Go Back  PPRuNe Forums > Flight Deck Forums > Rumours & News
Reload this Page >

Hard times for Norwegian

Rumours & News Reporting Points that may affect our jobs or lives as professional pilots. Also, items that may be of interest to professional pilots.

Hard times for Norwegian

Old 11th Sep 2019, 21:16
  #41 (permalink)  
 
Join Date: Jul 2005
Location: Europe JAA
Posts: 59
It looks like Norwegian wants to push Sissener using the media
aircowboy is offline  
Old 11th Sep 2019, 22:06
  #42 (permalink)  
 
Join Date: Nov 2005
Location: hotel
Posts: 141
Originally Posted by directmisbi View Post
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.




sarah737 is offline  
Old 11th Sep 2019, 22:25
  #43 (permalink)  
 
Join Date: Dec 1999
Location: EGNX
Posts: 1,158
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.
Doors to Automatic is offline  
Old 12th Sep 2019, 06:31
  #44 (permalink)  
 
Join Date: Sep 2007
Location: Earth
Posts: 169
It is looking like the bond holders will approve the extension:

https://newsweb.oslobors.no/message/484994
NEDude is offline  
Old 12th Sep 2019, 13:23
  #45 (permalink)  
 
Join Date: Mar 2006
Location: Not where I want to be
Age: 66
Posts: 233
NAS shares up 10.11% today.
Per
Ancient Mariner is offline  
Old 12th Sep 2019, 16:34
  #46 (permalink)  
 
Join Date: Sep 2003
Location: away from home
Age: 58
Posts: 705
Originally Posted by NEDude View Post
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...
oceancrosser is offline  
Old 12th Sep 2019, 18:24
  #47 (permalink)  
 
Join Date: Oct 2002
Location: London UK
Posts: 6,252
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.
WHBM is offline  
Old 12th Sep 2019, 23:05
  #48 (permalink)  
 
Join Date: Dec 1999
Location: EGNX
Posts: 1,158
Originally Posted by WHBM View Post
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.
Doors to Automatic is offline  
Old 13th Sep 2019, 07:34
  #49 (permalink)  
 
Join Date: Sep 2008
Location: Where it is comfortable...
Age: 55
Posts: 685
Originally Posted by Doors to Automatic View Post
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 ...

andrasz is offline  
Old 13th Sep 2019, 08:20
  #50 (permalink)  
 
Join Date: Jul 2001
Location: chances are, not at home
Posts: 262
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

Last edited by Joe le Taxi; 13th Sep 2019 at 09:53.
Joe le Taxi is offline  
Old 13th Sep 2019, 08:34
  #51 (permalink)  
 
Join Date: Sep 2008
Location: Where it is comfortable...
Age: 55
Posts: 685
Originally Posted by Joe le Taxi View Post
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.

andrasz is offline  
Old 13th Sep 2019, 11:02
  #52 (permalink)  
 
Join Date: Dec 1999
Location: EGNX
Posts: 1,158
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.
Doors to Automatic is offline  
Old 13th Sep 2019, 14:11
  #53 (permalink)  
 
Join Date: Sep 2007
Location: Earth
Posts: 169
Originally Posted by Doors to Automatic View Post
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.
NEDude is offline  
Old 13th Sep 2019, 14:41
  #54 (permalink)  
 
Join Date: Dec 2010
Location: Limbo
Posts: 1


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.
directmisbi is offline  
Old 13th Sep 2019, 15:44
  #55 (permalink)  
 
Join Date: Mar 2006
Location: Not where I want to be
Age: 66
Posts: 233
Up another 11.1% today.
Per
Ancient Mariner is offline  
Old 13th Sep 2019, 20:59
  #56 (permalink)  
 
Join Date: Dec 1999
Location: EGNX
Posts: 1,158
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.

Last edited by Doors to Automatic; 13th Sep 2019 at 23:24.
Doors to Automatic is offline  
Old 16th Sep 2019, 15:31
  #57 (permalink)  
 
Join Date: Sep 2007
Location: Earth
Posts: 169
Bond extension is officially approved.

https://business.financialpost.com/p...-relief-plan-2
NEDude is offline  
Old 16th Sep 2019, 22:36
  #58 (permalink)  
 
Join Date: Mar 2010
Location: loughborough
Age: 57
Posts: 54
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.
JonEMA is offline  
Old 17th Sep 2019, 20:40
  #59 (permalink)  
 
Join Date: Aug 2006
Location: West Sussex
Age: 78
Posts: 4,196
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.go...port-slots.pdf
Chugalug2 is offline  
Old 22nd Sep 2019, 13:11
  #60 (permalink)  
 
Join Date: Mar 2010
Location: loughborough
Age: 57
Posts: 54
More 787 groundings

Originally Posted by directmisbi View Post


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

​​​​​​What now for DY ?


JonEMA is offline  

Thread Tools
Search this Thread

Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.