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IAG mulls takeover of Norwegian?

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IAG mulls takeover of Norwegian?

Old 26th Jun 2018, 14:11
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The meeting on the 4th of July is supposedly only a cabin crew union meeting.
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Old 20th Dec 2018, 20:47
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What is the deal up north?

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

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

Diddn’t the flamboyant Norwegian CEO recently say that the harvest from the seed has begun which would be beneficial for customers, employees and investors?

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

Lot’s of really good people in that company - any credebility to the norwegian media doom?
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Old 20th Dec 2018, 22:19
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@Smirf420

The fact is that nobody of the cockpit crews and definitely non of the cabin crews know what is going on. Some people are optimistic, some pessimistic and some simply don't seem to give a damn.
On the intranet, no new info what's going on has been posted, except for Focus2019 which is the 3bilNOK savings plan for next year. It's like any airline. Everybody is spreading rumours and nobody really knows what to believe. Life goes on.
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Old 21st Dec 2018, 21:12
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Cancelled all new joiners courses for the 787 next year......
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Old 22nd Dec 2018, 14:09
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@lansen

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

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

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

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

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

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

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Old 22nd Dec 2018, 18:10
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Originally Posted by Smirf420 View Post
What is the deal up north?

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

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

Diddn’t the flamboyant Norwegian CEO recently say that the harvest from the seed has begun which would be beneficial for customers, employees and investors?

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

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

https://www.newsinenglish.no/2018/12...-more-trouble/
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Old 23rd Dec 2018, 00:53
  #107 (permalink)  
 
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I am not worried, Norwegian will get funding. One thing that would worry me though would be IAG taking ownership.. that would be a large disaster for everybody at Norwegian.. Willie Walsh go away..! Norwegian should be its own or if merging with anyone, then Lufthansa’s Eurowings would be a good match.. sure would make Willie Walsh shit his pants 😉

Last edited by Jetavia; 23rd Dec 2018 at 08:08.
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Old 23rd Dec 2018, 07:16
  #108 (permalink)  
 
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You’re not worried? You should be, they are massively over leveraged with debt, signs of an alarming slowdown in the US to which they are overexposed
amd cancelling courses and new deliveries. This company has expanded way way too fast and taken too much debt on the balance sheet. A savvy investor wouldn’t waste a dime on this company. Why do you think IAG didn’t move to buy earlier in the year? One reason, perhaps, is they did due diligence having taken a stake, and could see it’d be better business to wait for them to go bust and minesweep and cherry pick what they really want; rather than be saddled with the whole mess of a company.
Unfortunately, I’ve seen these signs many times before, they will likely collapse in 2019 imo. Sad times
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Old 23rd Dec 2018, 08:39
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Well Norwegian is the pride of Norway, and the country do have people with much money that might invest. For instance earlier this year investors were offered to buy more stock at a good price, they were sold with no problems.

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

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

Again i am not worried, as the company do have a plan on how to handle it. And do have tools in the toolbox to improve the economics. Mind you the Airbus NEO’s were never intended to join the fleet, the deal was just to sweet to pass up. Most will be sold at a profit except some few LR’s that will be kept. The MAX8’s will keep coming.
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Old 23rd Dec 2018, 08:53
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The top management seems to be very confident that they are able to save 3 billion NOK with their FOCUS2019 campaign, the expensive investments in Argentina are starting to pay dividend (possibly?), A321LR “game changer” gives possibility to open new long haul routes to be operated by narrow body. Maybe even Rolls Royce finds a solution to the engine issue.
So it could be a interesting year ahead or it could be that they don’t exist anymore, time will tell. But I think that the investors still have a strong believe in the company, otherwise they would have sold it last summer to IAG or LH or RYR.
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Old 23rd Dec 2018, 09:18
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I think it was more a case of IAG not wanting to buy, than NAS not wanting to sell. I hope they survive as his industry has had more than its share of pain. However, I just don’t see it. Investors don’t just pump money into a black hole. Rich people don’t get rich by backing bad companies just because they need cash. If they default in their banking issues this week, they will lose their lines of credit, fuel companies and airports will want payments upfront; and in quarters where cash ain’t flowin’, that’s bad news in this business.
i hope I’m wrong
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Old 23rd Dec 2018, 09:27
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Regarding deliveries, we just received 3 brand new max in one day.
As for the 787 deliveries they are deferred for the next 10 airframes due to the RR isses. Recruitment to be resumed once the engine problems are fixed.
The financials are stressed at the moment, mostly due to technical writedowns of bank norwegian, the oil price taken a huge dive(write down on the hedge position) and huge costs due to the expansion.
IAG have already put in two offers for the whole company, Carsten Spohr of Lufthansa also expressing interest.
Companies are not take over other companies on face value, but on the PROSPECT of the investment and the possible RETURN on this. Norwegian is here to stay.
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Old 23rd Dec 2018, 09:48
  #113 (permalink)  
 
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I think it was more a case of IAG not wanting to buy, than NAS not wanting to sell.
That is a glib unsubstantiated statement that is at odds with all the known facts. IAG bought almost 5% of NAS at a cost of many tens of millions, a stake that it still owns (after all the due dilligence). Willie Walsh has stated many times that is remains interested in buying Norwegian. We know that two offers have been made for a price well above the current market cap. I addition another expression of interest was made by LH.

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

Last edited by calypso; 23rd Dec 2018 at 10:06.
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Old 23rd Dec 2018, 10:41
  #114 (permalink)  
 
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Originally Posted by Jetavia View Post
Well Norwegian is the pride of Norway....
Says who? With all the creative organizing and staffing, it is considered Norwegian by name, not by much else.
On customer satisfaction and loyalty the norwegians rank Norwegian below both SAS and Widerøe.
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Old 23rd Dec 2018, 11:09
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Old 23rd Dec 2018, 15:31
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Expansion is the only thing that is keeping the company going. They are paying for today’s flying programme with the forward sales for future flying. They’re a flying Ponzi scheme. I love how people say they’re backed by the Norwegian sovereign wealth fund ignoring the fact that that same fund is unlikely to want to lose money in perpetuity. Low Cost Long Haul is historically unprofitable and a non starter. Nothing’s changed in that respect and it’s being found out again now.

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

Will be an interesting few months..
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Old 23rd Dec 2018, 16:50
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2019 will Make or Brake Norwegian!

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

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

As fare as terms for pilots goes we would be better off with them gone, in the long term.
But be careful what you wish for , MOL in Dublin has gambled on all Norwegian pilots begging him for jobs this spring so he can fly the summer program without cancellations.
AND so he can lower the terms he is about to sign with his own pilots.
I personally think that Norwegian has reached a form of critical mass so that present owners are more then willing to gamble more money.
I say gamble, as this is not risk allergic conservative investors we are talking about.
Also, due to a fair market share ,network and slots they are worth lots to any other medium or big airline.
OK
To the kitchen for PoppCorn
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Old 23rd Dec 2018, 22:29
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Originally Posted by BluSdUp View Post
First I would like to say I hope they survive, for two reasons.
1 Our fellow pilots in Norwegian
2 The absurdly dirt cheap tqt I regularly pick up in my perpetual commute, they have saved me tens of thousands of euros.
Now for the facts.
DN, the Norwegian FT stated on Friday 21/12 that they need 160 mill euro to not default at the loan terms.
What is more ,as per date they have 30 Billion Nkr of interest carrying debt, that is ca 3.2 Billion euro, give or take.
A Ponzi Scheme indeed.
As for the Norwegian Government goes they will not do a thing. They gave the Sørlandsbanen Train contract to some looser UK company and also sold the last SAS stocks.
On an optimistic note: If 2019 is politically and economically stable they will be ok.
Oh , I forgot we live in the most unstable time since the fall of the wall or perhaps since 1945.........

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

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

The take away is that the best informed and most interested observer, MOL, has concluded that they are toast and is acting accordingly. Most interesting.
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Old 23rd Dec 2018, 22:58
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I think the OP has hit the nail squarely on the head. If reason prevails,Norwegian is probably too big to fail. However, with Brexit, looming US recession on the horizon courtesy of an illiterate US President, (insert own unforeseen event here), all it would take is a politician or banker or two to say “sod it, I’m not going to throw good money after bad” and that will be that.
why don’t we lock the thread and all come back in 12 months to see what the result was? ��
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Old 23rd Dec 2018, 23:05
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The forbes article has been updated :
And based on communication sent from the carrier this Saturday, the airline’s liquidity position is reportedly stable. As the end of the year approaches, Norwegian seems keen on having its debts fully settled.
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