Hard times for Norwegian
Join Date: Mar 2020
Location: Europe
Posts: 40
Likes: 0
Received 0 Likes
on
0 Posts
You are misleading. I never said Norwegian will become a regional Nordic player. So far it has been only you who mentioned that. What I said is Norwegian will become a carrier that will look like SAS right now.
And is not about national sentiment. It´s about money coming from Norwegian tax payers
And is not about national sentiment. It´s about money coming from Norwegian tax payers
Join Date: Dec 2004
Location: Earth
Posts: 91
Likes: 0
Received 0 Likes
on
0 Posts
You are misleading. I never said Norwegian will become a regional Nordic player. So far it has been only you who mentioned that. What I said is Norwegian will become a carrier that will look like SAS right now.
And is not about national sentiment. It´s about money coming from Norwegian tax payers
And is not about national sentiment. It´s about money coming from Norwegian tax payers
And this is so simply because the debt it's so huge that it would be better to simply let it go bust and restart from scratch if that's what they wanted.
In regards to norwegian taxpayer's money, it would make sense what you're saying if indeed Norway would nationalise the airline like Italy has done with Alitalia. But right now that's not the case, although, again, it could very well be the case after bankruptcy precedings.
The presentation right now is designed to convince bondholders and creditors to swap almost $5 billion of debt into equity and later on May 4th to have their shareholders approve the swap.
And that plan, which is very difficult to achieve but maybe possible in this current mayhem, would only have Norway extending a very small line of credit (which must be paid back) of about $250 which is almost nothing (although precious right now) compared to the sacrifice of the creditors (in the billions) and the shareholders (which will be diluted to almost nothing, although still better than zero).
So Norway, right now, won't have much of a saying in this current plan. Later on, who knows. Anything can happen in liquidation, including having some Chinese investors or even RYR come over and pick up whatever pieces they see fit.
Join Date: Aug 2016
Location: Ilmington, Warwickshire
Posts: 2
Likes: 0
Received 0 Likes
on
0 Posts
It will indeed be interesting to see what bases are considered viable.
One thing is for sure, the Scandis love their sun, and very many have second homes there, so I guess a few well used Mediterranean routes will remain. I also wonder what value LGW will have if Norwegian are looking to wind down LH?
One thing is for sure, the Scandis love their sun, and very many have second homes there, so I guess a few well used Mediterranean routes will remain. I also wonder what value LGW will have if Norwegian are looking to wind down LH?
Join Date: Nov 2002
Location: Dublin
Posts: 652
Likes: 0
Received 0 Likes
on
0 Posts
LH operations to be grounded until market demand picks up, that's the "flexible bit" . If lease holders do not accept a PBH deal, then they are stuffed. Additionally while the "plan" mentions credit card companies withholding funds due to the situation, it does not mention how many refunds are due to PAX( unless I'm missing something, which is possible at my age!) If LH demand picks up, and the crews are available, and the planes can still fly, and the Gatwick slots have not been sold, and the refunds do not outweigh the sales, then its looking like April 2021 before the lava hatches..In the mean time, all the crews will effectively be jobless as OSM will not keep them on ad-infinitum and the Government won't pay when the jobs are not likely to appear in the reasonable future..Gatwick airport just got a 300M bail out but won't be allowing spurious credit left right and centre, again, all down to cash flow.
Join Date: Aug 2017
Location: UK
Posts: 206
Likes: 0
Received 0 Likes
on
0 Posts
No change then
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.
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.
I've a sneaky feeling they might get away with this and I kind of hope so.
The sad thing is a lot of Norwegian pilots have done their last flight for Norwegian, but don't yet realise it.
Join Date: Dec 2004
Location: Earth
Posts: 91
Likes: 0
Received 0 Likes
on
0 Posts
April 30th is the first bus stop for the creditors and bondholders to agree on the swap before shareholders vote on May 4th.
But again, remember that your prediction of norwegian becoming a regional player without LH or foreign bases and owned mainly by Norway is not at stake right now. That can only happen in bankruptcy mode, particularly with the Chapter 11 like legislation passed last Friday. Otherwise it won't be worth it. Norway is rich, but not stupid.
When you describe the strategy of getting rid of "limbs" to return to the core business if needed, it doesn't really mean much, because the debt (and not so much their staff) is what's killing norwegian. And that limb you can only cut off thru complete liquidation of the parent company, and not by closing a few bases with no assets.
Lastly, closing "limbs" without negotiation by declaring them bankrupt while still operating with the main company will surely come back to them in court as it's happened very often with RYR and other LLC in similar setups.
We shall see Thursday. I also think they're going to pull it thru.
But again, remember that your prediction of norwegian becoming a regional player without LH or foreign bases and owned mainly by Norway is not at stake right now. That can only happen in bankruptcy mode, particularly with the Chapter 11 like legislation passed last Friday. Otherwise it won't be worth it. Norway is rich, but not stupid.
When you describe the strategy of getting rid of "limbs" to return to the core business if needed, it doesn't really mean much, because the debt (and not so much their staff) is what's killing norwegian. And that limb you can only cut off thru complete liquidation of the parent company, and not by closing a few bases with no assets.
Lastly, closing "limbs" without negotiation by declaring them bankrupt while still operating with the main company will surely come back to them in court as it's happened very often with RYR and other LLC in similar setups.
We shall see Thursday. I also think they're going to pull it thru.
Join Date: Jul 2002
Location: europe
Posts: 42
Likes: 0
Received 0 Likes
on
0 Posts
Rumor has it: not quite. Supposedly there is a case of too many parked planes and too little technical staff on duty to properly mothball, and as a consequence the condition of said aircraft is deteriorating daily.
Anybody up there in Scandiland with an ear to the ground who can confirm/deny? Enquiring aircraft lessors and creditors want to know.
Anybody up there in Scandiland with an ear to the ground who can confirm/deny? Enquiring aircraft lessors and creditors want to know.
Join Date: Feb 2001
Location: Denmark
Posts: 418
Likes: 0
Received 0 Likes
on
0 Posts
Trouble in lease land.
When should we expect a flybe style impounding of aircraft - before May 5th?
Norwegian are expecting everyone to work for nothing for them. Unpaid staff, unpaid handling companies, unpaid airports. If this happens - maybe, just maybe, the company will survive. Why take the risk to paid off with a worthless share when you can negotiate with an impounded asset?
If the leasing companies move to writing off debt and move to power by the hour, you can expect every other airline to demand the same.
If Norwegian aren't storing the aircraft correctly - and not paying anyone to manage them when parked, the leasing companies would be better taking them back. At least then they have some value in twelve months.
Norwegian are expecting everyone to work for nothing for them. Unpaid staff, unpaid handling companies, unpaid airports. If this happens - maybe, just maybe, the company will survive. Why take the risk to paid off with a worthless share when you can negotiate with an impounded asset?
If the leasing companies move to writing off debt and move to power by the hour, you can expect every other airline to demand the same.
If Norwegian aren't storing the aircraft correctly - and not paying anyone to manage them when parked, the leasing companies would be better taking them back. At least then they have some value in twelve months.
Join Date: May 2000
Location: SV Marie Celeste
Posts: 655
Likes: 0
Received 0 Likes
on
0 Posts
Anybody up there in Scandiland with an ear to the ground who can confirm/deny? Enquiring aircraft lessors and creditors want to know.
Join Date: Aug 2000
Posts: 1,499
Likes: 0
Received 0 Likes
on
0 Posts
A lot of the aircraft are parked in Stavanger and Bergen, on the Norwegian west coast. Close to the sea in a wet and salty environment. They look to be properly covered, engines, pitots, static ports, tires. Another bunch of them parked in Oslo.
It’s difficult to park anything in Skandinavia without getting close to the sea.
It’s difficult to park anything in Skandinavia without getting close to the sea.
Join Date: Nov 2002
Location: Dublin
Posts: 652
Likes: 0
Received 0 Likes
on
0 Posts
Quote Bloomberg and the "PLAN" "As part of the new business plan, the carrier plans to only operate 7 airplanes in the Scandinavian region until April 2021 to minimize its cash burn, and then gradually resume long-haul and European flights. Norwegian only expects normal operations in 2022. Even then, it expects to operate fewer aircraft and focus on profitable routes."no
Is it realistic to expect lease companies to allow A/C to sit around for 12 months with no, or little income, (PBH) . The maintenance alone on over 150 a/c will be millions even if they don't fly. And what about the crews and the overheads at LGW and other European bases? The more one reviews the proposal, the more one realises this is either a huge bluffing game or a complete collapse just allowing sufficient breathing space to dig in in Norway and keep the embers glowing. Without Covid they were at least heading in the right direction but now walking uphill with rucksacks of debt is a pipe dream. Let's hope their is an upturn in the UK to allow at least some crews and staff to gain employment.
Is it realistic to expect lease companies to allow A/C to sit around for 12 months with no, or little income, (PBH) . The maintenance alone on over 150 a/c will be millions even if they don't fly. And what about the crews and the overheads at LGW and other European bases? The more one reviews the proposal, the more one realises this is either a huge bluffing game or a complete collapse just allowing sufficient breathing space to dig in in Norway and keep the embers glowing. Without Covid they were at least heading in the right direction but now walking uphill with rucksacks of debt is a pipe dream. Let's hope their is an upturn in the UK to allow at least some crews and staff to gain employment.
Join Date: Aug 2017
Location: UK
Posts: 206
Likes: 0
Received 0 Likes
on
0 Posts
A lot of the aircraft are parked in Stavanger and Bergen, on the Norwegian west coast. Close to the sea in a wet and salty environment. They look to be properly covered, engines, pitots, static ports, tires. Another bunch of them parked in Oslo.
It’s difficult to park anything in Skandinavia without getting close to the sea.
It’s difficult to park anything in Skandinavia without getting close to the sea.
Covid might work for them, after all these aircraft aren't going to be flying with anyone anytime soon, at least an owner is not paying for storage or ground maintenance cost.
It will be an interesting week.
Quote Bloomberg and the "PLAN" "As part of the new business plan, the carrier plans to only operate 7 airplanes in the Scandinavian region until April 2021 to minimize its cash burn, and then gradually resume long-haul and European flights. Norwegian only expects normal operations in 2022. Even then, it expects to operate fewer aircraft and focus on profitable routes."no
Is it realistic to expect lease companies to allow A/C to sit around for 12 months with no, or little income, (PBH) . The maintenance alone on over 150 a/c will be millions even if they don't fly. And what about the crews and the overheads at LGW and other European bases? The more one reviews the proposal, the more one realises this is either a huge bluffing game or a complete collapse just allowing sufficient breathing space to dig in in Norway and keep the embers glowing. Without Covid they were at least heading in the right direction but now walking uphill with rucksacks of debt is a pipe dream. Let's hope their is an upturn in the UK to allow at least some crews and staff to gain employment.
Is it realistic to expect lease companies to allow A/C to sit around for 12 months with no, or little income, (PBH) . The maintenance alone on over 150 a/c will be millions even if they don't fly. And what about the crews and the overheads at LGW and other European bases? The more one reviews the proposal, the more one realises this is either a huge bluffing game or a complete collapse just allowing sufficient breathing space to dig in in Norway and keep the embers glowing. Without Covid they were at least heading in the right direction but now walking uphill with rucksacks of debt is a pipe dream. Let's hope their is an upturn in the UK to allow at least some crews and staff to gain employment.
Join Date: Dec 2004
Location: Earth
Posts: 91
Likes: 0
Received 0 Likes
on
0 Posts
I also think that most creditors will go for it. They're already proposing minor adjustments to the "plan":
https://whtc.com/news/articles/2020/...ction=business
Also remember that the "plan" is really at a worst case scenario by starting operations in April 2021 and going full blast on 2022. If things improve with the virus, it could very well ramp up next winter to get ready for a full summer schedule in 2021.
https://whtc.com/news/articles/2020/...ction=business
Also remember that the "plan" is really at a worst case scenario by starting operations in April 2021 and going full blast on 2022. If things improve with the virus, it could very well ramp up next winter to get ready for a full summer schedule in 2021.
Join Date: Mar 2020
Location: Europe
Posts: 40
Likes: 0
Received 0 Likes
on
0 Posts
Creditors will go for it. Of course! They don’t have a better option. But they will go for it with the New Norwegian plan, based on core profitability and huge fleet reduction. Even Jacob Schram said yesterday they will cut the LH fleet by 50% (at least).
The sooner the crews outside Scandinavia accept the reality the better for them.
As I said before, 40-50 aircraft less means a lot of base closures. Whoever don’t want to to see it is really naive.
And thinking about a full summer schedule in 2021 is...
The sooner the crews outside Scandinavia accept the reality the better for them.
As I said before, 40-50 aircraft less means a lot of base closures. Whoever don’t want to to see it is really naive.
And thinking about a full summer schedule in 2021 is...
