Hard times for Norwegian

[The Range]

https://edition.cnn.com/2019/09/02/business/norwegian-air-debt-restructure/index.html

[BluSdUp]

No problem.
I singelhandedly saved them by bringing my flightbag AND my little carry on.
Was charged 75 euro at the gate under great protest. 75 euro!
I promised to never fly Norwegian again , I was wished a good day and pleasant journey.
I am not sure WTF they are thinking but pissing of one of the best customers they ever had is not good.
They need me, I like them, they have stupid low fare in general and HAU OSL in particular.
Saved me 100 000s of kr. thanks for the ride.

That is on a personal level.
The more rational side of me says: OOOPS!
Betting the Gatwick Slots for extended credit!!??
Short analyses : If the RR engines dont start working soon and the MAX not fixed by say end February , it is all over!

I sure hope they survive as I can afford the extra luggage price and have lots of good friends in NOR, but for the first time I have lost the faith.

Regards
Cpt B

[JohnnyGoode]

“The more rational side of me says: OOOPS!
Betting the Gatwick Slots for extended credit!!??
Short analyses : If the RR engines dont start working soon and the MAX not fixed by say end February , it is all over!”

A market analysis from a guy who does not understand why excess cabin luggage is an issue for Norwegian (and any airline in Europe these days)
- that’s rather (unintentionally) humorous. Thank you ‘captain’, keep it up;)

[BluSdUp]

Oh , but I think it was quite entertaining and it was well worth the 75e.
Consider the loss for them the ca 75 times I did not pay!
Now that is humorous.
At least to me!

[Nightstop]

What part of their T&C’s don’t you understand?Included in your hand baggage:


One carry-on bag free-of-charge. See below.
One small personal item to be placed under the seat in front of you (e.g. a small handbag, slim laptop case, duty free bag). See below.
Please pack essentials in your personal item (e.g. medicine, valuables and baby items).
The above comprises 1 cabin bag (55 x 40 x 23) and a small personal item (25 x 33 x 20). Max total weight: 10 kg.

[Livesinafield]

The good old carry on luggage debate always makes me giggle watching pax go absolutely berserk because their bag doesn’t fit into the sizer and they are charged, funny thing is if you just have a read of the regs or even better check your bag in guess what big surprise, you don’t get stung...

[Meester proach]

What irritates me is the check in staff letting them get to the plane with all that clobber.

Theres normally no space for my wallet...

[Clop_Clop]

Still the design of the aeroplane is what it is, and bags meant to go in the hold instead of onboard...

[jmmoric]

I would just wish all companies has the same size for carry on's... It annoys me that I can take a bag along in one carrier, but in another I cannot....

In the end, if they'd just improve the time is takes for luggage to go from aircraft to band, I'd never carry anything into the aircraft.... and save them the time I have to spend putting my carry on in the overhead bin.

There must be an easier way of handling luggage...

[Joe le Taxi]

Why are y'all blithering on about bags - this is about a potential default or forced debt restructure, which if it fails, looks like collapse of Norwegian (they mention a buyout in the event of default, but a default would lead precipitously to administration). New bonds secured by LGW slots?... But can they do that, because slots cannot be collateralised and traded unless they are owned an operated by an airline?

[glofish]

Since the pioneer's days of Freddie Laker, Longhaul Lowcost has always and only gone in one direction.
But still some Willheneverlearn finds some Willtheyneverthink who invest in the next hopeless chapter.

[The Fat Controller]

At least 5 of their Dreamliners currently at Prestwick, wonder if they'll ever leave !

[bringbackthe80s]

Since the pioneer's days of Freddie Laker, Longhaul Lowcost has always and only gone in one direction.
But still some Willheneverlearn finds some Willtheyneverthink who invest in the next hopeless chapter.

Not true, the ones within major airlines do work. But a company not within another company has very little chance I’d say

[srjumbo747]

Not true, the ones within major airlines do work. But a company not within another company has very little chance I’d say
Oh? Care to name a few?

[Riskybis]

Oh? Care to name a few?

i guess IAGs Level is pretty low cost

[Plastic787]

Not true, the ones within major airlines do work. But a company not within another company has very little chance I’d say


Is that why Lufthansa have brought all Eurowings Long Haul back to mainline?

(Oh and Air France shut down Joon too).

[calypso]

It seems to me that Norwegian is finally trying to put its house in order. Closing unprofitable routes, selling non core assets and re-structuring debt is part of that. Maybe painful short term but definatly the right thing to do to get back on track.

[krismiler]

Since the pioneer's days of Freddie Laker, Longhaul Lowcost has always and only gone in one direction.

If there was money to be made in long haul low cost, Michael O'Leary would have been onto it years ago and Ryanair would be operating widebodies. Would a company which would charge for using the lavatory onboard if it could get away with it pass up a money making opportunity ?

The companies which stayed close to the basic low cost model such as Southwest, Ryanair and Easyjet have mostly been successful. Those that went longhaul with widebodies mostly haven't.

The A321LR and B737 MAX will be interesting as routes beyond the traditional out and back same day will be possible with the advantage that they can still be used on the regular network if the longer stuff doesn't work out.

[Joe le Taxi]

It seems to me that Norwegian is finally trying to put its house in order. Closing unprofitable routes, selling non core assets and re-structuring debt is part of that. Maybe painful short term but definatly the right thing to do to get back on track. Interesting spin - but being forced into delaying debt repayment can hardly be regarded as"putting your house in order". Apart from anything else, it will make future debt more expensive

[lomapaseo]

Interesting spin - but being forced into delaying debt repayment can hardly be regarded as"putting your house in order". Apart from anything else, it will make future debt more expensive

But doesn't it give the airline more time to be bailed by somebody with deeper pockets?

[CaptainProp]

But doesn't it give the airline more time to be bailed by somebody with deeper pockets?

Maybe, but who would buy? I just don’t see it happening....

CP

[calypso]

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

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

[sarah737]

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

If that would be the case Norwegian would simply issue new bonds to pay back the old ones. Only problem: NOBODY wants to buy Norwegian bonds, these bonds are now yielding over 30% in times when banks offer 0% and still there are no buyers..
Defaulting on a bond severely restricts the issuer’s ability to acquire financing in the future, a default is usually a last resort and therefore a sign of severe financial distress.

[repulo]

Is that why Lufthansa have brought all Eurowings Long Haul back to mainline?

(Oh and Air France shut down Joon too).


LH didnˋt bring back the EW long haul ops to the mainline. EW is continuing to expand in the LR market. What was brought back to the mainline is the management of EWˋs LR business.

[BluSdUp]

Jan Petter Sissener , a finance man in Oslo that has made millions on shorting NOR stocks and a 17% owner of a 250 million euro obligation loan ending in December is not happy with the fact that Norwegian went public with this rather hairbrained idea of using the Gatwick slots as colateral/guarantee for extension of the loan. BEFORE asking him and other bond owners!
I would agree with him, how desperate can You come across , this did drop the stock by over 10%.
BTW
He wants a final and LARGE financial restructure , and he still thinks the Company is viable!

And considering he also is stuck with a rather big portfolio of Stocks, he would talk it up.
This chap is if anything an honest gambler, and quite a few listen to him.
So lets see what he decides.
If he says: NO! I would considering updating my CV.

Regards
Cpt B

[MCDU2]

Its viable if it scales back to what it did best but I am not sure that fits into the vision that the existing management have. Seems like a willy waving exercise at the expense of the stakeholders. No matter what way you look at it selling off the assets, putting up slots as collateral and sale and leasebacks whilst your credit card company has placed restrictions on your cashflow is not a viable way to be running the business. Oh and winter is here and fuel has never been so cheap so all of their competitors have already booked the profits and have cash in the bank to get them through till next year.

PS: Would Level not be part of IAG Cargo and have an additional revenue stream?

[krismiler]

The only way long haul low cost seems to work is if a full service airline off loads routes on which it can't make a profit to its own subsidiary. It knows the route and the income it can generate, which may not be enough to cover the mainline operating costs, but will allow a profit if the operation is peeled back to the basics with staff on lower pay, no frills and high density seating.

The subsidiary benefits from the parent company's purchasing power when it comes to buying aircraft, fuel, maintenance, insurance and back end support which it would not have as an independent entity. Crews can be seconded and aircraft provided in the event of disruption. Access to the frequent flyer program and connecting flights can be provided within the network.

A stand alone long haul low cost would battle to survive without a backer with deep pockets.

[Rwy in Sight]

The only way long haul low cost seems to work is if a full service airline off loads routes on which it can't make a profit to its own subsidiary. It knows the route and the income it can generate, which may not be enough to cover the mainline operating costs, but will allow a profit if the operation is peeled back to the basics with staff on lower pay, no frills and high density seating.

The subsidiary benefits from the parent company's purchasing power when it comes to buying aircraft, fuel, maintenance, insurance and back end support which it would not have as an independent entity. Crews can be seconded and aircraft provided in the event of disruption. Access to the frequent flyer program and connecting flights can be provided within the network.

A stand alone long haul low cost would battle to survive without a backer with deep pockets.

Air Asia seems to be successful without following that model.

[Doors to Automatic]

Look out for Q3 results around Oct 10, with a profits warning five or so days before (if applicable). It needs to show a profit similar to last year for the airline to have enough cash to make it through the Winter. If it shows anything else and if the bond extension is not agreed, I would expect a very challenging Winter.

[Flying Clog]

I fly around Asia, and can pretty much say I've NEVER seen an Air Asia wide body. I know they exist, but they must be extremely thin on the ground compared to their short haul a320 ops.

[medod]

Air Asia has no wide-bodied. Air Asia X is their low-cost long-haul subsidiary, with A330s.

[clipstone1]

I believe AirAsia X has 24 A330 in Malaysia, 2 in Indonesia and 11 in Thailand

[krismiler]

The financial performance of AirAsia X hasn't been brilliant even though the incidents with Malaysia Airlines put a lot of people off the national carrier. The Malaysian A320 operation has grown massively and generally been profitable, mixed results have been experienced with subsidiaries started in other countries.

There is the possibility of taking over Malaysia Airlines if the turn around plan doesn't work out.

[ironbutt57]

The financial performance of AirAsia X hasn't been brilliant even though the incidents with Malaysia Airlines put a lot of people off the national carrier. The Malaysian A320 operation has grown massively and generally been profitable, mixed results have been experienced with subsidiaries started in other countries.

There is the possibility of taking over Malaysia Airlines if the turn around plan doesn't work out.


in fact Air Asia has turned some 330 orders into 321...

[Doors to Automatic]

I thought this was a thread about Norwegian? :ok:

[babemagnet]

On ch aviation:

Prominent Norwegian shareholder rejects bond extension

cant read it its for Pro only

[Fladbrokeandbusted]

On ch aviation:

Prominent Norwegian shareholder rejects bond extension

cant read it its for Pro only

yes story om Borsen.dk today that They refused to postpone the repayment of the Loan to norwegian. Norwegian has offered Security in the Gatwick slots but so far sissener apparently refused to Extend the loan further .

The problem with norwegian is fundamentally wrong financing of the entire Company, Along with Bad leasing deals etc. Lenders did last week, According to borsen, say that they lost confidence with norwegian and did not see any solutions in the long run.

Sissener along with a few others is able to sink the entire turnaround for norwegian as they Are the biggest lender.
They have 3.4 mia norwegian kr due by Dec this year and Next year from norwegian which they now have refused to extend without more Equity Beeing put into the Company.

Seems like dire times for norshuttle.

[BluSdUp]

This chap is fed up with the muppets that run Norwegian.
He has 60M euro worth of useless unsecured Bonds if they fold. He wants security. He wants a restructuring of the loans and a massive cash insertion by the Stock owners.
On Monday he votes NO!

[calypso]

Nope, he wants to convert the bonds into shares. He says as much on a number of interviews.

[directmisbi]

Who cares what Sissener wants. He doesn't have majority, not even among the other bondholders. His little dog and pony media show? Coming to a circus near you...Remember most of the bondholders are never disclosed, but my best guess is
that Mr John Fredriksen is probably the biggest bondholder, and thus Norwegian and Kjos are all smooth sailing from here..
Even with 19 max grounded, and 10 787 very much on terra firma and going through inspections, the CFO still guiding the markets of a full year operating result 2019 with a 100 percent improvement compared to last year. I call that pretty impressive in the current market conditions.Norwegian Air Shuttle (“NAS” or the “Company”) preliminary result of vote relating to proposed amendments to its two unsecured bonds NAS07 and NAS08

Reference is made to the stock exchange notice published on 2 September 2019 relating to a proposal for certain amendments to its two unsecured bonds NAS07 and NAS08, and subsequent adjustment announced to the stock exchange notice published on 9 September 2019. Upon expiry of the early bird fee deadline and based on a preliminary basis, the Company has received confirmation from the financial advisors that they have reasonable visibility of the receipt of positive voting undertakings and proxies representing more than 2/3 of the total voting bonds relating to NAS07 and NAS08. Please note that the calculation of the number of votes is preliminary only and remains subject to potential adjustments through a verification process currently being undertaken by Nordic Trustee AS. The final result will be announced once confirmed by Nordic Trustee AS on 16 September 2019 after the announced Bondholders’ meetings. DNB Markets, a part of DNB Bank ASA, and Pareto Securities AS have been retained as financial advisers for NAS

[aircowboy]

It looks like Norwegian wants to push Sissener using the media

[sarah737]

the CFO still guiding the markets of a full year operating result 2019 with a 100 percent improvement compared to last year. I call that very impressive..

Would you call the H1 figures, 1,4 billion NOK loss compared to a 0,3 billion profit last year, also very impressive?
What I call very impressive is the debt which doubled in six months time!
Increasing debt, defaulting bonds, not looking good at all.

[Doors to Automatic]

The Q3 results will be very interesting. It is difficult to see how the airline will break even, never mind generate the profits needed to see off the duff quarters. Revenues are broadly flat whilst seat costs are expected to be up around 20% on last year.

[NEDude]

It is looking like the bond holders will approve the extension:

https://newsweb.oslobors.no/message/484994

[Ancient Mariner]

NAS shares up 10.11% today.
Per

[oceancrosser]

It is looking like the bond holders will approve the extension:

https://newsweb.oslobors.no/message/484994

Like bondholders really have a choice: deny the extension=bankruptcy. All is lost.
Approve the extension=(possible) bankruptcy. All may be lost...

[WHBM]

I'm waiting for Airport Coordination Ltd, the Gatwick slot managers, to announce that slots cannot just be transferred off to any old non-aviation organisation. The last thing we want is financial industry intermediaries (these bond organisations and others) inserting themselves, and their margins, into the slot trading process.

[Doors to Automatic]

I'm waiting for Airport Coordination Ltd, the Gatwick slot managers, to announce that slots cannot just be transferred off to any old non-aviation organisation. The last thing we want is financial industry intermediaries (these bond organisations and others) inserting themselves, and their margins, into the slot trading process.

I was thinking exactly the same today. Slots cannot be held as a commodity. They operate on “use it or lose it” basis, so unless they are transferred to another airline they are effectively worthless.

[andrasz]

Slots cannot be held as a commodity

It may sound as legal hair splitting, but yes they can. It is not the slots themselves, but the potential proceeds of selling those slots to a third party which is the collateral. As long as NAS owns those slots, they can be sold to another airline, and the future income may be treated as an asset. I sure the wording of the deal will sound along the lines of NAS being obliged to sell those slots in case of a future bond default, the beneficiaries of the sale being the bondholders. Just another fine day for lawyers, should have become one ... :)

[Joe le Taxi]

Greybull/Monarch was a precedent for this, wasn't it? As soon as an airline defaults on its debts and cannot renegotiate, it is bust, it loses its operating licence and it's slots are put back in the pot without recompense? The obvious solution is to have a fire sale of the slots prior to pulling the plug, but it would be tricky to convincingly keep the airline solvent while doing this. (Edit - I forgot that greybull did eventually get the slots on appeal, on the basis that some parts of monarch could still be considered an "air carrier")

The other parallel is Thomas cook's bond holders, who in the normal way would have first dibs on liquidation assets - and if they stood a good chance of selling on the most valuable assets - the slots - I very much doubt they would have agreed to the crippling D4E swap, which has the 2022 bonds trading at about 14c in the euro. Then you have the CDS market saying 'hang on a minute' - and what might initially seem like a simple shuffling around of debt, assets and equity, suddenly becomes fraught with problems

[andrasz]

The obvious solution is to have a fire sale of the slots prior to pulling the plug, but it would be tricky to convincingly keep the airline solvent while doing this.

If I were a bondholder, I would only accept this proposal if there were an irrevocalbe offer from some other airline to buy those slots for a given price. Knowing the LGW slot market, I'd dare say such an offer is probably on the table.

[Doors to Automatic]

I doubt the bondholders have much choice. It is potentially worthless slots or a worthless bond come December. As Trump once said to his lenders, “ If I owe you a million dollars, it is my problem; if I owe you one hundred million, it is your problem!”

I cannot imagine why the shares are surging at the moment. I would not be touching this company with a bargepole.

[NEDude]

I doubt the bondholders have much choice. It is potentially worthless slots or a worthless bond come December. As Trump once said to his lenders, “ If I owe you a million dollars, it is my problem; if I owe you one hundred million, it is your problem!”

I cannot imagine why the shares are surging at the moment. I would not be touching this company with a bargepole.

From a neighbor who works at Norwegian, internally they are saying the re-structuring plan that was put in place for 2019 is meeting all the projected goals promised to the investors and creditors. Basically they had a best case projection, a worst case projection, and median projection, and they are apparently directly hitting all of the median projections. As he puts it, they are telling them things are still crucial, but the re-structuring is working as planned, so there is cautious optimism. Perhaps the share price is indicative of the investors seeing that information.

[directmisbi]

Norwegian will deliver according latest analysts from SEB

We will see that when the Q3 figures are presented in October, and the company provides positive guidance for the challenging Q4 and Q1 periods. As the effects of consolidation from growth to profitability begin to hit in full, compensation from Boeing and Rolls Royce comes into account, wet lease of aircraft declines and one scaled-down winter program with its own planes begins, Norwegian will be on its way to profitability. Credit card issuers will release the 70% cash flow plug, provided that Q3 and guiding are delivered beyond expectation, and Norwegian is well placed to renegotiate credit terms. This can give almost normal credit card sales cash flow, when the important sales for the summer season 2020 are launched in late December, thus there will be no credit crunch and working capital under NOK 1.5 billion. The share issue ghost stays in the closet behind a locked door. CEO Geir Karlsen will deliver and had he not had faith in it himself, then the company would have already started a share issue or conversion of debt to equity to secure the company's position for the winter.

[Ancient Mariner]

Up another 11.1% today.
Per

[Doors to Automatic]

That SEB analysis looks a bit suspect IMHO. I cannot imagine how Q3 will “guide beyond expectations” when passengers and revenues are essentially flat (July and August stats) and seat costs are at least 10% but possibly 20% higher than last year (assuming they broadly follow Q1 and Q2 trends). Even then, when Q3 was profitable, the airline reported a robust loss for the year.

Even if the cost savings are realised the airline has a long way to go to break even.

[NEDude]

Bond extension is officially approved.

https://business.financialpost.com/pmn/business-pmn/norwegian-airs-bondholders-back-debt-relief-plan-2

[JonEMA]

Norwegian defied gravity today as one of the few airlines stocks around the world not to get hammered by rising oil prices. In fact, DY rose over 2% on the news that it was one of the least hedged of all European airlines and set to lose out badly but that didn't put off Norwegian's bankers from propping up the share price in an attempt to keep the whole ridiculous venture going. I'm with Doors to Automatic, 3rd Quarter is going to be miserable and full-year results will see huge losses similar to last year. Quite how they can progress with no site of MAX returning and the urgent need for further 787 checks following last month's incident in Italy is beyond me.

[Chugalug2]

If they want to sell the slots they need to get a move on. The Consumer and Marketing Authority is proposing an auction based, as against administratively allocated, airport slot system a la TOC's and Mobile Phone Channels:-

>d. Increased financial risks to airlines – in a sector that already has low operating profit margins, and given the cyclical nature of the airline industry, increasing costs may push the least efficient airlines out of business. While this may lead to a more efficient and effective market in the medium to long term, there may be unintended consequences from an aviation policy perspective. For example, if an airline went into administration, passengers are likely to face significant disruption. However, this risk could be mitigated by allowing airlines time to plan for a slot auction and being explicit about forward auction timetabling.<


https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/767230/cma-advice-on-impacts-of-airport-slots.pdf

[JonEMA]

Norwegian will deliver according latest analysts from SEB

We will see that when the Q3 figures are presented in October, and the company provides positive guidance for the challenging Q4 and Q1 periods. As the effects of consolidation from growth to profitability begin to hit in full, compensation from Boeing and Rolls Royce comes into account, wet lease of aircraft declines and one scaled-down winter program with its own planes begins, Norwegian will be on its way to profitability. Credit card issuers will release the 70% cash flow plug, provided that Q3 and guiding are delivered beyond expectation, and Norwegian is well placed to renegotiate credit terms. This can give almost normal credit card sales cash flow, when the important sales for the summer season 2020 are launched in late December, thus there will be no credit crunch and working capital under NOK 1.5 billion. The share issue ghost stays in the closet behind a locked door. CEO Geir Karlsen will deliver and had he not had faith in it himself, then the company would have already started a share issue or conversion of debt to equity to secure the company's position for the winter.


https://www.thetimes.co.uk/article/rome-blowout-turns-up-heat-on-rolls-royce-s-trent-engine-nb6svvcs (https://www.thetimes.co.uk/article/rome-blowout-turns-up-heat-on-rolls-royce-s-trent-engine-nb6svvcst)

​​​​​​What now for DY ?

[JonEMA]

Norwegian will deliver according latest analysts from SEB

We will see that when the Q3 figures are presented in October, and the company provides positive guidance for the challenging Q4 and Q1 periods. As the effects of consolidation from growth to profitability begin to hit in full, compensation from Boeing and Rolls Royce comes into account, wet lease of aircraft declines and one scaled-down winter program with its own planes begins, Norwegian will be on its way to profitability. Credit card issuers will release the 70% cash flow plug, provided that Q3 and guiding are delivered beyond expectation, and Norwegian is well placed to renegotiate credit terms. This can give almost normal credit card sales cash flow, when the important sales for the summer season 2020 are launched in late December, thus there will be no credit crunch and working capital under NOK 1.5 billion. The share issue ghost stays in the closet behind a locked door. CEO Geir Karlsen will deliver and had he not had faith in it himself, then the company would have already started a share issue or conversion of debt to equity to secure the company's position for the winter.


https://www.thetimes.co.uk/article/rome-blowout-turns-up-heat-on-rolls-royce-s-trent-engine-nb6svvcs (https://www.thetimes.co.uk/article/rome-blowout-turns-up-heat-on-rolls-royce-s-trent-engine-nb6svvcst)

​​​​​​What now for DY ?

[warkman]

perhaps the demise of Thomas Cook will help Norwegian?.

[Doors to Automatic]

@JonEMA - does this affect more 787s than the ones already grounded? (the article is unclear). If so this is terrible news.

With regards to TCX I don’t imagine there will be much effect as there was little route overlap and whilst TCX did offer seat only, most of its traffic was IT. I would think Tui and Jet 2 will be set to benefit the most.

[ManaAdaSystem]

perhaps the demise of Thomas Cook will help Norwegian?.

Norwegian operates a lot of charter flights for Ving, a Scandi branch of Thomas Cook...

[JonEMA]

@JonEMA - does this affect more 787s than the ones already grounded? (the article is unclear). If so this is terrible news.

With regards to TCX I don’t imagine there will be much effect as there was little route overlap and whilst TCX did offer seat only, most of its traffic was IT. I would think Tui and Jet 2 will be set to benefit the most.

@Doors - also not sure......but I'm guessing there will be aircraft of similar vintage to the one involved in the FCO that need to be looked at asap............anyone with access to a cycles and hours Fleet database will have a better view......

Will just have to wait for news on this from DY .........but if they have to prolong wet leases as cover and/or cull their transatlantic routes as they have in Europe then it will severely hamper their ability to generate a contribution over the winter months.....

[golfyankeesierra]

In the quoted Times article in post 61, what do they mean by grounding?
The FTSE 100 engineer said yesterday that the incident had accelerated its planned programme of replacing turbine blades in older Trent 1000 (https://www.thetimes.co.uk/article/engine-costs-mounting-up-at-rolls-royce-llxzbtn6l)engines for the Boeing 787. It means that dozens of the 787s, flown by the likes of Norwegian, British Airways, Virgin Atlantic and Air New Zealand, will be grounded in the months to come.
Do they expect more groundings in absence of replacement turbine blades, or do they mean grounding as in “downtime” to in install replacement blades which are becoming more and more available due to RR “accelerated efforts”, effectively “ungrounding” the RR 787?

[INKJET]

In the quoted Times article in post 61, what do they mean by grounding?

Do they expect more groundings in absence of replacement turbine blades, or do they mean grounding as in “downtime” to in install replacement blades which are becoming more and more available due to RR “accelerated efforts”, effectively “ungrounding” the RR 787?

There is a plan in place to significantly reduce the amount of long haul flying this coming winter which will allow for a catch up much of Trent issues.

Things will then gear up going into spring, new type rating course are starting shortly.

Some one said recently that they have stopped their previous business model of buying aircraft then thinking about where to use them as they are delivered!!

Much of the waste of previous years has gone for good, but plenty of fat still to cut.

[JonEMA]

In the quoted Times article in post 61, what do they mean by grounding?

Do they expect more groundings in absence of replacement turbine blades, or do they mean grounding as in “downtime” to in install replacement blades which are becoming more and more available due to RR “accelerated efforts”, effectively “ungrounding” the RR 787?
Who knows, but my sense is that's it's less about replacing the blades and more about the rate at which they can complete the work and for whom..

Clarity need by the airline ....

[Ancient Mariner]

A Norwegian owned company just sold 5 off B737-800. I bet they got a nice prices.
Per

[gravityf1ghter]

A Norwegian owned company just sold 5 off B737-800. I bet they got a nice prices.
Per

To who? Where did you read this?

[speedrestriction]

To who? Where did you read this?

To HK based recycler - article on flightglobal.

[Ancient Mariner]

To who? Where did you read this?
A Norwegian financial web site, Min24.
On radio just now mentioned that byer was a Chinese leasing co.
Per
Edited to add:h //www.google.com/amp/s/www.marketwatch.com/amp/story/guid/84CDC928-3DA8-4776-A31C-F5045718F646 (https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/84CDC928-3DA8-4776-A31C-F5045718F646)

[procede]

A Norwegian financial web site, Min24.
On radio just now mentioned that byer was a Chinese leasing co.
Per
Edited to add:h //www.google.com/amp/s/www.marketwatch.com/amp/story/guid/84CDC928-3DA8-4776-A31C-F5045718F646 (https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/84CDC928-3DA8-4776-A31C-F5045718F646)
If this is a sale and lease back, it is probably the beginning of the end.

[NWCoast]

If this is a sale and lease back, it is probably the beginning of the end.

It is not.
I've flown two of the individuals recently, they were just given a fresh lick of all-white paint.
Been the plan all along to sell off some of the older NGs - now... Where did we put those shiny new -8s we were replacing them with again? 😬

Seeing as there are EI-regs flown by NAS crew under the NAI AOC, company seem to have seats to fill with bums anyway.
Full interoperability for crew in all AOCs is next from what I hear.

[Ancient Mariner]

Norwegian just cancelled all flights from TRF, Torp Sandefjord to Spanish destinations. Can't remember from which date. Transferred ticketed pax to Oslo Gardermoen OSL.
One or two surplus 737 from that decision?
Per

[Doors to Automatic]

Cancelling routes left right and centre, defaulting on loans, selling off assers and incurring eye-watering wet lease costs does not add up to a well run and prosperous airline.

Unless Q3 results are spectacular, the airline will not survive the Winter.

[A and C]

A very interesting theory but having done four airline bankruptcy’s I don’t see any of the usual indications of lack of liquidity in Norwegian.

Clearly mistakes have been made and multiple AOC ‘s might spread the financial risk but at the cost of interoperability , this problem is currently being addressed.

luck also plays a part and the problems with both the 737MAX & B787 engines have not helped Norwegan’s problems.

Looking forward it is the recruitment and training of crews to keep the fleet in the air when the 737MAX comes back and the 787 problems are sorted that will become the limiting factor in moving from a just about viable financial position to one of a highly profitable business.

The financial bond holders clearly see things the same way with bonds recently being extended for two years.

[Smooth Airperator]

The financial bond holders clearly see things the same way with bonds recently being extended for two years.

or they literally have no other choice?

[Plastic787]

As a bond holder if you had payment due would you:

A) call it in immediately with absolutely no prospect of getting any money back due to that action resulting in the company’s insolvency.

Or

B) give extra time for restructuring in the slim hope you might at least get something back on your investment.

No brainer I would imagine? Hence why you can’t really use that as an indicator of decent prospects ahead.

[Doors to Automatic]

.....not to mention that the bond holders now have the LGW slots as security. Saying yes to an extension was therefore an absolute no-brainer and is in no way an indicator of the company’s future prospects, good or bad.

[speedrestriction]

Apparently the market for used wide bodies is not great at the minute - pulling the plug now would not necessarily result in great returns to the creditors after liquidation.

£2,700,000,000 is a lot of money to owe.

[directmisbi]

https://www.reuters.com/article/us-norwegianair-leasing/norwegian-air-secures-airbus-fleet-deal-earnings-top-forecast-idUSKBN1X30CX?il=0


It’s a testament to Norwegian’s business strategy that they can deliver this kind of result despite of its entire 737MAX fleet grounded and ongoing Rolls Royce engine problems.

[lederhosen]

I wish Norwegian and the many ex colleagues who fly there well. This is definitely good in cash flow terms. However the enthusiasm is mainly about another asset sale. It may have been a smart move to order Airbus NEOs particularly given the growing success of the long range 321. It does though give Norwegian a bit more breathing space.

[beardy]

There was a really interesting article, granted by a journalist, about Chinese investors having difficulty picking good investments in the West. There seems to be an assumption of growth rates similar to tho seen in their domestic market and which are unachievable in the stressed companies they choose. Of course there are notable exceptions to this observation, I hope that this is one.

[calypso]

This is not really an asset sale. The aircraft concerned have not been built yet and therefore they are not really company assets. Since Norwegian has decided to stop growing and to concentrate on making some money it makes perfect sense to sell the delivery slots. Better that than to keeping pushing aircraft onto new routes that might take years to become profitable

[procede]

Any company can post a profit by selling off all their assets. Medium to long term, I would not say it is looking good. Direct operational costs will definately go up due to the sale and lease back...

[NEDude]

I wish Norwegian and the many ex colleagues who fly there well. This is definitely good in cash flow terms. However the enthusiasm is mainly about another asset sale. It may have been a smart move to order Airbus NEOs particularly given the growing success of the long range 321. It does though give Norwegian a bit more breathing space.

It is true it is about an asset sale, but it is not an asset Norwegian uses in its operation. It is also not a full sale of the assets. Norwegian will have a stake in the leasing company that is buying the airplanes, and will be able to earn some income off of the leases. The big thing this does is reduces the financial obligations of Norwegian over the next few years, significantly reducing their debt load, which has been a noose around their necks.

[happybiker]

Delays cannot help the balance sheet either!
https://www.dailymail.co.uk/news/article-7611889/Plane-crazy-French-bulldogs-wearing-tutus-ground-flight-Gatwick-airport.html

[Wickerbill]

It is true it is about an asset sale, but it is not an asset Norwegian uses in its operation. It is also not a full sale of the assets. Norwegian will have a stake in the leasing company that is buying the airplanes, and will be able to earn some income off of the leases. The big thing this does is reduces the financial obligations of Norwegian over the next few years, significantly reducing their debt load, which has been a noose around their necks.

I absolutely agree, large debt piles that linger around for years are the death-knell of companies - just witness Thomas Cook Group. Getting control of debt so that the EBITDAR is not completely eaten away by interest payments and leasing costs is the ONLY way to survive long term. Arguably, Norwegian should sell further assets and consolidate around areas of its operation that are profitable or have the potential to be profitable in the near future. "Slow burners" and prestige routes / assets need to go...nowish.

[Meester proach]

Delays cannot help the balance sheet either!
https://www.dailymail.co.uk/news/article-7611889/Plane-crazy-French-bulldogs-wearing-tutus-ground-flight-Gatwick-airport.html


emotional support animals are a massive pain in the ass. However I would think it’s US lawyers that have forced carrying these on airlines.

[RTO]

Norwegian apparently looking at buying 40 SSJ in order to secure RU overflight permits, according to NO newspapers:
https://translate.google.com/translate?hl=en&sl=no&tl=en&u=https%3A%2F%2Fe24.no%2Fboers-og-finans%2Fi%2F8mzrPd%2Fnorwegian-moette-russisk-flyprodusent-avviser-at-en-avtale-er-signert

[directmisbi]

Norwegian may have found one "loophole" for large-scale operation to Asia.
If the company is to succeed with low-cost long-distance travel to South-East Asia, access to the Siberian Corridor is a must, but the aviation agreement between Scandinavia and Russia only gives permission to SAS and there is little likelihood that there will be any change to it.
But, if a deal is made with Russian aircraft manufacturer Sukhoi and it includes the purchase of 40 aircraft, then it could open up the Siberian corridor for Norwegian! These 40 Sukhoi aircraft do not have Norwegian use for themselves, but they can be added to the new JV leasing company, where the Chinese bank owns 70% and Norwegian 30%. Sukhoi aircraft are already operating in China and the need for short and medium-haul aircraft in China and a number of other markets in Asia is considerable, thus there is limited downside risk if an order for 40 new Sukhoi aircraft is placed for the new JV leasing company.

[Dave Gittins]

With Covid 19 about I expect most other airline shares are at a low too

[NOC40]

Don't look at the shares, look at the bonds. Convertibles issued at 100 in November trading at 45-50. ie debt investors expecting to get back 50p in the pound

[WHBM]

With Covid 19 about I expect most other airline shares are at a low too
Well IAG, to take an example, may have fallen over the last month, but are the same place they were 6 months ago, at 431p. Norwegian have lost three-quarters of their value over the same period. IAG actually went up from 408 to 431 in the course of today.

[rotorwills]

I truly would not be surprised if they can survive. It's not a good prognosis for the aviation industry. Hope they do but have my doubts they can survive the virus event.

[Doors to Automatic]

I am not sure how they are going to raise more funds at the moment. Investors would get a similar return by taking the cash out in bank notes and setting fire to it.

Unfortunately over-zealous expansion and launch of long-haul have placed this great airline at the edge of the cliff.

I hope I am wrong but I would give them a 10% or lower chance of survival beyond this year.

[directmisbi]

Card aquirers have a hold back of almost 100 percent. Funds are released on the day pax are travelling. This has been the situation for more than a year. Receivables are standing at more than 11 billion nok. These are insane numbers and any normal company would have been bust long time ago if it wasn't for the work of a brilliant CFO. It that context it can't really get worse, only better. Recent analysis from HSBC (Andrew Lobbenberg) estimate that even in their Corona ”high impact scenario”Norwegian woule ”..still be able to meet the book equity and liquidity covenants..”
Norwegian are already in battle mode with most of the network on part-time, recruitment freeze, and a absolute minimum expenditure across the network. Something most companies are only starting to implement under a lot more stressful circumstances.
Please also consider the fact that Norwegian are almost unhegded on fuel, another great advantage towards it's peers.
Lastly, I would like to point out that Norwegian has 18 max on the ground and (as the only company, something most Scandinavian analytics have forgotten) not received a single dime from Boeing yet. Negotiations are ongoing and a large cash amount are expected.
If this is not enough, professional investors can see through all of this, and think 6 months ahead..

[WHBM]

Card aquirers have a hold back of almost 100 percent. Funds are released on the day pax are travelling. This has been the situation for more than a year. Receivables are standing at more than 11 billion nok. These are insane numbers and any normal company would have been bust long time ago if it wasn't for the work of a brilliant CFO.This is difficult to understand. Merchant Card Acquirers know that even in the event of a failure, not everybody makes a Chargeback claim. It's not as if refunds are automatic, there's a convoluted process to go through. So 100% holding is over the top. There's a comparable scheme in the UK for train fare refunds in the event the train is cancelled/late more than a certain amount. Apparently claims run at about 10-15% of those entitled.

[Doors to Automatic]

This is difficult to understand. Merchant Card Acquirers know that even in the event of a failure, not everybody makes a Chargeback claim. It's not as if refunds are automatic, there's a convoluted process to go through. So 100% holding is over the top. There's a comparable scheme in the UK for train fare refunds in the event the train is cancelled/late more than a certain amount. Apparently claims run at about 10-15% of those entitled.

The railway claims include a range of options depending on how late the train is. For many tickets a slightly late train might only entitle the passenger a refund of a few pounds so most won’t bother. Likewise, if a train is cancelled there will probably be another one within an hour, so many people won’t bother claiming, or may not even know about the scheme. An airline collapse is a different matter. Someone stranded in San Francisco for example cannot just hop onto another plane. Most people would contact their credit card company I would think and certainly many more than 15%

[teamax]

Card aquirers have a hold back of almost 100 percent. Funds are released on the day pax are travelling. This has been the situation for more than a year. Receivables are standing at more than 11 billion nok. These are insane numbers and any normal company would have been bust long time ago if it wasn't for the work of a brilliant CFO. It that context it can't really get worse, only better. Recent analysis from HSBC (Andrew Lobbenberg) estimate that even in their Corona ”high impact scenario”Norwegian woule ”..still be able to meet the book equity and liquidity covenants..”
Norwegian are already in battle mode with most of the network on part-time, recruitment freeze, and a absolute minimum expenditure across the network. Something most companies are only starting to implement under a lot more stressful circumstances.
Please also consider the fact that Norwegian are almost unhegded on fuel, another great advantage towards it's peers.
Lastly, I would like to point out that Norwegian has 18 max on the ground and (as the only company, something most Scandinavian analytics have forgotten) not received a single dime from Boeing yet. Negotiations are ongoing and a large cash amount are expected.
If this is not enough, professional investors can see through all of this, and think 6 months ahead..

Everybody loves an optimist.

[SaulGoodman]

Lastly, I would like to point out that Norwegian has 18 max on the ground and (as the only company, something most Scandinavian analytics have forgotten) not received a single dime from Boeing yet.

Why do you think that is...

Norwegian is already on a “stop sales” with a lot of travel agencies. They don’t book them anymore in a package as they are responsible. Not a very good sign.

[Jumbo2]

Why do you think that is...

Norwegian is already on a “stop sales” with a lot of travel agencies. They don’t book them anymore in a package as they are responsible. Not a very good sign.

the quality news outlets (not U.K. tabloids) seem to agree:

https://mobile.reuters.com/article/amp/idUSKBN20W1Z4

[UAV689]

At least oil is down significantly, I would imagine norwegian are not hedged to a large amount, ironically this has saved a few carriers in the past, the big boys have spare cash to hedge, but end up hedging at a very high price.

[rotorwills]

At least oil is down significantly, I would imagine norwegian are not hedged to a large amount, ironically this has saved a few carriers in the past, the big boys have spare cash to hedge, but end up hedging at a very high price.


to be honest a drop in aviation fuel is welcomed but it's not if sufficient magnitude or even timing to help some airlines out of the mire.

[aerodestination]

anybody who can explain this from the reuters article? Why would this be the benchmark for potential problems in an airline. There is much more than only debt/earning ratios. What would be a problematic ratio and what is the ratio for Norwegian and flybe just before it went under.

A three-month shutdown would inflate Air France-KLM's net debt to 7.7 times earnings, Citi calculates, and swell Lufthansa's multiple to 12.4.

[ReturningVector]

to be honest a drop in aviation fuel is welcomed but it's not if sufficient magnitude or even timing to help some airlines out of the mire.


And even then, a lot of airlines hedge their fuel so it won’t make much of a difference.

[uncle-traveling-matt]

Everybody loves an optimist.

Do you understand Norwegian? There is a press conference announced tomorrow with the Prime Minister of Norway, and Minister for Finance. If not, I can inform you that you will find the red noses flying in and out of an airport near you, also after Covid19.

[marchino61]

And even then, a lot of airlines hedge their fuel so it won’t make much of a difference.

Due to hedging, the drop in price might even cost some airlines money - they have hedged (e.g. bought forward) fuel at prices higher than the current price that they no longer need.

They will have to close those futures contract out at a loss.

[krismiler]

The chairman of Finnair once said that given the choice of a low oil price or a strong economy, he'd take the strong economy.

[Airbubba]

Due to hedging, the drop in price might even cost some airlines money - they have hedged (e.g. bought forward) fuel at prices higher than the current price that they no longer need.

They will have to close those futures contract out at a loss.

Cathay and Delta both lost money on their hedges when oil prices dropped in recent years.

Delta even bought a refinery which it later sold at a loss:

https://www.forbes.com/sites/danielreed/2018/09/10/its-no-fun-but-delta-belatedly-is-facing-up-to-its-one-big-mistake-investing-in-an-oil-refinery/#37f79231c198

[Jetscream 32]

They’ve just stopped all flights to Italy (Norwegian)

[ManaAdaSystem]

Do you understand Norwegian? There is a press conference announced tomorrow with the Prime Minister of Norway, and Minister for Finance. If not, I can inform you that you will find the red noses flying in and out of an airport near you, also after Covid19.

What did they say?
Will they use state funding to keep them in the air?
If so, which part of Norwegian? Swedish, Norwegian, International, Irish (if that part still excists), Argentinian?

[dcoded]

News just out.

Norwegian to cancel 3000 flights and slash a “major part” of its workforce.

press release in the link below

https://media.uk.norwegian.com/pressreleases/norwegian-to-cancel-approximately-3000-flights-and-implement-temporary-layoffs-due-to-the-effects-of-covid-19-2980473

[Black Pudding]

News just out.

Norwegian to cancel 3000 flights and slash a “major part” of its workforce.

press release in the link below, in Swedish however.

https://media.se.norwegian.com/pressreleases/norwegian-staeller-in-cirka-3000-avgaangar-och-varslar-om-permittering-paa-grund-av-effekterna-av-covid-19-2980501

Is there a link to an English version

[dcoded]

Is there a link to an English version


updated my post with English press release

[ATC Watcher]

This represents approximately 15 percent of the total capacity for this period
So much less that Lufthansa , Qantas or Air France announced the last days for instance . I do not really see this as sign that the airline is in deep financial trouble, but rather something most European airlines are or will be doing .
That said I am not a financial expert and have no inside knowledge of Norwegian financial situation ...

[Porto Pete]

in other news: Wizzair financial position also far from rosy. Not a great time...

Do you have a source, I have not seen any evidence to suggest that is true?

[seventhreedriver]

Do you have a source, I have not seen any evidence to suggest that is true?
Looking at the cash balance (1billion EUR+), many companies would like to be in the same situation... A few perks will be trimmed (no fixed roster for the new joiners, floating pilots extra 1000EUR allowance gone, no more extra payment for random roster) to preserve this.

[BehindBlueEyes]

Hopefully, a bit of good news.

https://www.reuters.com/article/us-health-coronavirus-norway-airlines-idUSKBN20X1UQ

[NEDude]

The wheels are starting to come off for everyone right now. SAS is asking crews for an immediate 20% pay cut. Virgin crews are being hit with immediate redundancies. Norwegian looking at a 15% reduction in staff in the face of 3,000 cancellations between now and early May.

[dirk85]

No surprise unfortunately. Norwegian was into admission before covid. Even before covid. I would just be careful about “temporary” lay offs.

in other news: Wizzair financial position also far from rosy. Not a great time...

Their financial reports are readily available: they are one of the most profitable airline in Europe with huge cash reserves.

[Holer Moler]

NEDude - Where did you get this little gem from "Virgin crews are being hit with immediate redundancies."

[Riskybis]

NEDude - Where did you get this little gem from "Virgin crews are being hit with immediate redundancies."

haven’t had that notice yet , the hype people have is amazing

[NEDude]

NEDude - Where did you get this little gem from "Virgin crews are being hit with immediate redundancies."

A colleague who has friends at Virgin. I apologize if that information was shared in error, but he did seem pretty certain of it.

[Flying Wild]

https://cimg2.ibsrv.net/gimg/pprune.org-vbulletin/739x1600/c9d409e8_3a8a_49fb_a6c6_5462f757ee6d_b059d23b4b7de047c26f3b7 819ead85ddeae8e28.jpeg
Things going downhill at Norwegian?

[uncle-traveling-matt]

In light of the current virus, EU will relax its legislation on state aid. This was agreed on todays meeting. Not that France, Germany or Italy follow the rules anyways. Norway is not even a member. Anyways, let “The fund” flow.
www.nbim.no

[Icanseeclearly]

Not sure you can give state aid to an airline with its AOC in a different country, eg Norwegian Air International Limited in Dublin or Norwegian UK.

Can't see the competition commission being too happy with a Norwegian company flying irish registered aircraft from a UK base getting an unfair advantage - especially after Monach, Thomas cook and Flybe.

here’s hoping it’s not necessary.

[uncle-traveling-matt]

The fund is one of Norwegians biggest shareholders, and most of the aircrafts are being re-registered in Scandinavia anyways. New management, new times. We will see how this play out, this thread has been ongoing for a long time and plenty of airlines are unfortunately no more. The rednoses, keep flying though

[Meester proach]

Not sure you can give state aid to an airline with its AOC in a different country, eg Norwegian Air International Limited in Dublin or Norwegian UK.

Can't see the competition commission being too happy with a Norwegian company flying irish registered aircraft from a UK base getting an unfair advantage - especially after Monach, Thomas cook and Flybe.

here’s hoping it’s not necessary.
norwegian air uk is a UK AOC, flying G reg aircraft

[Icanseeclearly]

Norwegian registered rather than Irish registered does not change the problem.

Example - Norwegian operating LGW - TFS with state aid in direct competition with EasyJet also operating LGW - TFS without state aid, can’t see the UK government going along with that one, they let Flybe et al go under remember.

Norwegian flying out of Norway with state aid on a Norwegian AOC - not an issue but protectionism in the EU is rife and they will look after themselves

”norwegian air uk is a UK AOC, flying G reg aircraft” eligible for state aid from Norway without breaking competition rules?

[vikingivesterled]

If Norwegian get anyything from the Norwegian government that can be likened to state aid it will be well hidden and evenhanded.
It could be a general time limited reduction in airport and/or airspace fees, or a way to bypass union rules and faster make people redundant or onto unpaid leave and then immediately give these (ex) employees an increased dole (already done in both UK and Ireland I believe). Maybe some delayed tax for all industries like the fee employers pay for having employees.
They are not about to insert 100 million cash into Norwegian's coffers as a direct handout, because the queue for that line would be long from other travel industry entities like hotels and event organisers plus others that feel they should get some to.
And the Norwegian Wealth Fund to buy up more of the Norwegian's shares to increase the sharevalue would do nothing for the airline's finances, only for its shareholders.

[Ancient Mariner]

Norwegian government is said to come up with measures on Friday. Checking against EU and other international rules at present. Expect reduction in taxes and fees plus as mentioned in post above.
No direct infusion of cash, I believe.
Per
​​​​​​

[Rt Hon Jim Hacker MP]

Visited PIK today.

Six Norwegian 787’s parked up without engines fitted. All looked to be in a “stored” condition with taped up windows etc.

Quite a sad sight. Hopefully some good news will be forthcoming for the employees before too long.

[Longtimer]

Visited PIK today.

Six Norwegian 787’s parked up without engines fitted. All looked to be in a “stored” condition with taped up windows etc.

Quite a sad sight. Hopefully some good news will be forthcoming for the employees before too long.
do you have a link to the pictures?

[krismiler]

Michael O'Leary will doubtless have his hand out demanding a similar package for Ryanair.

The stored B787s are probably due to the engine issues, unfortunately it's a catch 22 situation. The downtime is available to attend to engineering programs but the money isn't and there's no immediate work for them anyway.

[Rt Hon Jim Hacker MP]

do you have a link to the pictures?

Afraid not.

[bringbackthe80s]

Keeping a wide body on the ground costs about 50k per day. Excluding crew, mantainance, fees and everything else. That’s a lot of relaxing from the government needed.

[Ollie Onion]

The transatlantic ban for 30 days just announced will surely hit Norwegian hard.

[atakacs]

The transatlantic ban for 30 days just announced will surely hit Norwegian hard.
Yep
Pretty much a death sentence baring state intervention.

[RexBanner]

Death sentence for all airlines with transatlantic ops (barring the same) I would imagine. This is way bigger than Norwegian now, we’re into 9/11 territory once again but with the potential to be much more protracted. A truly horrific apocalypse for airlines.

[Superpilot]

Trump's decision has effectively saved Boeing from having to pay billions if those airlines who are demanding it end up going bankrupt.

[RexBanner]

Boeing probably won’t do too well out of having it’s entire customer base (barring the US Military) destroyed though...

[calypso]

I very much doubt the bankruptcy administrators will walk away from pursuing Boeing for contract breaches.

[iggy]

Not trying to spread panic here: heard from a cc friend that operations will cease beginning of April. Any truth to this?

[marchino61]

The FT doesn't think there is any truth to that:
https://www.ft.com/content/23b1d2ee-635b-11ea-b3f3-fe4680ea68b5

However, it does think Norwegian's condition is critical. Here is an excerpt:
Norwegian’s net debt has increased steadily from NKr22bn ($2.3bn) in 2017 to NKr58bn at the end of last year — in large part due to accounting rule changes on leases — just as its equity market capitalisation has plunged to NKr1.8bn. Analysts at ABG Sundal Collier show that its net debt to ebitda (earnings before interest, tax, depreciation and amortisation) ratio is 7.1, compared with an average of 1.8 for European carriers — and just 0.5 for low-cost airlines such as Ryanair and easyJet. Norwegian, like almost all carriers, is taking drastic action. On Tuesday, it announced 3,000 flight cancellations — or about 15 per cent of its capacity between mid-March and mid-June — and warned staff in an internal note “to be prepared for a scenario where we reduce capacity by up to 50 per cent”. Few in the industry such as executives, analysts or investors know how big the knock will be. Analysts at ABG already worried last week that Norwegian could break the book equity covenant on its bonds in the second quarter of this year. They also forecast that its net cash of NKr3bn — compared with revenues of NKr43.5bn last year — could shrink to just NKr880m by the end of June. Mr Lobbenberg said that on his models of falls in unit revenues this year of 3-7 per cent, “Norwegian lives” in each scenario. But, he added: “If it’s materially larger, you do challenge those covenants”. Thus many speculate that Norwegian will need to tap shareholders for the fourth time since March 2018. ABG analysts estimated that Norwegian could have to raise up to NKr3bn, close to double its current market value, to avoid facing the same worries next year.

[WB627]

Trump's decision has effectively saved Boeing from having to pay billions if those airlines who are demanding it end up going bankrupt.

Think the receivers might disagree with that. They will go after every penny/cent owed to the airlines on behalf of the creditors.

[fruitbat]

Norwegian shares down 30% today...

[SSDK]

https://www.web24.news/u/2020/03/norwegian-government-comes-to-the-rescue-of-norwegian-airline-for-the-coronavirus.html?fbclid=IwAR2uFKI1KjDYXSlimYJfqcsgteCs2xIRQr oeumFCXHz92vo5t-mCdrEnH8I

Fingers Crossed. :bored:

[aerodestination]

https://www.web24.news/u/2020/03/norwegian-government-comes-to-the-rescue-of-norwegian-airline-for-the-coronavirus.html?fbclid=IwAR2uFKI1KjDYXSlimYJfqcsgteCs2xIRQr oeumFCXHz92vo5t-mCdrEnH8I

Fingers Crossed. :bored:

At this point, analysts calculate that if the situation of slowdown in activity continues and liquidity is not achieved through other means, such as public aid, it could run out of cash in June, which would jeopardize its survival

I'm suprised that they estimate that the current situation could last until june without any additional measures. I really do hope this whole crisis will resolve in a couple of weeks since Norwegian will not be the only one in trouble. The whole aviation industry is at risk at the moment and companies will eventually run out of cash.

[marchino61]

I'm suprised that they estimate that the current situation could last until june without any additional measures. I really do hope this whole crisis will resolve in a couple of weeks since Norwegian will not be the only one in trouble. The whole aviation industry is at risk at the moment and companies will eventually run out of cash.

It took a couple of months to bring it under control in China with Draconian measures, so why should it be any quicker in Europe and the USA?

[aerodestination]

It took a couple of months to bring it under control in China with Draconian measures, so why should it be any quicker in Europe and the USA?

I do not mean the corina crisis. I mean that Norwregian can sirvive until june in the current climate. That's over 2.5 months flying empty planes or grounded aircraft. I thought they had shorter to live judging other earlier posts.

[Speedbrakes Up]

https://www.web24.news/u/2020/03/norwegian-government-comes-to-the-rescue-of-norwegian-airline-for-the-coronavirus.html?fbclid=IwAR2uFKI1KjDYXSlimYJfqcsgteCs2xIRQr oeumFCXHz92vo5t-mCdrEnH8I

Fingers Crossed. :bored:

Sure, that is great news, they will come to the aid of the Norwegian AOC, surly they cannot come to the aid of the UK and Irish AOC, as they are technically a separate company.
Receiving aid would been seen as a breach of EU law, and no doubt cause an uprising from other European carriers left to struggle unaided.
It would also make flybe going under a complete and utter joke, as they were refused state help by the UK government.

[ATC Watcher]

no doubt cause an uprising from other European carriers left to struggle unaided.
Watching the news it does not looks like the other European carriers will be left unaided. Watch what will happen with Alitalia in the coming days ...:hmm:

[ManaAdaSystem]

Cutting 4000 flights and up to 50% of the staff on furlough.

[Meester proach]

Complete nightmare.

After the shoddy RR and Boeing products, excellent cost cutting during the lean months, company was poised to attack the lucrative summer season head on....

and now THIS..

[calypso]

I think every airline around the world is too busy asking for their own state aid to be complaining about Norwegian´s

[Airbubba]

Cutting 4000 flights and up to 50% of the staff on furlough.

Expect other carriers to follow. It's suddenly the down side of the cycle again.

[Airbubba]

Press release about the cutbacks and layoffs.

Norwegian to suspend more than 4000 flights and implement layoffs
Press release • Mar 12, 2020 16:36 GMT

Following the U.S. ban on travel from most of Europe and the escalating coronavirus situation, Norwegian has decided to ground 40 percent of its long-haul fleet and cancel up to 25 percent of its short-haul flights until the end of May. The changes apply to the company’s entire route network.

Jacob Schram, CEO of Norwegian said: “This is an unprecedented situation and our main priority continues to be the care and safety of our customers and colleagues. The new restrictions imposed further pressure on an already difficult situation. We urge international governments to act now to ensure that the aviation industry can protect jobs and continue to be a vital part of the global economic recovery.”

40 percent of long-haul capacity to be cancelled

From March 13th to March 29th, we will cancel the majority of our long-haul flights to the U.S. from Amsterdam, Madrid, Oslo, Stockholm, Barcelona and Paris.

From March 13th to the end of May, all flights between Rome and the U.S. will be cancelled.

From March 29th until the end of April, all flights from Paris, Barcelona, Madrid, Amsterdam, Athens and Oslo to the U.S. will be cancelled.

All routes between London Gatwick and the U.S. will continue to operate as normal. Our goal is to reroute as many of our customers as possible through London during this difficult period.

The short-haul network heavily impacted

Norwegian will also cancel a large share of its domestic flights in Norway and flights within Scandinavia, such as Oslo-Copenhagen and Oslo-Stockholm. Flights to Italy will also be cancelled. Domestic and intra-Scandinavian flights will be combined to re-protect our customers.

Customers booked to travel on affected flights will be contacted to discuss their options including rebooking onto a flight at a later date. Due to a high number of enquires we encourage all customers to check our website www.norwegian.com/updates for the latest travel advice. If your travels are past April 15th, 2020, please refrain from contacting our Customer Care team at this time.

Layoffs

During a pandemic it is Norwegian’s policy to prioritize and safeguard the health and well-being of employees while ensuring Norwegian's ability to maintain essential operations and continue providing services to our customers.

Due to the extraordinary market situation as a result of the coronavirus, and thus a dramatic drop in customers and subsequent production decline, we must look at all possible measures to reduce costs. This unfortunately also includes temporary layoffs of up to 50 percent of our employees and the number may increase. All departments will be affected by the temporary layoffs.

We have initiated, in consultation with the unions, a discussion and mapping process and will then return with leave notices to affected departments, stations and employees.

Norwegian in the UK and Ireland:

Norwegian carries almost 6 million UK passengers each year from London Gatwick, Edinburgh and Manchester Airports to 30 destinations worldwide

Norwegian is the third largest airline at London Gatwick, with 4.6 million yearly passengers, and over 1,200 UK-based pilots and cabin crew

In 2014, Norwegian introduced the UK’s first low-cost, long haul flights to the U.S. - the airline now flies to 11 U.S destinations, Buenos Aires and Rio de Janeiro from London Gatwick

Norwegian is the only airline to offer free inflight WiFi on UK flights to more than 30 European destinations and 13 long-haul destinations.

The airline has one of the youngest aircraft fleets in the world with an average age of 4.6 years, including next-generation Boeing 787 Dreamliner, Boeing 737 MAX and Boeing 737-800s

Norwegian has been voted ‘Europe’s best low-cost carrier’ by passengers for six consecutive years at SkyTrax World Airline Awards from 2013-2018, along with being awarded the ‘World's best low-cost long-haul airline’ in 2015, 2016, 2017, 2018 and 2019

Norwegian Reward is the airline's free to join award-winning loyalty programme offering members CashPoints and Rewards that reduce the cost of Norwegian flights

[SaulGoodman]

What do they mean with “their workforce”? Is it 50% of the direct employed or are contractors also in this figure?

[ObadiahDogberry]

What do they mean with “their workforce”? Is it 50% of the direct employed or are contractors also in this figure?

Nobody knows at this point. No specifics have been provided.

[uncle-traveling-matt]

What do they mean with “their workforce”? Is it 50% of the direct employed or are contractors also in this figure?


All employees are employed locally, and enjoy local terms and conditions according to the country where they are based. I made more money in my last year as a FO, than some of BA’s first-second-third year captains.
Cut the yankee propaganda, its getting very tiredsome.
Thanks for the support in here and to all the haters :Norwegian will prevail, more news to follow later today.

[deathray]

I worked for Norwegian and was one of the crew terminated due to the demise of the Max . The process was handled decently and the folks in NAI are a great bunch of people . I hope Norwegian pull through this crisis . Its grim times for everyone in this industry with the possible exception of the Freight Dogs .

[Max Tow]

From the press release above in respect of EU/U.S. cancellations:
"Our goal is to reroute as many of our customers as possible through London"

Hopefully this just means U.S. citizens otherwise it's a 2 week transit in London?

[Meester proach]

From the press release above in respect of EU/U.S. cancellations:
"Our goal is to reroute as many of our customers as possible through London"

Hopefully this just means U.S. citizens otherwise it's a 2 week transit in London?

Yes, they don’t mean those from banned countries

[ManaAdaSystem]

All employees are employed locally, and enjoy local terms and conditions according to the country where they are based. I made more money in my last year as a FO, than some of BA’s first-second-third year captains.
Cut the yankee propaganda, its getting very tiredsome.
Thanks for the support in here and to all the haters :Norwegian will prevail, more news to follow later today.

Everybody loves an optimist, but the package today will not keep them in the air.
CEO says it will be a matter of weeks before the airline fails unless the Norwegian government extends them a huge credit.
The way they set up this company, mainly to avoid taxes to the very country they now turn to for help, may be a big obstacle.

[golfyankeesierra]

Everybody loves an optimist, but the package today will not keep them in the air.
CEO says it will be a matter of weeks before the airline fails unless the Norwegian government extends them a huge credit.
The way they set up this company, mainly to avoid taxes to the very country they now turn to for help, may be a big obstacle.

It sure is hypocritical to turn to Norwegian government for help.
From Wikipedia (https://en.wikipedia.org/wiki/Norwegian_Air_Shuttle)


Labour relations

Between 2011 and 2013, Norwegian Air Shuttle (NAS) received criticism regarding its treatment of employees.

The media first reported NAS's announced intention to open a base in Helsinki, from where it hired pilots on short-term contracts in Estonia rather than as employees within the company. The Norwegian tax-office authorities reportedly suspected in August 2012 that many Norwegian citizens were working for NAS on these contracts and not paying Norwegian taxes, despite operating on flights originating from Norway.] (https://en.wikipedia.org/wiki/Norwegian_Air_Shuttle#cite_note-85)The Norwegian Pilot's Union (NPU) brought NAS to court over the short-term contracts. Then-CEO Bjørn Kjos appeared to inflame matters when he declared that NAS would no longer hire employees on Norwegian terms.

In 2012, NAS started to use contract-employed pilots on routes within Scandinavia, considered by the NPU to be an abrogation of labor terms regarding non-Scandinavian pilots on routes within Scandinavia. The NPU soon after sued NAS.

In October 2013, the NPU announced its intention to strike because NAS had forced its pilots to face dismissal or transfer to Norwegian Air Norw (https://en.wikipedia.org/wiki/Norwegian_Air_Norway)ay or Norwegian Air Resources AB, both subsidiaries of NAS; the respective subsidiary would then hire the pilots back to NAS. The NPU and its Swedish counterpart SPF accused NAS of using this ploy to break the solidarity and organisation of the pilots, with the eventual goal of coercing pilots to convert their jobs to contract positions.

In mid-December 2013, NAS demanded that its Swedish non-contract flight attendants transfer to Proffice Aviation, an external staffing company, or face dismissal. According to the Swedish cabin-crew union, Unionen, it managed to save the jobs of 53 NAS employees, but it was dissatisfied with the direction NAS had taken. The situation led to the leader for the Swedish Left Party (https://en.wikipedia.org/wiki/Left_Party_(Sweden)), Jonas Sjöstedt (https://en.wikipedia.org/wiki/Jonas_Sj%C3%B6stedt), to state that stricter regulation was needed for the use of staffing-companies in Sweden.

[Lionel Lion]

Not a bail out. Increases liquidity in the short term to continue to operate in these circumstances. every company will likely need this

[RTO]

It sure is hypocritical to turn to Norwegian government for help.
From Wikipedia (https://en.wikipedia.org/wiki/Norwegian_Air_Shuttle)
Not really as the fragmentation and union busting tactics was the work of the old management. The new CEO seems to be more of a Kelleher kind of guy that seeks to reverse most of these wrongdoings.

[beardy]

Not a bail out. Increases liquidity in the short term to continue to operate in these circumstances. every company will likely need this
The 'liquidity' much vaunted by senior management is best viewed as a flow of money, like a stream, coming in from clients and going out to suppliers with the difference pooling in the pockets of investors in the form of dividends and increased share value. Time to release the cash from the investors is now, if they really believe in their investments then now is the time for them to step up and back them properly rather than just harvesting profit.

[uncle-traveling-matt]

Can we get the thread back on track, please. Yes, I realize that most people who were rejoicing of the (perceived) thought of Norwegians demise, are probably in deep poo themselves right now, but just sharing great news from Norway.

Norway will offer companies at least 100 billion Norwegian crowns ($9.7 billion) in funding in the form of guarantees for loans and bond issues to support the economy during the coronavirus outbreak, the government said on Sunday.

“The government will do what’s needed and spend the necessary funds to secure the Norwegian economy and support Norwegian businesses, big and small,” Prime Minister Erna Solberg told a news conference.

The Nordic country invoked emergency powers on Thursday to close a wide range of public and private institutions, including schools and restaurants, in a bid to combat the spread of coronavirus.

The business support package was divided into loan guarantees of 50 billion crowns to small and medium sized companies seeking bank loans, and the same amount in the form of government guarantees to large firms issuing corporate bonds.

In addition, payments of payroll taxes will be postponed, the government added.

Further measures for industries that have been particularly hard hit will also be presented at a later time, Finance Minister Jan Tore Sanner said.

[Halfwayback]

Let's stick to the topic which is Norwegian Airlines!

[Speedbrakes Up]

Great news from Norway, I hope other governments react rather quickly in the same way.

Nice to see the Norwegian bases in Norway will be protected.

[sarah737]

“The government will do what’s needed and spend the necessary funds to secure the Norwegian economy and support Norwegian businesses, big and small,” Prime Minister Erna Solberg told a news conference.



She also added that, despite state aid, some bankruptcies are probably unavoidable.

[ManaAdaSystem]

7300 staff on furlough, 85% of flights grounded.

[Airbubba]

'However, I want to emphasize that this is temporary...'

Norwegian to cancel 85 percent of its flights and temporarily layoff approximately 7,300 colleaguesPress release (https://media.uk.norwegian.com/pressreleases) • Mar 16, 2020 13:21 GMT

The COVID-19 situation is escalating by the hour and due to stagnating demand and enforced travel restrictions by authorities worldwide, Norwegian will gradually cancel most of its flights and temporarily lay off a major share of its workforce. “What our industry is now facing is unprecedented and critical as we are approaching a scenario where most of our airplanes will be temporarily grounded. Several governments in Europe have already said that they will do everything they can to ensure that their airlines can continue to fly when society returns to normalcy. We appreciate that the authorities of Norway have communicated that they will implement all necessary measures to protect aviation in Norway, consequently securing crucial infrastructure and jobs,” said CEO Jacob Schram of Norwegian.

Norwegian has already discontinued a significant number of its flights and the main priority this week is to maintain as many scheduled flights as possible to ensure that customers are able to immediately return to their home destinations. The company will also work closely with the authorities to arrange flights for the benefit of stranded passengers, if necessary. Customers who are directly affected by route changes and cancellations will be contacted by Norwegian via text message or e-mail.

“We understand that this extraordinary situation is stressful for our customers, but I want to assure everyone that we are working around the clock to ensure that everyone is taken care of in the best way possible at this time,” said Schram.

As a result of most of the company’s planes being parked, Norwegian unfortunately has to temporarily lay off more than 7,300 colleagues in total which equates to approximately 90 per cent of its workforce, which includes pilots, cabin crew, maintenance and administrative staff. The layoff procedures vary from country to country and Norwegian’s team is already in constructive dialogues with union and HSE representatives at all its locations across the network.

“It is indeed with a heavy heart we have to temporarily lay off more than 7,300 of our colleagues, but we unfortunately have no choice. However, I want to emphasize that this is temporary, because when the world returns to normalcy my goal is to keep as many of our dedicated colleagues as possible,” said Schram.

[uncle-traveling-matt]

Terms apply yes, but this comes after several meetings between government officials, and Norwegians management. They wouldn't come up with these specific terms, if they knew Norwegian couldn't abide with them. This will cover them until june, if they need more money, they will get more. CEO looked very confident in his press conference after the governments announcement , and said "Norwegian will emerge from this, stronger than ever"
Im sure a restructured Norwegian will rise from the ashes of this corona nightmare.

[tprop]

Financial newspapers in Norway beg to differ. They think it unlikely Norwegian will be able to fulfill the requirements for the aid package.
Circuit breaker just popped on NAS on the stock exchange.

[ObadiahDogberry]

Same thing happened a few years ago when IAG bought some stock in Norwegian. Trading was suspended for a period.

[uncle-traveling-matt]

Financial newspapers in Norway beg to differ. They think it unlikely Norwegian will be able to fulfill the requirements for the aid package.
Circuit breaker just popped on NAS on the stock exchange.

Because the Norwegian stock rose 28 percent and trade was stopped for 45 min. It ended at bit down for the day however the ONE newspaper you are referring to recently had an editoral pleading the Norwegian government not to support NAS, talk about being biased.

[aircowboy]

https://www.bloomberg.com/news/articles/2020-03-20/norwegian-air-s-270-million-state-rescue-comes-with-strings

Maybe not only ONE newspaper

[Ancient Mariner]

Because the Norwegian stock rose 28 percent and trade was stopped for 45 min. It ended at bit down for the day however the ONE newspaper you are referring to recently had an editoral pleading the Norwegian government not to support NAS, talk about being biased.
Why not read the government's requirements for support to NAS? Then you don't have to rely on the media.

[uncle-traveling-matt]

https://www.bloomberg.com/news/articles/2020-03-20/norwegian-air-s-270-million-state-rescue-comes-with-strings

Maybe not only ONE newspaper

No, but certainly quoting the same analyst.

[dcoded]

What's going on in Fornebu HQ? :sad:

[Reluctant Bus Driver]

It would appear that essentially every airline on the planet will receive some sort of state aid as unpalatable for tax payers as that may be. The old privatized profits socialized losses argument..
Not sure if it has been covered but why would the Norwegian government agree, if indeed they have, to bail out Norwegian Air International that is based in Ireland with likely few if any Norwegian staff? I'm only guessing, but structurally there is probably not much daylight between Norwegian Air Shuttle and Norwegian Air International. The same goes for SAS. Are they really sending Swedish/ Danish tax money to SAS SAIL? An airline set up solely to get out from under tough Scandinavian labor laws. If true we have truly entered a surreal universe and if I were a tax payer in those countries I would surely raise holy hell..

[c52]

I agree.

If a company is registered for tax purposes in the Cayman Islands, let it appeal to that government for funds.

(not that I am suggesting Norwegian is)

[november.sierra]

Norwegian is NOT an Irish company so about time someone put a stop to the persistent rumour that Norwegian has its head office in Dublin and flies in Europe with Thai crews employed on the cheap! The Norwegian group is headquartered in Norway and operates on Norwegian, Swedish, Irish and British AOC's with offices in each of these countries, and employs crews locally, that's it! No different from easyJet, Ryanair, the Lufthansa group etc...

Things that went wrong in the past were down to the previous regime which was unceremoniously booted out by some of the larger financial institutions investing in Norwegian, and yes, the previous regime did have delusions of grandeur of turning the aviation industry into a copy of the shipping industry concerning crewing, but this has been firmly laid to rest. The new regime is intent on making these things right and will do so given half a chance.

[Icanseeclearly]

November Sierra.

you raise some interesting points regarding airlines Europe wide.

As you say Norwegian are HQd in Norway but have AOCs in various countries.

Should the UK government give state aid to a Norwegian company just because they have an AOC in the Uk? To see the money flow out of the UK.

The same can be said for the majority of airline groups within Europe, can of worms all around.

[Paul737]

Denying Norwegian Air Shuttle opened an Irish AOC to get rid of the norwegian labour law is deny what is obvious. Even the Scandinavian passengers know that.

Why are so many aircraft registered on EI and not having all of them on LN?

Then you cannot pretend norwegian tax payers to save your company. What would be logic is to save NAS and NSE. Nothing else

What interest should Norway have in routes like Malaga-Munich, Gran Canaria-Madrid or Alicante-Hamburg?

[vikingivesterled]

Things that went wrong in the past were down to the previous regime which was unceremoniously booted out by some of the larger financial institutions investing in Norwegian, and yes, the previous regime did have delusions of grandeur of turning the aviation industry into a copy of the shipping industry concerning crewing, but this has been firmly laid to rest. The new regime is intent on making these things right and will do so given half a chance.

There is a paywalled article on e24.no today that according to its headline speculates in that the old regime could be making a comeback. They do after all still own nearly 10%.

[NEDude]

Denying Norwegian Air Shuttle opened an Irish AOC to get rid of the norwegian labour law is deny what is obvious. Even the Scandinavian passengers know that.

Why are so many aircraft registered on EI and not having all of them on LN?

Then you cannot pretend norwegian tax payers to save your company. What would be logic is to save NAS and NSE. Nothing else

What interest should Norway have in routes like Malaga-Munich, Gran Canaria-Madrid or Alicante-Hamburg?

It was not labor law they were trying to get around. The labor laws within the EU are quite complex, and the applicable laws are based on where the employee is based, not the location of the AOC. For example NAI crews based in LGW are employed under UK labor laws, not Irish labor laws. NAI crews based in MAD are employed under Spanish labor laws, not Irish. NAS crews based in CPH are employed under Danish law, not Norwegian. Same with the SAS Ireland crews based in LHR, they are employed under UK labor laws, not Irish. So the location of the AOC does not do much, if anything, to the labor laws.

NAI existed for three very specific reasons, and labor was not one of them. 1) Ireland has a very favorable environment for aircraft leases and corporate taxes. 2) It was an EU country that was a member of the Cape Town Treaty. 3) While having an EU AOC made no difference with regards to traffic right within Europe, or to the United States, as Norway was covered under those applicable treaties, having an AOC based within the EU did potentially open other traffic rights that Norway might not have been covered by, and Norwegian had the right to open other AOCs in EU countries due to being a member of the EEA. At the time NAI was formed, neither Denmark or Sweden had ascended to the Cape Town treaty, which would have made aircraft leases significantly more expensive, which is why Norwegian did not open AOCs in those countries despite the precedent for that having been set years ago by SAS. Since Sweden has ascended to the Cape Town treaty, Norwegian has opened the Swedish AOC and begun to move more aircraft to that AOC and away from NAI.

(Edit - While the European Union did ascend to the Aircraft Protocol of the Cape Town Treaty in 2009, there has been some debate about the applicability to EU members who have not individually ratify the treaty. Most EU countries have not individually ratified the treaty. Ireland was one of the original countries to ratify the Aircraft Protocol, even before the EU ascended to the treaty. At the time the NAI AOC was issued in 2014, the only EU countries to have ratified the treaty were Ireland, Luxembourg and the Netherlands. Since then, Denmark, Sweden, and Spain have ratified the treaty. The UK also ratified the treaty, but as we are all well aware, has also since left the EU. None of the other EU countries have individually ratified the treaty to date.)

[Paul737]

Nice speech. And basically you are answering: “Ireland has a very favorable environment for aircraft leases and corporate taxes” 👍👍👍. Then again:

Why Norway should save Norwegian if they have been avoiding taxes in Norway?

What interest have Norway in routes like Barcelona - Tel Aviv, Gran Canaria - Madrid or Alicante - Hamburg? That could be called unfair conpetition if helped by the government.

What would you think if Vueling starts operating between Oslo and Stockholm, selling tickets at a very low price causing loses and then waiting for the Spanish government help to continue doing the same?

[ManaAdaSystem]

It was not labor law they were trying to get around. The labor laws within the EU are quite complex, and the applicable laws are based on where the employee is based, not the location of the AOC. For example NAI crews based in LGW are employed under UK labor laws, not Irish labor laws. NAI crews based in MAD are employed under Spanish labor laws, not Irish. NAS crews based in CPH are employed under Danish law, not Norwegian. Same with the SAS Ireland crews based in LHR, they are employed under UK labor laws, not Irish. So the location of the AOC does not do much, if anything, to the labor laws.

NAI existed for three very specific reasons, and labor was not one of them. 1) Ireland has a very favorable environment for aircraft leases and corporate taxes. 2) It was an EU country that was a member of the Cape Town Treaty. 3) While having an EU AOC made no difference with regards to traffic right within Europe, or to the United States, as Norway was covered under those applicable treaties, having an AOC based within the EU did potentially open other traffic rights that Norway might not have been covered by, and Norwegian had the right to open other AOCs in EU countries due to being a member of the EEA. At the time NAI was formed, neither Denmark or Sweden had ascended to the Cape Town treaty, which would have made aircraft leases significantly more expensive, which is why Norwegian did not open AOCs in those countries despite the precedent for that having been set years ago by SAS. Since Sweden has ascended to the Cape Town treaty, Norwegian has opened the Swedish AOC and begun to move more aircraft to that AOC and away from NAI.

(Edit - While the European Union did ascend to the Aircraft Protocol of the Cape Town Treaty in 2009, there has been some debate about the applicability to EU members who have not individually ratify the treaty. Most EU countries have not individually ratified the treaty. Ireland was one of the original countries to ratify the Aircraft Protocol, even before the EU ascended to the treaty. At the time the NAI AOC was issued in 2014, the only EU countries to have ratified the treaty were Ireland, Luxembourg and the Netherlands. Since then, Denmark, Sweden, and Spain have ratified the treaty. The UK also ratified the treaty, but as we are all well aware, has also since left the EU. None of the other EU countries have individually ratified the treaty to date.)


Labor COST is way higher in Scandinavia, and that was one of the reasons Kjos said he would never hire a Norwegian employee again. One of the main reasons why he created all these companies.The employees of these companies have paid no taxes to Norway.
The Norwegian Government wants to protect aviation in Norway, why should they pay for Thai staff, UK staff, Spanish staff, American staff, French staff, etc, and flights outside Norway? The best reason the new CEO came up with was: We fly the word "Norwegian" all over the world.
The same goes for the SAS Irland part, but that company is still a very small part of SAS.
You can also add union busting into this picture.

[NEDude]

Labor COST is way higher in Scandinavia, and that was one of the reasons Kjos said he would never hire a Norwegian employee again. One of the main reasons why he created all these companies.The employees of these companies have paid no taxes to Norway.
The Norwegian Government wants to protect aviation in Norway, why should they pay for Thai staff, UK staff, Spanish staff, American staff, French staff, etc, and flights outside Norway? The best reason the new CEO came up with was: We fly the word "Norwegian" all over the world.
The same goes for the SAS Irland part, but that company is still a very small part of SAS.
You can also add union busting into this picture.

The CPH LH pilot's are the lowest cost long haul pilots in the company, even lower cost than the BCN and FCO pilots.

The question as to why the Norwegian government should pay money is moot, as they have already decided to fund up to 3 Billion NOK. You can speculate as to why, or the logic behind it, but the decision has been made, and it was made in the affirmative.

Every Norwegian base is unionized, so the union busting wasn't too successful was it?

What's funny is you guys are speculating so much about NAI being about labor costs, with zero hard evidence to back it up, but are ignoring the incredibly obvious and verifiable reasons why a company would want to have a division in Ireland. There is a reason why Ireland was called the "Celtic Tiger", there is a reason why so many corporations base their companies in Ireland, and labor costs have little to nothing to do with it. Facebook, Google, PayPal, Microsoft, and more than 700 other international companies base their European operations in Ireland, and the reason is overwhelmingly for its corporate tax rates. This is glaringly obvious, totally legitimate, and widely practiced, yet you conspiracy theorists totally ignore that in favor of a theory that does not hold up under even mild scrutiny. The AOC being based in Ireland does not do a bit of good at allowing Norwegian to work around labor laws for its UK based employees, or its Copenhagen based employees, or its Paris based employees. But it does a world of good at reducing corporate taxes, getting lower lease rates, and opening up some potential routes.

On top of that NAI is dying, and was dying long before Kjos left the building.

[ManaAdaSystem]

Those 3 billion NOK come with a lot of strings attached. I'm pretty sure there is a clause or two about how they can spend it. That is, if they can meet all the requirements in the first place.

[NEDude]

Those 3 billion NOK come with a lot of strings attached. I'm pretty sure there is a clause or two about how they can spend it. That is, if they can meet all the requirements in the first place.

They met the first hurdle, and many thought they would not be able to that.

[ManaAdaSystem]

10% of the money...

[NEDude]

10% of the money...

True, but a 10% that many analysts claimed they would not be able to get. Of course many of these same analysts have been swinging and missing on their predictions of imminent demise for the past five years.

[Brenoch]

They’re 60 BNOK in debt
Govt support at best 3 BNOK, with a fair few hoops to skip through. I’m not a wizard with numbers but I can not, for the life of me, see It happening. This is a dead horse that’s been flogged for far too long.

[NEDude]

They’re 60 BNOK in debt
Govt support at best 3 BNOK, with a fair few hoops to skip through. I’m not a wizard with numbers but I can not, for the life of me, see It happening. This is a dead horse that’s been flogged for far too long.

The "experts" have been saying that for five years. Seriously, CAPA reported that Norwegian was in an unsustainable position in February 2015. Yet Norwegian is still here. Obviously there is something going on behind the scenes that the "experts" are not fully aware of. Yet none of them have acknowledged that. I fully agree that things don't look good for them. But clearly there is a lot more to the financial dealings of Norwegian than many are aware of.

[Paul737]

The "experts" have been saying that for five years. Seriously, CAPA reported that Norwegian was in an unsustainable position in February 2015. Yet Norwegian is still here. Obviously there is something going on behind the scenes that the "experts" are not fully aware of. Yet none of them have acknowledged that yet. I fully agree that things don't look good for them. But clearly there is a lot more to the financial dealing of Norwegian than many are aware of.

You really don't know what is behind the scenes? Scandinavian governments (specially Denmark and Sweden) are tired of injecting money into this company through different shareholders. Is it necessary to remind you that they have made three capital increases in the last half year and? Guess the reason why Denmark and Sweden changed the law about government aid for airlines.

And the most ridiculous and pathetic thing is the campaign they are trying to carry out now claiming it is not fair they only collect money from the Norwegian government under strict conditions. Pathetic!

[SaulGoodman]

NEDude, maybe, but if my government would choose to invest in a unhealthy company using mostly foreign contractors I would be quite pissed off...
Long before corona they were losing money and increasing debts.

[FRogge]

They were expecting to be profitable this year (before covid19) and that would have been with MAXes still grounded and substantial part of the 787s as well. Their cost saving program Focus2019 worked very well. So when these hurdles with grounded aircrafts and over ambitious leaders are in the past, it will be a strong company.

These are their arguments why creditors should still have faith in them. We will know during coming weeks/months if they had.

[uncle-traveling-matt]

NEDude, maybe, but if my government would choose to invest in a unhealthy company using mostly foreign contractors I would be quite pissed off...
Long before corona they were losing money and increasing debts.

Yes, let us all hope for the demise of Norwegian😂

[Paul737]

They were expecting to be profitable this year (before covid19) and that would have been with MAXes still grounded and substantial part of the 787s as well. Their cost saving program Focus2019 worked very well. So when these hurdles with grounded aircrafts and over ambitious leaders are in the past, it will be a strong company.

These are their arguments why creditors should still have faith in them. We will know during coming weeks/months if they had.

That is simply not true. At the beginning of the year they said in 2020 they were expecting to have 0 losses. Then suddenly they claimed they were heading to the best summer season ever, but showed no proof of that.

Keep dreaming! Strong company having that huge debt and very little profit margin...

[SaulGoodman]

Yes, let us all hope for the demise of Norwegian😂

BS! Don’t putt words in my mouth...

Parked 787’s, Max issues and huge debts are not indicators of a very stable and profitable airline. But if the investors see a future in them I wish them all the best. I just do not see a huge government bail out arising. I hope I am wrong. 1000’s of jobless pilots on the market is not good for anyone.

[Altostratus]

This is very revealing....

https://www.newsinenglish.no/2020/03/25/drama-flies-around-norwegian-air/#.XoCBvaE3E2o.email

[uncle-traveling-matt]

...only because of clever accounting and financing involving a bank, which they had a massive share in up until recently.

...and the money arrived from the bank with a black helicopter, and landed on the lawn in front of the HQ in Fornebu.

[PeterWeb]

...and the money arrived from the bank with a black helicopter, and landed on the lawn in front of the HQ in Fornebu.

Nothing like a global crisis to bring all the chickenshelicopters home.

I, also, hope that most airlines survive this. But it will need a moon-shot both medically and economically to keep this downturn short and sharp because we lost so much time in the early stages.

[dcoded]

Guys, there is an eerie peace and tranquility regarding the situation in Norwegian.
I would expect some kind of press release or statement, but come Friday and dead silence from the HQ.

[Paul737]

Guys, there is an eerie peace and tranquility regarding the situation in Norwegian.
I would expect some kind of press release or statement, but come Friday and dead silence from the HQ.

The calm before the storm.

And I don’t if this is good or bad: On 23 March 2020, DP Aircraft I (DPA) announced that lease payments due on the 13th of March 2020, from Torskefjorden Leasing Limited (part of the Norwegian group and guaranteed by Norwegian) had not yet been made in respect of either of the two aircraft (LN-LNA and LN-LNB) DPA leases to Norwegian. Further to this announcement, DPA has now announced that DPA is suspending its dividend payments with immediate effect and until further notice.

DPA says that, while discussions are continuing with both Norwegian Air and Norddeutsche Landesbank Girozentrale (on behalf of the lending banks providing debt financing in respect of the two aircraft), the ongoing and open-ended nature of the Covid-19 crisis means that they are unlikely to be concluded in short order. The board is of the view that it is prudent at this time to suspend the payment of dividends and this will give DPA the best possible negotiating position in its discussions with its lenders. The Board says that its priority lies in preserving the long-term financial stability of DPA; and maintaining an appropriate level of liquidity is key to this.


What is true is they are running out of time

[RoyHudd]

Expect the lights to be switched off very soon. There will then be a lot of 787's (and 787 jobs) on the market, both likely going cheap. Very sad times for the nice people at Norwegian.

[dcoded]

Expect the lights to be switched off very soon. There will then be a lot of 787's (and 787 jobs) on the market, both likely going cheap. Very sad times for the nice people at Norwegian.

And what do you base that on?
We can all pretty much see the writing on the wall.
Just would be interesting to see what you have to back it up with?

[uncle-traveling-matt]

The calm before the storm.

And I don’t if this is good or bad: On 23 March 2020, DP Aircraft I (DPA) announced that lease payments due on the 13th of March 2020, from Torskefjorden Leasing Limited (part of the Norwegian group and guaranteed by Norwegian) had not yet been made in respect of either of the two aircraft (LN-LNA and LN-LNB) DPA leases to Norwegian. Further to this announcement, DPA has now announced that DPA is suspending its dividend payments with immediate effect and until further notice.

DPA says that, while discussions are continuing with both Norwegian Air and Norddeutsche Landesbank Girozentrale (on behalf of the lending banks providing debt financing in respect of the two aircraft), the ongoing and open-ended nature of the Covid-19 crisis means that they are unlikely to be concluded in short order. The board is of the view that it is prudent at this time to suspend the payment of dividends and this will give DPA the best possible negotiating position in its discussions with its lenders. The Board says that its priority lies in preserving the long-term financial stability of DPA; and maintaining an appropriate level of liquidity is key to this.


What is true is they are running out of time

No, it means you are not playing with a full deck.

Anyways, here is a hint from the Financial times UK :

"As many as half of global airlines are seeking rent relief now, according to a note from JPMorgan Chase analysts Jamie Baker and Mark Streeter. They estimate as much as 15 per cent of revenue could disappear this year either with lessors’ blessings, or because airlines default."

"Airlines and lessors are trying to work together because when the crisis lifts, airlines will still need planes, and lessors will still need a return on their assets, Mr Khoo said. Lessors “want their customers to survive, so they’re going to be accommodating”."

[procede]

Much like in the real estate business, more important than missing out on payments is the fear of having to reduce the book value of their assets.

[ObadiahDogberry]

The fact that it is LNA and LNB (aka LNBroken) that are not being paid for is not a coincidence. Norwegian management has stated that it is their desire to get rid of the -8 models, and those are the two oldest in the fleet, with LNB having been an almost constant headache since entering service.

[fruitbat]

https://www.flightglobal.com/strategy/hsbc-expects-european-airline-consolidation-amid-covid-19-crisis/137774.article

“HSBC believes all of the airlines it covers bar Norwegian will survive”

[NEDude]

From what it seems like, the people within the Norwegian government who are willing to offer some help for Norwegian, want to do so on the condition that it consolidates its operations to the Scandinavia short-haul markets, with possibly some limited long haul operations to the States or popular holiday areas. The problem with this is that Norwegian is so laden with debt that a smaller airline has zero chance to earn the revenue to ever pay off the debt. Of course as we have seen, even a larger airline will struggle with ever paying it off such massive debt. So management is stuck between a rock and a hard place. IMHO I think we will see Norwegian go bankrupt, and a new Norwegian will emerge with significantly smaller operations.

[calypso]

I very much doubt that sub-chartering wide body jets to fly punters from Gatwick to LA for 200 quid while parking brand new 787s for ever waiting for new engines is "The real money maker". Taking punters on holiday to Malaga in 737-800s on the other hand might make a few bob.

[Sick]

A key question is which can hold on longer, Norwegian or Virgin. A huge amount of capacity at Gatwick is at jeopardy, TCG gone and will BA return to Gatwick at its former strength? Assuming either Norwegian or Virgin will fold, the survivor when travellers return will likely reap rich rewards.

[ObadiahDogberry]

calypso, good point, but the size of the route network and loads suggest that Norwegian's "UK" operation out of Gatwick is/was way bigger than that of Scandinavia. In fact, even the Italian/Spanish operation would be comparable to the Scandi one.

NUK cabin crew were told at their last base meeting that only Miami was a reliable money maker for NUK. All of the other destinations break even at best. The believe has been that London was the best hope for a sizable and profitable operation, and that management felt like they were close to getting there. But the reality is that only one destination had shown itself to be consistently profitable.

Don't know of the validity of management's statements, but that is the message they presented to NUK cabin crew just a few months ago.

[uncle-traveling-matt]

https://www.flightglobal.com/strategy/hsbc-expects-european-airline-consolidation-amid-covid-19-crisis/137774.article

“HSBC believes all of the airlines it covers bar Norwegian will survive”

HSBC can “think” and “believe” all they want. Norwegian state is now the biggest shareholder in the company. Hard conditions have been put forth by the Government , not so much towards Norwegian, but directly aimed at its creditors and leasing companies. Participate in the restructuring of debt, and postpone leasing payments. Or end up with massive losses and aircraft which no one want at the moment. Norwegian could actually emerge from this crisis a lot stronger. Possibly with it's business trimmed down yes, but even more competitive than before.
”New Norwegian”, here we go

[calypso]

I agree. HSBC writes for investors which might indeed get wiped out, therefore their piece has some logic. Norwegian will survive simply because driving 1500km across Norway in the winter is not an option and Norwegians want to be able to go catch some sun in Malaga every now and then. On top of that who wants their basic infrastructure in the hands of Ryanair? Norway needs Norwegian; they can afford to save it so they will even If they have to nationalise it. The LH structure from European capitals to the US I am not so sure. Given time, money and a permanent fix to the RR engine issue it could become quite profitable but I fear that right now none of those are available.

[ara01jbb]

SVT (Sveriges Television) reporting that Norwegian has called for an Extraordinary General Meeting to discuss a proposal to negotiate its debts into shares in the company. Source here, 16:04 8/4/20. (https://www.svt.se/nyheter/utrikes/senaste-nytt-om-coronaviruset)

Good luck with that. :rolleyes:

[ReallyAnnoyed]

The Norwegian state is not the largest shareholder. It is the third largest, sitting at 4.15% of the shares. Hardly a massive amount.

https://www.marketscreener.com/NORWEGIAN-AIR-SHUTTLE-ASA-1413204/company/

[uncle-traveling-matt]

The Norwegian state is not the largest shareholder. It is the third largest, sitting at 4.15% of the shares. Hardly a massive amount.

https://www.marketscreener.com/NORWEGIAN-AIR-SHUTTLE-ASA-1413204/company/

List of shareholders(your source) is dated. Kjos is history, and already below 0.77 percent at present. Buyers are
https://m.ftf.no/?lang=en_GB and Scandi banks.

[ReallyAnnoyed]

You link to the front page of the sovereign wealth fund, which of course shows nothing. When you then go to the notice page, nothing is listed either: https://www.folketrygdfondet.no/flaggemeldinger/category182.html

There has been nothing in the news either. Can you please link to a page where the ownership is more updated than the one I provided?

Looking at the Oslo stock exchange website, no major transactions have taken place. https://www.oslobors.no/markedsaktivitet/#/details/NAS.OSE/messages

It does seem odd that you, uncle, seem to know more about the ownership structure than disclosed by the stock exchange.

[calypso]

I don't think is as simple or transparent as that. You are talking about the pension fund which manages 20 odd billion dollars but there is also the Oil Wealth Fund which is much much larger at the trillion dollar level. Not all holdings are owned directly by the Pension fund. Both funds combined also own many banks, companies and financial institutions which in turn also own all sorts of shares.

[ReallyAnnoyed]

The trillion dollar fund is mainly for investment abroad and it is their own statement that the fund cannot own more than 10% of a listed company: https://www.nbim.no/no/oljefondet/slik-er-fondet-investert/aksjeforvaltningen/ NAS is not listed anywhere there.

This is starting to sound more and more like smoke and mirrors to present some illusion that NAS is a state carrier just because it uses the name "Norwegian". It is really not. SAS was formed by Norway, Sweden and Denmark a long time ago, but Notway sold its shares in them years ago.

I have no skin in this game, but when someone claims that the Norwegian state is majority shareholder in NAS, I expect it to be backed up by hard facts. Just wishy washy speculation and insinuations.

[uncle-traveling-matt]

The trillion dollar fund is mainly for investment abroad and it is their own statement that the fund cannot own more than 10% of a listed company: https://www.nbim.no/no/oljefondet/slik-er-fondet-investert/aksjeforvaltningen/ NAS is not listed anywhere there.

This is starting to sound more and more like smoke and mirrors to present some illusion that NAS is a state carrier just because it uses the name "Norwegian". It is really not. SAS was formed by Norway, Sweden and Denmark a long time ago, but Notway sold its shares in them years ago.

I have no skin in this game, but when someone claims that the Norwegian state is majority shareholder in NAS, I expect it to be backed up by hard facts. Just wishy washy speculation and insinuations.

Please, calm down. I am merely stating the facts. Shareholder lists have a delay, and the marketscreener you are using is dated. Varna is not even a shareholder anymore, but showing up as largest shareholder on your source. Folketrygfondet is at presently 5.85 percent, and thus biggest owner. As things stand now, and with the government guarantee, Norwegian is in a perfect position to sort out it's debt, and financial challenges by putting it's bondholders and creditors up against the wall.
Norway sold it's last shares in sas and made Norwegian it's main national airline. Without Norwegian, Norway would never had sold it's shares in sas

[maxpeck]

I have no skin in this game, but when someone claims that the Norwegian state is majority shareholder in NAS, I expect it to be backed up by hard facts. Just wishy washy speculation and insinuations.

I hope this meets all of your expectations.


https://cimg7.ibsrv.net/gimg/pprune.org-vbulletin/828x742/8933950a32f2065c5d25a84bce831ef6c2425717_606a283b6bff52be126 e0140f9efbf0fafd9b81b.jpeg

[ReallyAnnoyed]

Maxpeck, thanks. Which source is that? I prefer to read it myself than a screenshot.

What the Norwegian state has offered is a loan guarantee, provided that NAS came live up to some pretty tough conditions including 8% equity which they are nowhere near meeting. Only a PR manager working for NAS could come up with the ludicrous notion that NAS is "in a perfect position to sort out its debt." It is the absolutely last arrow of desperation, for what they are asking to convert massive debt to shares of an imaginary value in the hope that the creditors want a lottery ticket instead of the assests that the loans are secured against. As you can see right here: https://finansavisen.no/nyheter/luftfart/2020/04/08/7516687/norwegian-kreditorer-tatt-pa-sengen the creditors did not even know about this notion. If it was that simple, I wonder why any company would ever go bankrupt if they can just hand over shares to their creditors to make the debt magically disappear?

Should this debt to equity swap work against all odds and sense, you will still end up wiping basically all current shareholders out to nothing: https://finansavisen.no/nyheter/luftfart/2020/04/08/7516585/norwegian-lanserer-redningsplan

Norwegian is not a national carrier. It is and has always been a private company. The strategy now is a variant of the "privatize the profits, but socialize the losses." An argument used is that Norwegian in lieu of its name advertises Norway around the world. Pretty desperate argumentation. If you want connectivity in Norway due to the geography, Widerøe is much better suited for that. Flying Norwegians to the sun can be achieved by any airline.

[uncle-traveling-matt]

Maxpeck, thanks. Which source is that? I prefer to read it myself than a screenshot.

What the Norwegian state has offered is a loan guarantee, provided that NAS came live up to some pretty tough conditions including 8% equity which they are nowhere near meeting. Only a PR manager working for NAS could come up with the ludicrous notion that NAS is "in a perfect position to sort out its debt." It is the absolutely last arrow of desperation, for what they are asking to convert massive debt to shares of an imaginary value in the hope that the creditors want a lottery ticket instead of the assests that the loans are secured against. As you can see right here: https://finansavisen.no/nyheter/luftfart/2020/04/08/7516687/norwegian-kreditorer-tatt-pa-sengen the creditors did not even know about this notion. If it was that simple, I wonder why any company would ever go bankrupt if they can just hand over shares to their creditors to make the debt magically disappear?

Should this debt to equity swap work against all odds and sense, you will still end up wiping basically all current shareholders out to nothing: https://finansavisen.no/nyheter/luftfart/2020/04/08/7516585/norwegian-lanserer-redningsplan

Norwegian is not a national carrier. It is and has always been a private company. The strategy now is a variant of the "privatize the profits, but socialize the losses." An argument used is that Norwegian in lieu of its name advertises Norway around the world. Pretty desperate argumentation. If you want connectivity in Norway due to the geography, Widerøe is much better suited for that. Flying Norwegians to the sun can be achieved by any airline.

For someone without a skin in this game, you seem to get mighty defensive all of the sudden. Im holding on to my original opinion, and you are entitled to your own opinion, but not your own facts, one of these just corrected and spoon feed to you by another member in here.

[maxpeck]

You're welcome. It is available from here, but to get the latest updates you have to pay.

https://tekinvestor.no/aksjonaerlister/nas_ol

[ReallyAnnoyed]

Well uncle, you are about as credible as Comical Ali and I only interject because you so obviously misinform on purpose. You remind me of the PR managers that NAS like to employ. The former one, DK, was completely delusional as well. I provided you with facts, but when you are fact-resistant, one can not but wonder about your obvious lack of neutrality. This is an open forum, not an organ for company propaganda.

Thanks, Maxpeck.

[uncle-traveling-matt]

Well uncle, you are about as credible as Comical Ali and I only interject because you so obviously misinform on purpose. You remind me of the PR managers that NAS like to employ. The former one, DK, was completely delusional as well. I provided you with facts, but when you are fact-resistant, one can not but wonder about your obvious lack of neutrality. This is an open forum, not an organ for company propaganda.

Thanks, Maxpeck.

You call me fact-resistant. All the while you are making your assumptions based on ”facts” that you find from media, and cherry pick to fit with your so-called ”neutrality” analysis of Norwegian. You can't even find a correct list of shareholders, I believe that is quite telling. Trying to silence someone by calling me a propaganda minister from an evil regime, reflects very poorly back at you as a person.

[dirk85]

Judging by the way some people are writing here you would think that Norway owns 60% of the company, while they only have 6% of the shares. Hardly relevant.
Considering the market value of the company that 6% is worth less than 10 millions euros, which is the equivalent of less than peanuts, enough to run the company for maybe 2 days. With a debt of what, 6 billions eur?
The more I look at the number the more I realize that government loans are not going to be enough.
If they want to survive they need a monstrous full blown bail out, not a guaranteed loan of a few hundreds millions.

[wisecaptain]

Sounding desperate …. their debt is simply horrific
https://www.bloomberg.com/opinion/articles/2020-04-09/coronavirus-norwegian-air-shuttle-tries-a-desperate-final-gambit

[Superpilot]

Damning write up but sadly very accurate.

[easyJetCrew]

I personally can't see Norwegian getting themselves out of this mess now. To be honest, I'm surprised they managed to survive Winter 19/20 after last years' troubles, so without an enormous injection of cash from the Norwegian Government, I suspect they may be the first major airlines to come unstuck by the current crisis.

[ObadiahDogberry]

A lot will really depend on how much Norwegian's creditors are willing to bet on state aid saving the airline. If the company goes into bankruptcy, the creditors will assuredly lose a lot, and they will have to take their chances with the bankruptcy process to see what, if anything, they can recover. If they are confident that the Norwegian government will come through to save the airline, they may be more willing to gamble with converting their debt into equity in the hopes that in a few years they can sell their shares to recoup their money. Both seem like a big risk either way. It does seem like Norwegian is putting on the full court press within Norway, trying to scare the politicians and public into (probably somewhat realistic scenario) believing that much of Norway will lose flights if Norwegian goes under, and that what is kept will be operated by the likes of Ryanair and WizzAir.

[Porto Pete]

If they are confident that the Norwegian government will come through to save the airline

Can you quote a source that the government want to "save the airline"? I have only seen a state guarantee of some $290M~ being offered. Which is against a debt pilot of $5,700,000,000 (Five point seven billion)

Lease payments have not been made on two 787s in March according to this article (https://www.morningstar.co.uk/uk/news/AN_1584977071685075100/norwegian-air-misses-dp-aircraft-lease-payments-amid-bailout.aspx). Is it really reasonable for the owner of assets worth $300M~ to wait to recoup their money in shares that will become highly diluted?

[ObadiahDogberry]

Can you quote a source that the government want to "save the airline"? I have only seen a state guarantee of some $290M~ being offered. Which is against a debt pilot of $5,700,000,000 (Five point seven billion)
=13px

No, I can't because that is the big question right now. That is why I used qualifying words in what I said, such as "If they are confident..." and "willing to bet". It is also why I included the last sentence, because Norwegian is trying to sway the politicians and public support in favor of trying to save the airline. We should know soon if their campaign and efforts will work.

[Noxegon]

Lease payments have not been made on two 787s in March according to this article (https://www.morningstar.co.uk/uk/news/AN_1584977071685075100/norwegian-air-misses-dp-aircraft-lease-payments-amid-bailout.aspx). Is it really reasonable for the owner of assets worth $300M~ to wait to recoup their money in shares that will become highly diluted?

$300M might be the book value, but I can't see anyone signing a lease on an aircraft right now. To that end, it might be as well to leave the plane where it is.

[ManaAdaSystem]

A lot will really depend on how much Norwegian's creditors are willing to bet on state aid saving the airline. If the company goes into bankruptcy, the creditors will assuredly lose a lot, and they will have to take their chances with the bankruptcy process to see what, if anything, they can recover. If they are confident that the Norwegian government will come through to save the airline, they may be more willing to gamble with converting their debt into equity in the hopes that in a few years they can sell their shares to recoup their money. Both seem like a big risk either way. It does seem like Norwegian is putting on the full court press within Norway, trying to scare the politicians and public into (probably somewhat realistic scenario) believing that much of Norway will lose flights if Norwegian goes under, and that what is kept will be operated by the likes of Ryanair and WizzAir.

Yes, they have produced a report that says the government can pay them 12 billion NOK and still come out on top.
To scare the public they claim it will cost the traveling public 7 billion NOK in increased air fares if they go under. Not sure how this mixes with the introduction of another loco in the Norwegian market.
Fact is, when SAS went on strike, the price of a ticket Oslo Stockholm with Norwegian jumped to 8000 NOK. So much for their low cost guarantee.
The Norwegian market is just a small part of Norwegian, and for the Norwegian state to pay to support staff in Ireland, UK, France, Spain, USA, Thailand, etc is just pain stupid. These worker contribute nothing to Norway.
Let these countries carry the cost. If they want to.

[Meester proach]

^^^^
you say that but surely even the Norwegian government will want to keep the bits that have the potential to be profitable , intra Scandinavian or not as the case may be to help repay the debt

[737 Jockey]

Yes, they have produced a report that says the government can pay them 12 billion NOK and still come out on top.
To scare the public they claim it will cost the traveling public 7 billion NOK in increased air fares if they go under. Not sure how this mixes with the introduction of another loco in the Norwegian market.
Fact is, when SAS went on strike, the price of a ticket Oslo Stockholm with Norwegian jumped to 8000 NOK. So much for their low cost guarantee.
The Norwegian market is just a small part of Norwegian, and for the Norwegian state to pay to support staff in Ireland, UK, France, Spain, USA, Thailand, etc is just pain stupid. These worker contribute nothing to Norway.
Let these countries carry the cost. If they want to.


All staff are employed on local contracts with terms and conditions for the country in which they’re based. Therefore, respective Government Covid 19 assistance is applicable i.e. here in the U.K. JRS for LGW based employees etc. There is no extra burden for Norway in that respect.

[ManaAdaSystem]

All staff are employed on local contracts with terms and conditions for the country in which they’re based. Therefore, respective Government Covid 19 assistance is applicable i.e. here in the U.K. JRS for LGW based employees etc. There is no extra burden for Norway in that respect.

I was not talking about support for individual crew members. I'm talking about the parts of the company that are not near Norway, with production outside Norway and with no Norwegian citizens as staff.

This is a real mess. The Norwegian oil fund is the biggest owner in Norwegian. If the company manages to get their debt exchanged for stocks, the stock price will drop like a rock, and the fund will get a huge loss. That on top of the 3 billion NOK the Norwegian government has promised. If they want to maintain their share of the ownership, they have to feed more money into the company. In return they get a big ?. If this was a company with a solid foundation before corona, that would maybe be a risk worth taking. It was not, and it is now a big gamble if they will get any value for their money. Both in terms of the future of the company and 0 income from those parts (most of the company) based outside of Norway.
I bet a lot of those holding Norwegians loans are thinking like this: Cut our losses and get out, or gamble on CPR working on a half rotten body.
It will take time to get over corona, and chances are it will take even more money to keep them alive.

What they are trying to do is convert debt to shares so they can take up more debt. My bank would kick me out if I suggested anything like that.

[Big Pistons Forever]

So the company deliberately organized their business model in a way that minimized their contribution to the Norway economy, but now expect the Norwegian peoples tax dollars to bail them out.

The best line ever for how business executives see the world was on another PPRUNE thread

”Capitalization of profits, socialization of loses”

I was going to say “have they no shame ? “ .......but I realize how silly that sounds

[uncle-traveling-matt]

I was not talking about support for individual crew members. I'm talking about the parts of the company that are not near Norway, with production outside Norway and with no Norwegian citizens as staff.

This is a real mess. The Norwegian oil fund is the biggest owner in Norwegian. If the company manages to get their debt exchanged for stocks, the stock price will drop like a rock, and the fund will get a huge loss. That on top of the 3 billion NOK the Norwegian government has promised. If they want to maintain their share of the ownership, they have to feed more money into the company. In return they get a big ?. If this was a company with a solid foundation before corona, that would maybe be a risk worth taking. It was not, and it is now a big gamble if they will get any value for their money. Both in terms of the future of the company and 0 income from those parts (most of the company) based outside of Norway.
I bet a lot of those holding Norwegians loans are thinking like this: Cut our losses and get out, or gamble on CPR working on a half rotten body.
It will take time to get over corona, and chances are it will take even more money to keep them alive.

What they are trying to do is convert debt to shares so they can take up more debt. My bank would kick me out if I suggested anything like that.

This, from a guy working for sas 😂

But tell me. Does converting debt to shares mean taking up more debt? Will the total debt be more or less after this exercise?
New Norwegian will be very much alive after corona, with a strong equity, a lot less debt and one of the newest and most environmentally friendly fleets out there. Restructered, but stronger than ever.