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Hard times for Norwegian

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Hard times for Norwegian

Old 13th Apr 2020, 10:31
  #261 (permalink)  
 
Join Date: Aug 2017
Location: UK
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If we were BC (before Coronavirus) I would have said that Norwegian had a slightly better than evens chance of trading to longer term profitability and paying down it debt pile.

PC (Post Coronavirus) and we aren't anywhere near PC I just don't see how Norwegian can dodge this bullet shy of state aid on a massive scale, having said that its worth remembering that Norwegian was historically structured in such away that dead limbs could be cut off thus protecting the core (K area) The Norwegian Government will not be keen on a total collapse of the Norwegian brand or the loss of tax revenue from well paid employees in Norway.

I just can't see anyway the Government of Norway will or should bail out the entire group, so my best guess is that they will underwrite a chapter 11 style of restructuring which will be an Oslo centric operation (wasn't it always thus) flying short haul MAX & NG aircraft across Europe with few if any European bases, this new Norwegian will be largely state owned and will be re privatised in 3-5 years

If I recall the LGW slots were monetised and used for loan security so may well be called in but they are probably of little value now.

Anybody who thinks that in a few months it will be all over and business as normal is delusional, this year is a write off for the travel industry especially long haul at least until a vaccine is available to all and I can't see that before 2021

When airlines can fly again it will be Ryanair out of the blocks first with ultra low fares and will use its massive cash reserves to buy market share and push weakened companies to the wall.
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Old 13th Apr 2020, 12:06
  #262 (permalink)  
 
Join Date: Dec 2014
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Well fingers crossed....I shudder to imagine a transport option that mainly revolves around Ryanair
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Old 14th Apr 2020, 01:38
  #263 (permalink)  
 
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Originally Posted by RudderTrimZero View Post
The whole thing is being strung along because the absurd complexity of the whole operation will be exposed. In years to come, someone will write a book....How Not To Run An Airline.
Somebody already did: "Wings" by Robert J Serling
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Old 14th Apr 2020, 08:00
  #264 (permalink)  
 
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-50% on the share price today, something is happening?
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Old 14th Apr 2020, 11:11
  #265 (permalink)  
 
Join Date: Nov 1999
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Record drop in Norwegian share price today, understandable as shareholders will be either massively diluted or the company will cease to exist.
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Old 14th Apr 2020, 12:03
  #266 (permalink)  
 
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Originally Posted by fruitbat View Post
Record drop in Norwegian share price today, understandable as shareholders will be either massively diluted or the company will cease to exist.
NAS market cap around £80m........something has to happen.
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Old 14th Apr 2020, 12:27
  #267 (permalink)  
 
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Existing shareholders stand to lose around 96% of the value, as a Norwegian share with a nominal value of 100 will be worth only 4, if the plans of converting debt to equity goes through. Whilst that is indeed doubtful, shareholders are bailing en masse in order to save what can be saved. Hence the value has dropped around 50% within the first 20 minutes of trading on the Oslo stock exchange this morning.

The thing is, without converting debt to equity Norwegian cannot access the next - and by far largest - tranche of support from the NO government. Without that support, they look to be pretty much buggered.
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Old 14th Apr 2020, 12:29
  #268 (permalink)  
 
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Feels like the last gasps of Thomas Cook, again.
Sympathy to all the employees and small shareholders.
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Old 14th Apr 2020, 13:51
  #269 (permalink)  
 
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Macdo. ..and TCX previously, and Mytravel before that. Its a good thing the chinese Zn/Au mine is still going!
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Old 14th Apr 2020, 19:14
  #270 (permalink)  
 
Join Date: Sep 2008
Location: Scotland
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Alert from BALPA that Norwegian UK don’t have the money to pay OSM April salaries and unless they get money from the UK Government nothing forthcoming from OSM who don’t have the funds either. Thoughts with all colleagues there
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Old 14th Apr 2020, 20:49
  #271 (permalink)  
 
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Really can't see either the Irish or UK Govt coughing up to support Norwegian Air International or Norwegian Air UK
Bit of a long shot, but I wonder if the Swedes mights put some money in the pot to keep a couple of planes for Norwegian's base at Stockholm to provide competition against SAS for connections to the far north - or would they prefer to bail out BRA instead ?

Last edited by davidjohnson6; 14th Apr 2020 at 21:11.
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Old 14th Apr 2020, 22:00
  #272 (permalink)  
 
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Originally Posted by Capt Scribble View Post
Macdo. ..and TCX previously, and Mytravel before that. Its a good thing the chinese Zn/Au mine is still going!
And don't forget the financial tightrope AIH walked. Same old same old, in my (long) experience the directors will come up smelling of roses in another field while the pbi take a hit. Glad to be permanently out of it post September '99. Good luck delving those foreign mines
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Old 15th Apr 2020, 07:58
  #273 (permalink)  
 
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I really feel for the people working there at this time of utter uncertainty. No-one is safe in this industry at the moment.

However, Norwegian's business plan appeared to be:

1. Get lots and lots of expensive aeroplanes
2. ???
3. Profit!!

And it doesn’t seem to have worked that well, even pre-pandemic...
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Old 15th Apr 2020, 13:24
  #274 (permalink)  
 
Join Date: Aug 2007
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For they who where contemplating a long distance low cost operation there is something to be said for buying the company for sub 80 million euro without its overpriced plane leases and then negotiate with each batch of planeowners for a post corona pricing plan. With luck and financial patience one could even get the inital purchase price ++ back from Boeing in Max settlements. There is multiple AOC's, a governements approved transatlantic route network and a batch of new planes, already built so cheaper than new, to get quickly started post lockdowns, and a market name slightly more respected than the bottom of the low fares pile.
One would think that would be better than pursue expansion in the lowfares space overcrowded european market. In addition one would have a strong out of the blocks foothold in the intra Norway and Scandinavia markets which was always the moneyspinners Norwegian used to finance their longhaul. Trondheim-Oslo (with cheapest fares of 100 euro equivalent even out of season) is a core route with volume levels and frequency comparable to Dublin-London . Bergen-Oslo and Oslo-Copenhagen was not far behind in volumes.
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Old 15th Apr 2020, 13:38
  #275 (permalink)  
 
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No April salary

https://www.theguardian.com/business...alary-covid-19
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Old 15th Apr 2020, 14:10
  #276 (permalink)  
 
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Originally Posted by vikingivesterled View Post
For they who where contemplating a long distance low cost operation there is something to be said for buying the company for sub 80 million euro without its overpriced plane leases and then negotiate with each batch of planeowners for a post corona pricing plan. With luck and financial patience one could even get the inital purchase price ++ back from Boeing in Max settlements. There is multiple AOC's, a governements approved transatlantic route network and a batch of new planes, already built so cheaper than new, to get quickly started post lockdowns, and a market name slightly more respected than the bottom of the low fares pile.
One would think that would be better than pursue expansion in the lowfares space overcrowded european market. In addition one would have a strong out of the blocks foothold in the intra Norway and Scandinavia markets which was always the moneyspinners Norwegian used to finance their longhaul. Trondheim-Oslo (with cheapest fares of 100 euro equivalent even out of season) is a core route with volume levels and frequency comparable to Dublin-London . Bergen-Oslo and Oslo-Copenhagen was not far behind in volumes.
Wise words Viking. About the most intelligent post I have read on here for quite some time.
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Old 15th Apr 2020, 14:21
  #277 (permalink)  
 
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IAG could do the above, as they displayed a certain interest in Norwegian a while back. I expect any offer would be around the €1 mark ±10c...
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Old 15th Apr 2020, 14:29
  #278 (permalink)  
 
Join Date: Feb 2005
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FFS get real. Anyone who buys Norwegian at this point is also taking on all the debt too. Over 7Billion dollars worth. Who in their right mind is going to do that in the current climate?
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Old 15th Apr 2020, 14:35
  #279 (permalink)  
 
Join Date: Jul 2013
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Originally Posted by vikingivesterled View Post
For they who where contemplating a long distance low cost operation there is something to be said for buying the company for sub 80 million euro without its overpriced plane leases and then negotiate with each batch of planeowners for a post corona pricing plan. With luck and financial patience one could even get the inital purchase price ++ back from Boeing in Max settlements. There is multiple AOC's, a governements approved transatlantic route network and a batch of new planes, already built so cheaper than new, to get quickly started post lockdowns, and a market name slightly more respected than the bottom of the low fares pile.
One would think that would be better than pursue expansion in the lowfares space overcrowded european market. In addition one would have a strong out of the blocks foothold in the intra Norway and Scandinavia markets which was always the moneyspinners Norwegian used to finance their longhaul. Trondheim-Oslo (with cheapest fares of 100 euro equivalent even out of season) is a core route with volume levels and frequency comparable to Dublin-London . Bergen-Oslo and Oslo-Copenhagen was not far behind in volumes.
Also there is brand value, atleast to some extent. They're after all biggest foreign carrier out of NY, so that definitely has some value in it.
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Old 15th Apr 2020, 15:01
  #280 (permalink)  
 
Join Date: Aug 2007
Location: Ireland
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Debt is mostly in plane leases and quite a bit to of US export finance who will not be interested in owning a foreign airline. All those planes sold at overprice on delivery against a overcost leaseback would have to have their leases renegotiated or planes returned. Preferably by a company that have other business with the same planeowners. Or a cash rich finance company with an interest in the airline industry that could buy out the planeowners at a discount in the current market and lease the planes effectively back to itself. And then in 3-5 years, when Boeing the Max payout has been scooped up and markets normalise, relaunch Norwegian back to the market as a well financed and well established airline. I could se a 5 to 10 fold payback on initial investment.
Pricing of a takeover would need to be in the 1-10c a share range through an enormous expansion of number of shares, to which existing shareholders for legal reasons would have to be invited to participate. Any pure buyout of existing shares would just be giving money to existing shareholders and would not only increase the price but would neither help the company survive. A new top management team with extensive airline experience and preferably scandi experience would also have to be put in place.
An umbrella company like IAG could be an option, but I suspect they don't want a long haul low fares competitor to BA or a Spain competitor to Iberia, so would shrink Norwegian to Scandinavia only taking away halve the advantages, but there are others.
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