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Hard times for Norwegian

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Hard times for Norwegian

Old 4th Sep 2019, 16:03
  #21 (permalink)  
 
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Originally Posted by lomapaseo View Post
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
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Old 4th Sep 2019, 16:58
  #22 (permalink)  
 
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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.
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Old 4th Sep 2019, 17:48
  #23 (permalink)  
 
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Originally Posted by calypso View Post
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.



Last edited by sarah737; 4th Sep 2019 at 18:04.
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Old 4th Sep 2019, 18:19
  #24 (permalink)  
 
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Originally Posted by Plastic787 View Post


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.
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Old 4th Sep 2019, 20:14
  #25 (permalink)  
 
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Bondholders not Happy!

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
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Old 5th Sep 2019, 09:46
  #26 (permalink)  
 
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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?
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Old 5th Sep 2019, 14:15
  #27 (permalink)  
 
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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.
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Old 5th Sep 2019, 17:57
  #28 (permalink)  
 
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Originally Posted by krismiler View Post
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.

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Old 6th Sep 2019, 00:01
  #29 (permalink)  
 
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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.
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Old 6th Sep 2019, 05:31
  #30 (permalink)  
 
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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.
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Old 6th Sep 2019, 09:32
  #31 (permalink)  
 
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Air Asia has no wide-bodied. Air Asia X is their low-cost long-haul subsidiary, with A330s.
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Old 6th Sep 2019, 09:56
  #32 (permalink)  
 
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I believe AirAsia X has 24 A330 in Malaysia, 2 in Indonesia and 11 in Thailand
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Old 6th Sep 2019, 16:08
  #33 (permalink)  
 
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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.
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Old 7th Sep 2019, 01:58
  #34 (permalink)  
 
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Originally Posted by krismiler View Post
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...
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Old 7th Sep 2019, 20:22
  #35 (permalink)  
 
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I thought this was a thread about Norwegian?
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Old 11th Sep 2019, 11:10
  #36 (permalink)  
 
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On ch aviation:

Prominent Norwegian shareholder rejects bond extension

cant read it its for Pro only
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Old 11th Sep 2019, 16:38
  #37 (permalink)  
 
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Originally Posted by babemagnet View Post
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.
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Old 11th Sep 2019, 19:30
  #38 (permalink)  
 
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Sissener votes NO!

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!
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Old 11th Sep 2019, 19:42
  #39 (permalink)  
 
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Nope, he wants to convert the bonds into shares. He says as much on a number of interviews.
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Old 11th Sep 2019, 20:54
  #40 (permalink)  
 
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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

Last edited by directmisbi; 11th Sep 2019 at 21:27.
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