Covid, that much was clear. Covid merely accelerated what was going to happen anyway.

[Icanseeclearly]

It’s not just about the here and now, it’s also about future bookings, ask yourself, as a passenger would you book a shorthaul flight from LGW with Norwegian at the moment? I think the answer would be no - I would use EasyJet. The same goes for longhaul, Norwegian or BA/ Virgin? It is as much about consumer confidence as it is about state subsidies and I’m just not sure there is any confidence in Norwegian within the flying public outside Norway - I hope I’m wrong but I think it will be a shadow of its former self if it continues to exist (and that’s before the legal challengers of having a state subsidised airline being based in a different country Directly competing with that countries airlines - can’t imagine EasyJet would accept it without a fight).

[Icanseeclearly]

If NUK is a British company as you say then I can’t see the Norwegian taxpayers being too happy about bailing them out, it needs a different strategy.

As for the JFK being full in the past, that was the past it’s a very different industry at the moment and will be for the foreseeable future.

i hope Norwegian survive as it gives healthy competition but I’m not confident.

[srjumbo747]

Come on people. They were and are a money shifting business which took/takes advantage of every loophole going. Getting cheap labour to passenger in from Thailand to operate Europe to the US then passenger back again.
Crew commuting in uniform not paying any taxes. Why should they be bailed out?

[vikingivesterled]

The Norwegian government have found out it has options and there will be other airlines than Norwegian around post CoVid19. The airline rescue package they are discussing is just about some 0 departure/passenger tax and whether it should be for the full year or just for part of it that the party Venstre (leftist turned environmental) is arguing for since it won't have much effect when few people are flying. Plus some extra purchases of seat support, basically an extension of what most countries do to keep needed but uneconomical routes going. This was the equvalent of 100 mill Euro before and might be a bit higher next year. None of which will do much for an airline that is hardly flying, like Norwegian. The politial parties are more busy with saving the airports, including the many Norwegian don't fly to.

The cost saving initiative was made for an airline world that was rosy red. Not taking into account the real world that is full of financial ups and downs. And the main plan of selling extras to passengers continued to be the plan after the passengers disappeared due to CoVid19. No new plan was made on how to generate more income from the opportunities that was around utilizing the assets they had including the freight friendly 787 (as compared to the 737). They had a chance to do something when they where allowed borrowing the extra 3 billion nkr last summer, but instead they decided to hibernate. In the process disapointing the many leasing company majority shareholders by not returning maximum on the pay lease only when using deals.

[FullWings]

Much as I would like the people in NAS to all keep their jobs, the business model wasn’t working too well prior to Covid making an appearance. Selling things below cost then trying to make it work by doing more of the same isn’t a great strategy. If we magically returned tomorrow to 2019 traffic levels, they would still be in trouble, probably more so as their competitors have become much leaner during the pandemic.

Low-cost LH is a bit of a misnomer. Where are there significant savings to be made over other carriers? Everyone pays much the same for fuel, overflights, landing and parking fees. Most relevantly, utilisation (where LCCs generally score) is no better because of slots, curfews and saving 10mins on the turnaround makes no difference on 10hr sectors. Crew have to be slipped, just the same as the other airlines. Network, alliances, product, punctuality, etc. are more important. If you charge less for a LH flight than everyone else, it’s almost certain that you’ll be making less money, or none at all.

[oldchina]

FullWings

Thank you for writing clearly.
I'm fed up with the "terminology drift" which confuses low fares with Low Cost.
Having the former doesn't give you the latter, as many legacy carriers have proved.

[FullWings]

My airline has been doing this for quite a while. We have a couple of aircraft fully configured with seats removed but also can use seats to carry cargo with nets over the whole lot. It’s interesting how much freight you can carry on a “passenger” aeroplane but if you think of the load an individual seat is stressed for, it shouldn’t come as much of a surprise, really.

[Kirks gusset]

To be fair to NAS most of the other operators already had cargo operations, Dangerous goods approval and established cargo agent contracts, so simply added capacity using either QC or internal protection. NAS would have to spend money to get this approval and any permanent changes to 738 would work out about 4 Million per unit. The 787 would be more costly. Analysts state cargo is forecast to grow until 2025 when PAX numbers will start to return to pre-covid levels, but its all a guessing game. The miracle virus jab may help but again its going to be 6/9 months before that is widely available meaning next summer will also be badly impacted with lack of forward bookings.
There is no competition in US routes at the moment as no one is basically travelling.

Not new news but it looks like the ball is rolling in Norway:

https://www.ch-aviation.com/portal/news/97372

Looks like the Spanish Government is also getting the jitters!

https://www.aerotime.aero/elzbietavisnevskyte/26417-despite-governmental-aid-air-europa-to-follow-norwegian-s-fate

[EIFFS]

Other than internal flying within the Nordic area its difficult to see a future for Norwegian on anything like the same scale, investors, creditors alike have been wiped out.

They had many years of tailwinds and grew rapidly, but faced with the ultimate headwind of covid their tanks are empty and coasting on fumes, a real shame for all involved.

[ManaAdaSystem]

AerCap says they will lease out Norewegians 787 aircraft to other operators. 2 are already gone. Makes sense, Norwegian has a no fly/no pay clause for their leased aircraft.
That means up to 24 787s will be gone, leaving 11 in the 787 fleet. Not sure, but my guess this will be the oldest 787s they have.
AerCap is one of the worlds biggest aircraft leasing companies and currently own 15% of Norwegian.

[Kirks gusset]

Its old news, but gives a clear indication of where things are heading:Aercap's chief risk officer, Anton Joiner, has resigned from his position as a member of the board of Norwegian Air Shuttle.

The airline disclosed the resignation in a regulatory filing, but did not give a reason for his departure. Aercap declined to comment.
Joiner joined the airline’s governance team earlier this year after Aercap became Norwegian’s largest shareholder as part of its debt-for-equity conversion programme.
Aercap chief executive officer Aengus Kelly was also named as a new member of the airline’s nomination committee for two years following the decision of Finn Bergh and Bjorn Kise to step down.
During the lessor’s third quarter analyst call, Kelly said that Aercap was seeking to reduce its exposure to Norwegian.
The Dublin-based lessor has agreed new lease contracts for two Boeing 787s currently placed with Norwegian and was in the process of remarketing a third, he disclosed.

The end game now is all about reducing risk and exposure to counter claims.

[Joe le Taxi]

And equally, I really can't see why the Norwegian government would perpetuate or get involved with the operation, when it is a legal and financial morass of negative net value, and the government can much more easily assign the socially important domestic routes to a properly Norwegian (and reasonably healthy) domestic carrier.

[vikingivesterled]

What carrier would that be. SAS is a Swedish/Danish owned airline. Norway only have 1 other carrier of any size and Wideroe are a regional plane size operator with mostly Dash and a couple of E jets. Nothing to serve routes like Oslo-Trondheim that normally is the size of sample Dublin-London. Which is why Wizz is coming in full steam.

[dirk85]

If there is a market for it and money to be made rest assured that other operators will step in, see Ryanair, easyJet, etc

[vikingivesterled]

Tried to get Ryanair interested in flying to Trondheim since 97. They shy away from the Norwegian market because all the main airports are owned by the government and they can't get a deal, which is what they feel is essential for their model..They have done international traffic to a couple of alternative privately owned Oslo airports, the other cities don't have alternatives, but they are far away with more inconvenient ground links so are not as popular among Norwegians and therefore no god for intra Norwegian flights. As for easyJet even though their offering is more comparable to Norwegian they where never that active in Norway, probably seeing the total population as to small forgetting its also about wealth, distances and poor alternatives. There might be no ocean between Oslo and Trondheim but the alternative to a 45 min flight is/was a 7 hour drive at 60-80 km/hr on a lot of very boring single lane highway. Same for Oslo-Bergen, and Oslo-Tromsø is a multi day journey.
This was the way Norwegian grew so fast from nothing. They made money on these and other scandinavian trunk routes that they then spent on an ambitious expansion, unfortunately without creating a bit of a financial safety buffer in the process.

[CW247]

In other news, LH ops from LGW is resuming from March...
:}
https://ukaviation.news/norwegian-plans-to-restart-uk-transatlantic-flights-in-march-2021/

[Kirks gusset]

That's old news I'm sorry to say, announced some months ago and probably just picked up by this journalist. They applied for the traffic routings as reported a few posts back before the crunch came, perhaps they anticipate generating enough cash from the 6 internal routes and the Boeing compensation to start these routes again.

https://www.routesonline.com/news/38/airlineroute/294568/norwegian-s21-trans-atlantic-operation-update-as-of-23oct20/

[ManaAdaSystem]

AreCap has sold 156 million Norwegian shares and now own less than 10% (9%) of the company.

[Kirks gusset]

Not surprising as Norwegian have just converted another $2m in debt to shares, the dilution is so much now that the forecast is them to be worth zero by next year, so selling while you can at least get something back is the best option and Aercap posted a loss of 850M in the last QTR with depleted cash reserves. Its a domino effecthttps://www.flightglobal.com/strategy/norwegian-debt-equity-swap-follows-90-fall-in-october-traffic/140983.article

[Joe le Taxi]

But it reaches a precipice when the secured stake/debt holders can extract more value from the liquidation assets than they will ever get from D4E swaps, or than risked returns from letting the company continuing to trade. As equity value is almost zero, I'm surprised that point hasn't already happened.

[ara01jbb]

Trading suspended on the Oslo Stock Exchange. At the stop of trading, a share in Norwegian cost NOK0.47.

[Icanseeclearly]

Would anyone buy a ticket with Norwegian at the moment?

Thats the crux of the problem, without forward bookings the relaunching of Longhaul out of LGW looks doubtful, indeed any flying out with Norway itself appears problematic.

i hope I’m wrong but it’s not looking great.

[Speedbrakes Up]

LGW long haul start up in March was the original plan.
It then came forward to December, now back to March.

I would not book, but that is just me.

Just cannot see how they can restart the equivalent of an entire airline again (30 odd 787s), with nobody current on type, and the aircraft stored.
It will be such a huge cost to bring back the fleet.

[fruitbat]

Latest news..

https://www.cityam.com/norwegian-air-enters-restructuring-proceedings-in-bid-to-survive/

[uncle-traveling-matt]

https://media.uk.norwegian.com/pressreleases/norwegian-initiates-a-reorganisation-plan-with-its-daughter-companies-norwegian-air-international-and-arctic-aviation-assets-seeking-protection-dot-dot-dot-3052095
“Our intent is clear. We will emerge from this process as a more financially secure and competitive airline, with a new financial structure, a rightsized fleet and improved customer offering,” said Schram.

[vikingivesterled]

Norwegian is seeking examinership / reorganisation in Ireland, where the company that owns their plane assets is registered.
Examinership protection requested to include NAS (Norwegian Air Shuttle (the Norway registered mothership) as a related part.
According to stock exchange release: https://newsweb.oslobors.no/message/518391

[Kirks gusset]

For those in the dark:Examinership is Irelands corporate rescue process which gives an insolvent Company (or group of Companies) protection from its creditors for a period of up to 100 days. The protection afforded under examinership legislation is to facilitate a Company (through a Court appointed Examiner) secure investment and put a legally binding scheme of arrangement in place for the settlement of debts with its creditors.

Once a Company has been placed in examinership by the Court, this prevents any enforcement through either the appointment of a liquidator or a non- statutory receiver. A Company can utilise the examinership legislation to overturn the appointment of a Receiver but there is a very narrow window of time to do so.

When a Company successfully exits the examinership process, the Company continues trading with the business and assets intact, jobs saved but without the majority (or in some cases any) of the liabilities accumulated prior to entering the examinership.

The opportunity which examinership affords for Companies to restructure is invaluable. Getting early advice prior to and guidance throughout the process is critical to a successful outcome.


Effectively means the creditors (shareholders) have to agree to wipe out the debts. As always the devil is in the detail "INSOLVENT COMPANY" I guess this is what Schram was referring to when he said "protect the stakeholders and investors!"
Examinership Process

Obtaining a practical understanding and clear direction on each of the three distinct stages of the process; entry, during and exit is paramount to a successful outcome;

Entry

• Company must be insolvent

• Company must be suitable for the process meaning that it should have a reasonably prospect of survival, sufficient cash flow for the 100 day protection period and ideally have the support of stakeholders To allow a Company successfully exit examinership, the investment pledged must be received by the Company. Sufficient investment monies will be required to facilitate the payment of

the dividends outlined in the scheme of arrangement, any immediate working capital required and the examinership costs.



Still requires a substantial investment to exit the process

[dirk85]

It is a brilliant way to do business. Grow like there is no tomorrow with an unprofitable business model, lose a fortune, accumulate as much debt as you can, restructure your debt once by asking your creditors to become shareholder, lose 99% of your company value in a year then what, 6 months after ask to restructure the debt again. You could not make this stuff up.
And most of this happened in a time where most of your competitors were making billions of profits.

[Kirks gusset]

Lars-Daniel Westby, an analyst at SpareBank 1 Markets in Norway, who last week told the Financial Times Norwegian was likely to file for bankruptcy in Ireland or the US, has said it could split into a profitable short-haul European operation and a lossmaking long-haul business.

Always on the cards,

[Icanseeclearly]

I am no businessman but why would you bother with a loss making long haul business? Why not just sit on the profitable shorthaul operation?

[Kirks gusset]

They won't! the loss making LH will be culled and the SH will be offered to investors. Of course, the LH leasing companies that are also shareholders may be offered pro rata shares in any revamped SH venture just to stop them voting against the proposals put to creditors and the plug being pulled. This process will only work if the majority of creditors accept the plans and the court are sure that the company can survive.. any doubt is no doubt as they say in the sim!

[ManaAdaSystem]

First deadline December 6.
By this date they (Ireland) must decide if keeping the company alive is a better option than selling off whatever values it has.
The way this company is set up does not make this easy. Only the Irish parts are in «Chapter 11», the Norwegian part of Norwegian is protected as an «associated» company.
If they manage to pull this off, they have 150 days to get the company on it’s feet.
That takes money. The Irish/Chinese owners don’t want to inject any money, something the NO government is well aware of.
On top of that, the government is not very happy with the way Norwegian is set up with various sub companies in other countries.

[NutLoose]

more

https://edition.cnn.com/2020/11/18/business/norwegian-air-bankruptcy-protection/index.html

[737Driv3r]

It's incredible how some "know" who wants to put money , who doesn't , if the Irish if the Chinese if Santa, what's going to happen and by what order. Basically know more than the investors themselfs 🤣

This thread is going for years...already bankrupted and closed shop at least 5 times and somehow it's still up and running...

[ManaAdaSystem]

737Driv3r;

Santa is not a shareholder, but China (via 6 or 7 sub-companies) and AerCap (Ireland) + several other Irish companies are. Between them they own a big chunk of Norwegian. Please tell us how much money they have injected into the company?
The answer is 0.
They don’t even want to own the company, but was forced to by the debt for shares stunt Norwegian pulled.

[uncle-traveling-matt]

The special thing now is that many of the largest owners are both creditors and shareholders. They are guaranteed to vote yes to restructuring if they get paid well enough for their debt in the form of shares in new Norwegian, and sell the old almost worthless diluted shares.

[Joe le Taxi]

Uncle, you said it yourself - the shares are almost worthless, so why would they convert secured debt into more worthless shares. The level of security on debt varies, but the (Norwegian) governments tend to put themselves at the front of the queue for break up assets - it wouldn't be much, but at a guess, I'd say it's more than the equity would be worth. Anyway, first the administration has to be approved by the judge, and that's far from certain.

[Kirks gusset]

In reality the "old structure" dies and the value of the shares dies with it, so selling any old shares is not possible, who's going to buy shares in a structure that no longer exists? The shares are already under observation for OSLO trading and forecast is worth zero, so forget raising money by selling old shares.

The existing "creditors" may also be share holders, however their historical debt was converted to shares in May and it could be seen the slate was wiped clean with that transaction, the "new debt" has accrued since May and is on-going with contractual obligations, wages, overheads etc, and it is this "new debt" that balanced with the available income and cash reserves puts the existing company in insolvency.

The examinership process is solely designed to protect the company from its creditors for the period 100 days, during which a feasible and sustainable business plan must be made, or the company is declared bankrupt.

Of course the shareholders will vote for restructuring, they have little choice, but the hat they wear as "creditors", means that for the process to be approved by the court with a successful exit they will get more in real terms than if the company is dissolved and the assets sold.

One must remember that the primary role of the Examinership is to protect employees.
Examinership, it’s Ireland’s rescue framework for, you know, otherwise viable companies that find themselves in difficulty, but they have good, good prospects for survival if they can be restructured.

In fact, the test actually is only a reasonable prospect of survival and subject to certain conditions that if they can restructure themselves, they can still be there for the for the benefit, particularly of the employees, which is why the legislation was introduced in 1990. And secondly, then for the benefit of the community as a whole, that, you know, that the enlightened approach is that businesses should have a second chance, should be given a second chance if they are if they can be viable, if they’re restructured. So that’s what that’s what Examinership is.


For this process to be approved REAL INVESTMENT must be forthcoming, not vacuous promises and more importantly, the "investment must be received" , this is where they will struggle unless the shareholders are prepared to actually put in cash. Trading revenues from sales is not investment.

Cityjet creditors agreed to write off 75% of their debts and the company received sufficient external investment cash to continue.

A slimmed down Norwegian with the new management may well be an attractive investment, lets see who comes out of the woodwork on this. Pity Braathen has hovered up some potential sources

[Maxfli]

From The Irish Times:

https://www.irishtimes.com/business/transport-and-tourism/liquidating-norwegian-air-shuttle-would-leave-6bn-deficit-1.4415098

The outlook is not encouraging.

[Locker10a]

“the report says the companies have a reasonable prospect of survival if they take certain steps proposed by management, including renegotiating lease payments on their aircraft, deferring some loan repayments, cutting their fleet and cancelling future aircraft orders.”

Seems there is hope

[uncle-traveling-matt]

liquidating Norwegian would see the creditors loose everything :
”An independent accountant’s report submitted to the court shows that winding up Norwegian Air (https://www.irishtimes.com/topics/topics-7.1213540?article=true&tag_company=Norwegian+Air)Shuttle would wipe out most of its assets, leaving a $7.1 billion (€5.98 billion) shortfall, eliminating any chance of creditors collecting on the debts due to them”

[srjumbo747]

They were losing money before the pandemic. Their major competitors are now leaner and ready to make serious money.
Seriously, if a family wanted to spend money next year on a trip to the USA do we think it’s wise to spend money on them or one or their competitors?
It’s a no brainier.
And I feel for the staff who have been badly treated but many people have been laid off in other companies too.
They bring nothing to the pilot profession apart from a step downwards and because of that, in my opinion, they do not deserve to succeed.

[Kirks gusset]

The lease payments were changed to PBH in the May bail out, not sure what's left to be negotiated, other than fly for fee.

Deferring loan payments, guess that's up to the Banks and the government of Norway, but the loan payments have already been deferred once from Dec to March.

Cancelling future orders, already done, but at legal stages with Boeing regarding payback of prepayments and compensation, that case likely to last a year.

The good thing is that the Court have identified the liquidation would just leave huge debt, nothing for creditors so anything better than that is a bonus and helps the process.

Key to this is external investment, no investment, no happy ending

[SSDK]

"They bring nothing to the pilot profession apart from a step downwards and because of that, in my opinion, they do not deserve to succeed."

I'm not sure I follow your sentiment... I used to fly for Norwegian and I only left to go home (I was made redundant 2 months after I left in my new airline). I saw nothing but professional and dedicated people at Norwegian, and the pay was absolutely acceptable. Not perfect, but at the upper scale for low cost at the very least. Only long days and too many nightstops out of LGW was really a "minus" as I recall.

If Norwegian folds I suspect we will see an even faster decline in T&C's across the board. The next major low-cost company might not be as union friendly as Norwegian.

Not sure how this will play out, but I hope we will see a better, leaner Norweigan at the other end of Covid-19.

[srjumbo747]

I made no reference to the pilots. I know a considerable amount of them and agree with you.

[hec7or]

If Norwegian folds I suspect we will see an even faster decline in T&C's across the board. The next major low-cost company might not be as union friendly as Norwegian

This will assuage the bean counters

[Avenger]

Any idea what this may mean for the LGW SH skippers that were made redundant and looking at CRZ CPT on 787? Is this a ploy to suggest they are protecting jobs?

[Kirks gusset]

It was assumed that all the creditors would agree to the process, but getting a High Court Judgment against the company in which you have an interest is a pretty strong statement that the Courts will not ignore

"The judge awarded Norwegian temporary protection until December 7, by which time creditors of Norwegian’s Irish subsidiaries can lodge their opposition."

https://www.irishtimes.com/business/transport-and-tourism/norwegian-air-s-irish-subsidiaries-subject-to-legal-action-1.4416173

The problem now is that having the default judgements made by the UK Court, unless the examinership protection continues the winding up is almost certain unless the previous debts are paid off in full..

[Locker10a]

https://www.irishtimes.com/business/transport-and-tourism/boeing-seeks-dismissal-of-norwegian-air-s-1bn-lawsuit-over-max-aircraft-1.4417147

”Boeing is bidding to stall troubled airline Norwegian Air’s $1 billion lawsuit against the US aircraft manufacturer while the Scandinavian carrier lines up a rescue attempt in the Irish courts”

[ManaAdaSystem]

BOC Aviation Limited (China) dumps 39 million Norwegian shares and now owns just under 5% of the company.

[Kirks gusset]

BOC have been gradually selling shares but still hold over 182 Million shares in NAS and the group companies, although the values have plummeted since the bail out in May.
Selling these 39 Million shares would have generated $18M in May, now just $2M.

On a positive side, it does free up more shares for investment, although it looks like a fire sale by the leasing companies is taking place before the next stage of the examinership, which if rejected renders the shares worthless.

[Diavel]

Even with the debt for shares program earlier this year, NAS still has a debt of around 4 billion Euros. No new investor will bei terested in throwing more money into this bottomless pitt.
The only sensible thing to do is liquidate this mismanaged company, eventhough it will hurt the creditors.
Norwegian will never be a serious contender in the aviation market again. Post Corona they will not have the muscle to compete with Ryanair, Wizz air and Easy Jet. Unless ” somebody” is stupid enough to inject at least 1 billion EUR into this doomed company.

[ManaAdaSystem]

AerCap dumped another 48 million shares today.

[Diavel]

Yeah, saw that somewhere. Wonder who is buying this next to worthless share.

[Kirks gusset]

For the financial gurus:

It is quite clear that only 20% of the income came from the home market, therefore, by definition, if the new structure allows just for Norway based operations, 80% of the revenue would be lost.. having said that, the biggest growth in revenue 29% came from "other" which translates to selling aircraft, fuel hedging, selling fixed assets, exchange transactions etc.. if you like "wooden dollars" as these transactions are really "one off".
Interestingly, USA and Spain were the second biggest source of pax revenues, again, with the demise of LH ops, thats another 19% lost.
A sensible model would appear to be a much reduced fleet, just SH and Norway and Spain operations.
In terms of who's buying shares, there are no apparent large single investors, and with the price so low perhaps many are taking a punt with over 66% of the shares up for grabs.

Sales per Business
2018 2019 Delta NOK (in Million) % NOK (in Million) % Passenger Transport 32,560 82.3% 35,216 82.6% +8.16% Ancillary 6,267 15.8% 6,652 15.6% +6.14% Other 695.60 1.8% 899.00 2.1% +29.24% Freight 743.30 1.9% 755.10 1.8% +1.59%

Sales per region
2019 NOK (in Million) % Norway 8,644 20.3% United States 8,313 19.5% Spain 6,005 14.1% Other 4,585 10.8% United Kingdom 4,458 10.5% Sweden 3,430 8% Denmark 2,977 7% France 1,949 4.6% Italy 1,214 2.8% Finland 1,206 2.8

[Clop_Clop]

In terms of who's buying shares, there are no apparent large single investors, and with the price so low perhaps many are taking a punt with over 66% of the shares up for grabs.


As a long term value builder unless someone knows something about the future structure of the company they are probably not the greatest case out there getting involved in. But until the fate is known in detail the share have some good characteristics for day traders..... Large intraday swings in %, decent volume and spreads ( still ) so they can dip their feet and get in and out of the pond relatively easy. Also probably a close to zero value of them some time in the future…

[uncle-traveling-matt]

Shares are worthless until new Norwegian emerges. The interesting part right now is, who is buying the bonds..

[Kirks gusset]

Looks like Wizz are setting out their stall.

https://www.marketscreener.com/quote/stock/NORWEGIAN-AIR-SHUTTLE-ASA-1413204/news/Wizz-Air-seeks-bigger-share-of-Norwegian-skies-takes-on-Norwegian-SAS-31911473/

[Maxfli]

Another EGM and Rights Issue on the way, 17th December, with a 100:1 reverse share split.

The Board of Directors of Norwegian Air Shuttle ASA ("Norwegian" or the "Company") is today proposing a plan and set of actions that secures current and future travelers and ultimately will potentially enable the company to exit its current Irish Examinership process through implementations that aim to right-size the company operations at a level of proven profitability. This will mainly be done by reducing the fleet of aircraft, and therethrough reconstruct a balance sheet that is focused and strong enough to attract new investors and stakeholders including potentially Norwegian government support. The debt to equity conversion will not only include parts or whole of aircraft financing or leasing liabilities, vendor/supplier liabilities, bond obligations but potentially also include arrangements that requires Norwegian only to pay for aircraft when in use until 2022 (so called «PBH» Power by the hour). An equity issue up to NOK 4 billion in the form of common stock and/or hybrid equity instruments to current, new shareholders and other potential stakeholders is viewed as the final step in this process. It is the intention that should all these actions be successful, current shareholders will together with the current debtors become meaningful minority shareholders of the company. An extraordinary general meeting will be held 17 December 2020.

https://live.euronext.com/en/node/3471073


Reduction of the share capital

The share capital is reduced by NOK 3,696,878,720.70 from NOK 3,700,579,300 to NOK 3,700,579.30 by reducing the nominal value of each share. The reduction amount shall be transferred to funds and constitute other paid-up up equity. § 3 of the articles of association shall be amended to state the company's share capital and number of shares following the reduction in the share capital. [Comment: If the share capital is increased prior to the general meeting, the reduction amount will be amended so that it is equal to 99.9 % of the share capital at the date of the general meeting.
https://www.norwegian.com/globalassets/ip/documents/about-us/company/investor-relations/annual-general-meeting/20201203---egm-notice---norwegian-air-shuttle-asa.pdf

[Kirks gusset]

Almost identical proposal to the last "debt for equity swap"
Aercap, BOC, and Other major creditors will not be interested in having equity in a company they have just dumped shares in at a huge loss. "State Aid" would only support the home market section of the company, and the PBH will not attract the leasing companies with 80% of the fleet permanently grounded, this PBH arrangement is already in place, so no change "Meaningful shareholders" in a slimmed down company through share reduction is smoke and mirrors, what they need is solid cash investment. A 99% reduction in shares is basically asking companies to write off their debts...Again, There is a limit to how long creditors can show good will, the sizeable creditors have already obtained High Court Judgements in the Uk and to think they are not serious about their intentions is once again burying the head in the sand. Basically, there is no market confidence in this company anymore. Let's see if anyone comes forward with investment before the 7th..
One must remember, the primary point of examinership is to protect jobs in a potentially viable company, but with possible job losses on this scale it is questionable "protection" and may appear to simply be an asset protection plan.

"Right sizing" is vacuous management bull, In April the board were told "right size" was a projection of 30% fleet reduction to 110/120 A/C , that proved impossible to support and the operation "right size" dwindled to 6 Aircraft all ex Norway. As demand stands now, the "right-size" allowing for home market and some international to Spain would not be far off the 21 A/C, all short haul they targeted to operate later part of this summer, even that number is contingent on major investment.

[calypso]

Your statement assumes that
A. if they pull the plug the creditors can recoup their debt
B. If the leasing companies pull the aircraft they can find another airline to take them

Both assumptions are no correct in my view. The creditors calculation is wether it is better to bankrupt the company and get 10 cents on the dollar or keep it going and get 50 cents on the dollar but in shares. Each creditor will have their own view on that but there are arguments both ways. In any case the Irish court can force creditors to take a hair cut against their will. That is one of the main differences between a voluntary re-structuring and the Examinership process.

The lease companies don't want the aircraft back (yet). Better to be paid in shares and have the aircraft maintained and stored at Norwegian´s expense than being paid nothing and having to store them and maintain them yourself. Most leasing companies are not really geared up to look after the physical assets.

The 99% reduction is just a technical resizing that does not change the total value of shares held. It is done to avoid having shares trade at very low values.

Whatever the financial wizardry fresh new cash will need to be found in order to survive. Wether that happens depends on how much debt is written off, the soundness of the business plan against the evolution of the economy (ie Covid) and how much fresh equity is given for the investment. We know there is money in flying people on holiday from Scandi to the Med in a 737 so that part is probably worth someone investing. Is there money in flying to NY for 150 bucks in a 787? with a despatch reliability of 50%? how long will it take for that reliability to be 99%? will someone invest in that? how far is the break even point? who knows

[ManaAdaSystem]

Debt for shares...
How far do they think they can pull this stunt?
They have stopped refunding tickets simply because they can’t afford to pay their customers. Now they want customers to convert the outstanding debt into cashpoints. Which are pretty much worthless. Then they can convert these cashpoints into shares. They seem to think everything can be solved by issuing more shares.
Nice way to try to dump billions of debt in the lap of everybody else.
Time to put this rotten corpse in the ground.

[Heathrow09L]

A few weeks back their own crew were donating money, wonder what’s happened to that?

[Kirks gusset]

calypso

Broadly correct, however, the large creditors already have a judgement which means they would get some chance of picking at the the bones if the plug was pulled, having said that, with such a huge mountain of debt its about 1 cent in the dollar. The exchanging debt for shares only works if the companies supporting the debt are happy to keep effectively writing off the debts as the shares now only worth less than 10% of the debt they were exchanged for.
Regarding AC maintenance at Norwegians costs.. this is not happening, the maintenance fees are also being accrued as balance book debt (agreed at bail out), so effectively the leaseholders are paying to maintain their own assets, aged debt is driving share prices down, which is why they want them back and the compensation judged in their favour.
If 400M were invested now it would only wipe the slate off the aged debt since May and a day later the airline would be cash strapped again.
The real issue on agreement will be getting the lease holders to accept shares and also take their aircraft away as part of the "right sizing", all the 787 would need to go and the majority of the 738s, leaving about 20 A/C in service. This is a big ask of the lease holders that had no choice back in May, now they have a choice and some may just say sod it and not support the "new/old/same plan"
On the other hand, Lease holders may prefer to have their assets free to market, albeit the market is dead at the moment, and accept the deal on the basis they have already lost the money, what they won't want is A/C tied up on PBH contracts and history repeating itself.
With external investment and a 80% reduction in fleet and staff, the Company may survive, or at least be in a shape to be acquired by another player, unfortunately, the likes of Wizz are seizing this opportunity and chaos to expand rapidly into the traditional markets served by NAS and whilst nationalists may be loyal to a local company the travelling public just want the cheapest route from A to B
As of the 4th Dec they required a cash investment of 340M to keep operation going through this process.
To get an idea of the scale of the problems:
In May converted £1.5 Billion in debts to shares, also got £250M state aid, and agreement to convert £250m in PBH costs to shares/bonds.
In reality the debt conversion was not "cash" so it's fair to say the cash reserves plus the state aid and a dribble of revenue is what they've been operating off with heavily reduced crewing costs through government furlough support. The government support may last until March but the daily overheads have sucked all the reserves. Now they need £340M to see them through the next few months despite the CEO saying they could last until next spring through the Examinership process of 150 days.
It's understandable the Irish courts may want to ring fence the Irish assets, but without real cash injection approaching £1B they will only be protecting the brand and jobs in the home market.

[Jonty]

When Thomas Cook went it was the bond holders that pulled the plug.
See who’s buying the bonds, and ask yourself why.

[737Driv3r]

Scandi and Spain are the only good things worth saving because that's where the money in SH is. Plenty of market and loyal custumers for the 90 738s + MAXs.
​​​​The rest is history. Let's hope for the best 🤞

[CW247]

Does anyone know who Norwegian sold their Airbus neo slots to?

[Paul737]

737Driv3r

You forgot to mention that Spain based crew were already on an ERTE way before COVID-19 🤔 Maybe not enough market and not so many loyal customers

[polax52]

Jonty

Because there was a market to sell the assets into. There isn't any more.

[Altostratus]

https://www.flightglobal.com/airlines/norwegian-tests-debt-for-equity-appetite-again-in-bid-for-funding/141466.article

[ManaAdaSystem]

Printing shares in the same way some banana republics print money, and with the same effect.
Several 787 flown from SVG to Ireland today.

[Avenger]

In the UK we were hoping for something more substantial in terms of the proposal. Underwhelmed are the words being used . Repatriating assets is normal practice.

[jeehaa]

ManaAdaSystem

what is your source?

[Diavel]

There is no reason for failed Norwegian to exist. There are already more than enough airlines in Europe,most of them struggling to make a decent profit.
This company was never anything but a Ponzi scheme, Let’s get rid of it. There are other and better airlines out there.

[rotorcloud]

Jesus Christ. What a digrace you are for the pilot Community!

[FRogge]

I would imagine that it is mainly even ****tier companies who are filling the gap, like Ryanair & Wizz.

[Diavel]

You apparently refuse to face the realities. The airline industry in Europe has been struggling for years. We need to do something to at least slow down this idiotic race to the bottom. Norwegian, Ryanair and Wizz air have all been driving this very unfortunate development,

Norwegian has never been able to make enough money, they have always been living on loans and unsustainable expansion. Basically paying todays bills with tomorrows money. They would need to be held under the wings for at least 2-3 years in order to have any chance of long term survival.
Nobody wants to put that much money into a failed. company.

That is why Norwegian will not be missed in any way.

I could not care less what your opinion of me is.

Apparently you are not able to discuss anything in a grown up manner, I would never fly with a person with such limited intellect

[EIFFS]

Diavel

Ponzi scheme, why would make yourself look a dick with a comment like that and a :mad: with let’s get rid of it?

Way better customer service than FR, Wizz and EasyJet, on par or close to with Jet2 ( finances aside) they tried something new and for a while it worked, long haul was great value for money and if any of it comes back then it will need low cost long haul to get the market moving.

Some of the employment practices were messy for all involved but above board with tax and NI paid by all the employers, they paid well too especially if you were in the training department, I wish them well, but it will be a Herculean task to come back from where they are now.

[Kirks gusset]

https://www.irishtimes.com/business/transport-and-tourism/norwegian-s-creditors-make-no-objection-to-high-court-protection-1.4429799

First hurdle overcome, now they have 100 days to secure cash investment and an agreed plan. Importantly to "exit" the process, the investment must be received. Let's see, but at least a breathing space.

But another fly is swimming in the ointment "The court heard that Norwegian Air International, is in dispute with the Revenue Commissioners over €23 million. The State’s Tax Appeal Commission is currently dealing with the issue."
"Creditors seeking a further $28 million in liabilities, including passenger refunds for flights cancelled earlier this year, have emerged since the Norwegian Air companies were granted provisional protection on November 18th."

That's another 51M to find but as a slice of 4.1Billion is small fry, however settlement of any undisputed amounts would be fundamental to a successful outcome.The judge said he had agreed to protection of Oslo-based Norwegian Air as well as its Irish subsidiaries as the survival of each was dependent on the survival of the other.

"I have concluded in this case that it is appropriate to appoint an examiner both in relation to the five petitioner companies and also in relation to the related company Norwegian Air Shuttle ASA," Justice Michael Quinn told the court.

[BWSBoy6]

Looks like SAS aren’t counting Norwegian out yet either.

https://www.flightglobal.com/airlines/sas-not-counting-norwegian-out-as-rival-plans-450m-share-issue/141440.article

[Kirks gusset]

Yes with Wizz looking to base more aircraft and this: https://www.flightglobal.com/airlines/norwegian-start-up-carrier-to-be-branded-flyr/141471.article
It's going to be a bloodbath price wise

In an apparent bid to damage its rival, the Hungarian carrier is cutting prices on the 700-mile route between Oslo and the Arctic city of Tromso to just £15, with some flights operating within five minutes of Norwegian’s departures.
Even before the coronavirus pandemic began, Norwegian was loss-making – by an average of £3.70 per passenger during 2019.

[oceancrosser]

There seems to be an endless supply of people willing to lose money in the aviation industry.

[Nil by mouth]

As an aside I received an email from Norwegian stating that my cash points were due to expire at the end of this year and would I like to extend them until the end of June next year, which I accepted.
Those "cash points" are probably now worth more than Norwegian shares :rolleyes:

[BWSBoy6]

Norwegian share price romping up today. What’s going on?

[vikingivesterled]

Daytraders playing musical chairs with a pennystock.
Plus Norwegian did a litle pump and dump themselves, officially by error: https://newsweb.oslobors.no/message/520314

[Kirks gusset]

Buying and selling your own shares will either encourage others to buy and push prices up, or when the balloon bursts fall through the floor.

Creditors in Scandinavia have filed claims of close to €170 million against troubled airline Norwegian Air (https://www.irishtimes.com/topics/topics-7.1213540?article=true&tag_company=Norwegian+Air) Shuttle (NAS), which has court protection in the Republic and its home country.

!70 Million in the home country and 51Million in Eire, over 221Million now needs settling before the exit process, in other words a lot lot more will be required than the 340M indicated by investors, these debts are not willing to be converted to shares due to their nature.
On the positive side, yet again more breathing space to get shot of the LH fleet and obligations, although they won't want to do that until Boeing settle as Boeing would use such a move to their advantage, although the long arm relationship between Boeing and the Trent means the only perusable case will be the 737 Max.

[SWBKCB]

Another 787 on it's way from SNN - 3 this week.

[uncle-traveling-matt]

Somehow I dont think Wizz Air venture into the Norwegian domestic market is going too well. Today,from local media
“ Wizz Air believes boycott campaigns against the company are bullying and in violation of international law”
Talk about making bad excuses. Loadfactors have been horrendous and they are cancelling departures right, left and center much to the disapproval of their customers.

[uncle-traveling-matt]

Lars Daniel Westby, the analyst who predicted the chapter 11 process for Norwegian a week before it actually happened :

”Norwegian should get rid of the long-haul fleet.. And whether it is sold or closed down "really has nothing to say", because it is in short haul that Norwegian has made money. On the other hand, he believes that there will "certainly" be investors who are interested in Norwegian's market position, brand name and loyalty program. And therefore: - We will fly with Norwegian in the future”, says Westby.

I disagree with Westby regarding the LH-part. Certainly a portion of LH was profitable, but whether that is the case after covid remains to be seen. Initial plans for New Norwegian, indicated around half of the current LH fleet being kept on. Leisure traffic will rebound strongly and Norwegian would be perfectly placed in that market to take up competition with a strong (value for money) product. According media, management are still undecided but owners(creditors) would obviously have to agree.

[davidjohnson6]

Let's assume that in 2022, short haul leisure travel revives and in 2023, long haul leisure travel comes back to life while business travel remains well below 2019 levels
Why would Norwegian be strongly placed ? Surely, all the main network carriers around the world would be competing hard for the same leisure pax travelling to/from northern Europe ?

[Kirks gusset]

https://simpleflying.com/ryanair-long-haul-low-cost/ There has never been a successful low cost LH operator, Freddie Laker tried, Pimera tried https://www.wired.co.uk/article/primera-airline-going-bust-economics-budget-carriers

If you want to trawl the thoughts of "industry experts"..if there is such a thing!

https://centreforaviation.com/events/capa-low-cost-long-haul-global-summit-72/capa-tv

Before Covid it was always a struggle to get Business travel LH, they were the first seats to fill. Yes, potentially there is a market for the cheaper fares but without premium seats carriers struggle to make ends meet, 40 seats at 1000 is a lot more than 60 seats at 400. Multiply this by daily sectors additional boarding times, it just doesn't work. On the other hand, using wide body on SH routes can work, Hainan, THY etc proved this.

[uncle-traveling-matt]

Sure, here is the opinion of Willie Walsh:

However, Walsh was quick to point out that the low-cost long-haul model pioneered by Norwegian was still very much a great idea.

“There is a profitable niche there, and we are going to serve it,” he says. “We are committed to expanding Level. It is performing very well in the markets it is operating in.”

LEVEL is attempting to replicate the success of Norwegian.



At the end of the discussion, Walsh did seem to be a little jealous of what Norwegian CEO, Bjorn Kjos, had been able to pull off (and how Norwegian was really biting at the heels of British Airways on some routes).

“He’s proven, if not to everybody but certainly to us, that the market exists and the customer will embrace the business model.”

https://simpleflying.com/iag-wont-rule-out-another-bid-for-norwegian-but-its-unlikely/

[kungfu panda]

Well yes and no. Norwegian had pockets of profitability. Let's hope that the Creditors restart the Airline and learn the lessons from the past.

[Kirks gusset]

There is a world of difference between code shared flights operated under open skies where established airlines already have the infrastructure and one airline trying to go it alone in an already oversubscribed market.
If NAS have any sense they will concentrate on the profit for sanity of SH operations and forget the vanity of LH where the overheads are crippling the company and demand won't return for years. The shareholders with lease commitments on 787 will obviously want to keep their hardware under contract but any potential external investors will be doubtful given the track record. Of course, if Boeing stump up big bucks, that may just be enough to tip the balance.

[Chris2303]

davidjohnson6

It's sort of a matter of staying alive until then though. Sounds like chance would be a fine thing!

[Elephant and Castle]

Profits are sanity, orders are vanity. A wise old aviation saying that gets ignored time and time again. Norwegian should focus on profit and leave all vanity projects if it wants to survive. Even before COVID the LH adventure has taken a well placed and profitable low cost SH airline to the brink of bankruptcy. I am sure some LH routes where profitable at some times of the year but given the not yet resolved engine problems of the 787, the projected slow start of the LH market and the big question mark over the business model this is an adventure Norwegian can no longer afford. Some will argue with some merit that it never could ....