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Hard times for Norwegian

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Hard times for Norwegian

Old 16th Nov 2020, 07:42
  #901 (permalink)  
 
Join Date: Oct 2019
Location: MADRID
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At this moment the package can already be negociated as the parlament gathered in the weekend to decide an aviation aid package.

So maybe there's still a life after this covid black chapter for most🤞
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Old 16th Nov 2020, 08:27
  #902 (permalink)  
 
Join Date: Nov 2009
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Wickerbill

Enlightening.
Getting rid of the debt is paramount. In its own absurd way, covid will see to that.
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Old 16th Nov 2020, 08:41
  #903 (permalink)  
 
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Its encouraging to see the Norwegian government in Parliament working on a rescue package.

But that rescue package, what will it cover, what will be clauses imposed by the government, and above all can the money that is given to Norwegian by the government go beyond the boarders, to the hard working employees in Spain, Italy, France and the UK????

Or will Norwegian retreat to its original core area of flying, get rid of debt, and build its self back up over the next few years???

I just hope the hard working employees of Norwegian are given some guidance and direction as to what the future holds, and soon. Its a horrible time.
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Old 16th Nov 2020, 09:08
  #904 (permalink)  
 
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Norwegian might well be saved for intra Norwegian services and some international ops ex Norway but anyone who seriously believes that theyíll be flying point to point LH services out of the likes of LGW, CDG etc again is, quite frankly, delusional. The business model was a proven money pit and failure before Covid, that much was clear. Covid merely accelerated what was going to happen anyway.
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Old 16th Nov 2020, 09:19
  #905 (permalink)  
 
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It’s not just about the here and now, it’s also about future bookings, ask yourself, as a passenger would you book a shorthaul flight from LGW with Norwegian at the moment? I think the answer would be no - I would use EasyJet. The same goes for longhaul, Norwegian or BA/ Virgin? It is as much about consumer confidence as it is about state subsidies and I’m just not sure there is any confidence in Norwegian within the flying public outside Norway - I hope I’m wrong but I think it will be a shadow of its former self if it continues to exist (and that’s before the legal challengers of having a state subsidised airline being based in a different country Directly competing with that countries airlines - can’t imagine EasyJet would accept it without a fight).
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Old 16th Nov 2020, 09:48
  #906 (permalink)  
 
Join Date: Nov 2007
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If NUK is a British company as you say then I canít see the Norwegian taxpayers being too happy about bailing them out, it needs a different strategy.

As for the JFK being full in the past, that was the past itís a very different industry at the moment and will be for the foreseeable future.

i hope Norwegian survive as it gives healthy competition but Iím not confident.
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Old 16th Nov 2020, 12:09
  #907 (permalink)  
 
Join Date: May 2018
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Come on people. They were and are a money shifting business which took/takes advantage of every loophole going. Getting cheap labour to passenger in from Thailand to operate Europe to the US then passenger back again.
Crew commuting in uniform not paying any taxes. Why should they be bailed out?
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Old 16th Nov 2020, 14:50
  #908 (permalink)  
 
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The Norwegian government have found out it has options and there will be other airlines than Norwegian around post CoVid19. The airline rescue package they are discussing is just about some 0 departure/passenger tax and whether it should be for the full year or just for part of it that the party Venstre (leftist turned environmental) is arguing for since it won't have much effect when few people are flying. Plus some extra purchases of seat support, basically an extension of what most countries do to keep needed but uneconomical routes going. This was the equvalent of 100 mill Euro before and might be a bit higher next year. None of which will do much for an airline that is hardly flying, like Norwegian. The politial parties are more busy with saving the airports, including the many Norwegian don't fly to.

The cost saving initiative was made for an airline world that was rosy red. Not taking into account the real world that is full of financial ups and downs. And the main plan of selling extras to passengers continued to be the plan after the passengers disappeared due to CoVid19. No new plan was made on how to generate more income from the opportunities that was around utilizing the assets they had including the freight friendly 787 (as compared to the 737). They had a chance to do something when they where allowed borrowing the extra 3 billion nkr last summer, but instead they decided to hibernate. In the process disapointing the many leasing company majority shareholders by not returning maximum on the pay lease only when using deals.
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Old 16th Nov 2020, 15:45
  #909 (permalink)  
 
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Much as I would like the people in NAS to all keep their jobs, the business model wasnít working too well prior to Covid making an appearance. Selling things below cost then trying to make it work by doing more of the same isnít a great strategy. If we magically returned tomorrow to 2019 traffic levels, they would still be in trouble, probably more so as their competitors have become much leaner during the pandemic.

Low-cost LH is a bit of a misnomer. Where are there significant savings to be made over other carriers? Everyone pays much the same for fuel, overflights, landing and parking fees. Most relevantly, utilisation (where LCCs generally score) is no better because of slots, curfews and saving 10mins on the turnaround makes no difference on 10hr sectors. Crew have to be slipped, just the same as the other airlines. Network, alliances, product, punctuality, etc. are more important. If you charge less for a LH flight than everyone else, itís almost certain that youíll be making less money, or none at all.
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Old 16th Nov 2020, 16:12
  #910 (permalink)  
 
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FullWings

Thank you for writing clearly.
I'm fed up with the "terminology drift" which confuses low fares with Low Cost.
Having the former doesn't give you the latter, as many legacy carriers have proved.
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Old 16th Nov 2020, 17:59
  #911 (permalink)  
 
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My airline has been doing this for quite a while. We have a couple of aircraft fully configured with seats removed but also can use seats to carry cargo with nets over the whole lot. Itís interesting how much freight you can carry on a ďpassengerĒ aeroplane but if you think of the load an individual seat is stressed for, it shouldnít come as much of a surprise, really.
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Old 16th Nov 2020, 18:42
  #912 (permalink)  
 
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To be fair to NAS most of the other operators already had cargo operations, Dangerous goods approval and established cargo agent contracts, so simply added capacity using either QC or internal protection. NAS would have to spend money to get this approval and any permanent changes to 738 would work out about 4 Million per unit. The 787 would be more costly. Analysts state cargo is forecast to grow until 2025 when PAX numbers will start to return to pre-covid levels, but its all a guessing game. The miracle virus jab may help but again its going to be 6/9 months before that is widely available meaning next summer will also be badly impacted with lack of forward bookings.
There is no competition in US routes at the moment as no one is basically travelling.

Not new news but it looks like the ball is rolling in Norway:

https://www.ch-aviation.com/portal/news/97372

Looks like the Spanish Government is also getting the jitters!

https://www.aerotime.aero/elzbietavi...rwegian-s-fate

Last edited by Kirks gusset; 17th Nov 2020 at 08:14.
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Old 17th Nov 2020, 09:31
  #913 (permalink)  
 
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Other than internal flying within the Nordic area its difficult to see a future for Norwegian on anything like the same scale, investors, creditors alike have been wiped out.

They had many years of tailwinds and grew rapidly, but faced with the ultimate headwind of covid their tanks are empty and coasting on fumes, a real shame for all involved.
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Old 17th Nov 2020, 10:51
  #914 (permalink)  
 
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AerCap says they will lease out Norewegians 787 aircraft to other operators. 2 are already gone. Makes sense, Norwegian has a no fly/no pay clause for their leased aircraft.
That means up to 24 787s will be gone, leaving 11 in the 787 fleet. Not sure, but my guess this will be the oldest 787s they have.
AerCap is one of the worlds biggest aircraft leasing companies and currently own 15% of Norwegian.

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Old 17th Nov 2020, 11:09
  #915 (permalink)  
 
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Its old news, but gives a clear indication of where things are heading:
Aercap's chief risk officer, Anton Joiner, has resigned from his position as a member of the board of Norwegian Air Shuttle.

The airline disclosed the resignation in a regulatory filing, but did not give a reason for his departure. Aercap declined to comment.
Joiner joined the airline’s governance team earlier this year after Aercap became Norwegian’s largest shareholder as part of its debt-for-equity conversion programme.
Aercap chief executive officer Aengus Kelly was also named as a new member of the airline’s nomination committee for two years following the decision of Finn Bergh and Bjorn Kise to step down.
During the lessor’s third quarter analyst call, Kelly said that Aercap was seeking to reduce its exposure to Norwegian.
The Dublin-based lessor has agreed new lease contracts for two Boeing 787s currently placed with Norwegian and was in the process of remarketing a third, he disclosed.
The end game now is all about reducing risk and exposure to counter claims.
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Old 17th Nov 2020, 12:07
  #916 (permalink)  
 
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And equally, I really can't see why the Norwegian government would perpetuate or get involved with the operation, when it is a legal and financial morass of negative net value, and the government can much more easily assign the socially important domestic routes to a properly Norwegian (and reasonably healthy) domestic carrier.
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Old 17th Nov 2020, 15:41
  #917 (permalink)  
 
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What carrier would that be. SAS is a Swedish/Danish owned airline. Norway only have 1 other carrier of any size and Wideroe are a regional plane size operator with mostly Dash and a couple of E jets. Nothing to serve routes like Oslo-Trondheim that normally is the size of sample Dublin-London. Which is why Wizz is coming in full steam.
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Old 17th Nov 2020, 19:55
  #918 (permalink)  
 
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If there is a market for it and money to be made rest assured that other operators will step in, see Ryanair, easyJet, etc
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Old 17th Nov 2020, 22:38
  #919 (permalink)  
 
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Tried to get Ryanair interested in flying to Trondheim since 97. They shy away from the Norwegian market because all the main airports are owned by the government and they can't get a deal, which is what they feel is essential for their model..They have done international traffic to a couple of alternative privately owned Oslo airports, the other cities don't have alternatives, but they are far away with more inconvenient ground links so are not as popular among Norwegians and therefore no god for intra Norwegian flights. As for easyJet even though their offering is more comparable to Norwegian they where never that active in Norway, probably seeing the total population as to small forgetting its also about wealth, distances and poor alternatives. There might be no ocean between Oslo and Trondheim but the alternative to a 45 min flight is/was a 7 hour drive at 60-80 km/hr on a lot of very boring single lane highway. Same for Oslo-Bergen, and Oslo-TromsÝ is a multi day journey.
This was the way Norwegian grew so fast from nothing. They made money on these and other scandinavian trunk routes that they then spent on an ambitious expansion, unfortunately without creating a bit of a financial safety buffer in the process.
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Old 18th Nov 2020, 05:27
  #920 (permalink)  
 
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In other news, LH ops from LGW is resuming from March...

https://ukaviation.news/norwegian-pl...in-march-2021/
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