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Hard times for Norwegian

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Hard times for Norwegian

Old 13th Dec 2020, 21:15
  #1001 (permalink)  
 
Join Date: Apr 2020
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Well said Elephant and Castle!
If your an airline and you keep having to sell off your aircraft in order just to survive you clearly have a flawed business.
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Old 14th Dec 2020, 19:17
  #1002 (permalink)  
 
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TUI, Virgin and Easy are doing it. (sale and leaseback)
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Old 14th Dec 2020, 19:24
  #1003 (permalink)  
 
Join Date: Apr 2009
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I wouldn't read to much into WW's comments concerning Norwegian. They were likely made back when he was attempting to buy the airline.
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Old 14th Dec 2020, 21:59
  #1004 (permalink)  
 
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I flew Willie to Dublin around the time of the proposed takeover and we had him up on the flightdeck for a bit before the flight. I won’t go into great detail of the conversation but suffice to say the impression was given that the model was extremely niche and that had they completed any purchase most (not all) of the LH Ops would have been shut down immediately and the 787s deployed elsewhere in the group. Whatever noises made to the media that’s what came from the horse’s mouth off the record.
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Old 16th Dec 2020, 10:36
  #1005 (permalink)  
 
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Plastic787

Few doubt that WW would have closed many of Norwegians 787 routes, I have no idea about how successful these routes were, but one thing was clear is that a lot of BA traffic was bleeding across to Norwegian, some will have been geographical in choosing LGW over LHR, the flights were better value for money and the product was considered to be positive and I've flow on both.

WW would have closed the routes to protect its own margins, just as it tried to kill off Laker and Virgin.

Norwegian still seem intent on starting up LH again from LGW and yet i don't know one person who seriously sees how that can be achieved.
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Old 16th Dec 2020, 11:55
  #1006 (permalink)  
 
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From memory the Norwegian take over was attractive for IAG largely due to the latters much lower cost of capital. As alluded to above many LH routes would have been culled and aircraft would be transferred across the IAG group. Norwegian also had an attractive order book for aircraft. Once you refinanced the debt/offloaded it then Norwegian had a much lower cost base than some of the IAG opcos and would have been a good fit in the loco segment.
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Old 16th Dec 2020, 18:48
  #1007 (permalink)  
 
Join Date: Nov 2002
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On 15 December 2020, AerCap Holdings N.V. ("AerCap") has, through its wholly
owned subsidiary Ballyfin Aviation Limited, sold 41,605,161 shares in Norwegian
Air Shuttle ASA ("NAS"). Following this transaction, AerCap has, through certain
of its indirect wholly owned subsidiaries, as well as certain other companies in
which AerCap has an interest, an interest in a total of 177,893,106 ordinary
shares, representing approximately 4.5% of the share capital and voting rights
in NAS.

This explains why the shares are so volatile and under observation.

Of note is the fact Air Asia has also tabled a similar debt/equity swap .

AirAsia X (AAX), the long-haul unit of budget airline AirAsia Group, has proposed to reconstitute $15.3 billion of debt into a principal amount of 200 million ringgit ($48 million) and have the rest waived. The airline, which has posted losses since June 2019, said the alternative was to face liquidation with no returns to creditors. It is now seeking court approval to convene a meeting with creditors to vote on the scheme.
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Old 16th Dec 2020, 20:05
  #1008 (permalink)  
 
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Kirks gusset

Its under observation because its under court protection.
And a sale of 42 million shares is hardly substantial when the daily churn of Norwegian shares was in the the 1 to 1.5 billion last week and in the 500 million this week:
https://live.euronext.com/nb/product...-XOSL/overview
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Old 17th Dec 2020, 12:29
  #1009 (permalink)  
 
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EIFFS

The elephant in the room with that argument being that BAs profits had been increasing every year since Norwegian started LH Ops. They can’t have been that much of a thorn in the side. The reason they would have canned most the LH routes is that they weren’t profitable and BA could have made more money doing it themselves.
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Old 17th Dec 2020, 13:15
  #1010 (permalink)  
 
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Can say that a few Norwegian trips from LGW - DEN were a significant improvement on the BA offering from LHR - DEN (comparing Norwegians Premium class with BAs Economy Plus) and about the same price at £1800 for the round trip. To get the same standard with BA (Club World) was about £4000.00.
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Old 17th Dec 2020, 14:03
  #1011 (permalink)  
 
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Thatís not in question and has been raised on this forum when it worked, it worked well.
There are, however, thousands of disgruntled passengers who were left to fend for themselves when things went wrong.
Everything was outsourced and the ground handling staff just couldnít cope.
I witnessed this on many occasions.
Pay peanuts...,
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Old 17th Dec 2020, 14:14
  #1012 (permalink)  
 
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Dave Gittins

Yet the financial failure of such flights just proves the point that they were selling the product below cost. You might argue that BA overcharged but at least it was more realistic for making money. Norwegian were trading profitability for future market share and you leaped at it, as most people would. But if they’d ever achieved that market share you’d better believe those prices would have been a thing of the past.
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Old 17th Dec 2020, 15:14
  #1013 (permalink)  
 
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No doubt Norwegians'd premium class offers a nice recliner seat often at competitive prices but I don't think it's comparable to a fully flat business class seat to be honest.
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Old 17th Dec 2020, 21:27
  #1014 (permalink)  
 
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The management of Norwegian must be both relieved over that all their proposals where approved by the shareholder general meeting today, and also disappointed that only shareholders representing less than 2% of the stock actually bothered to vote. That do not show neither shareholder interest in the future of the company nor potential for collecting much extra capital from same. Also thought provoking that the chairman of the board only could muster up voting rights for 34 million out of a total of 3.7 billion shares to ensure the proposals was voted through.
Many small shareholders are blocked from voting by the way they hold their share through financial institutions but if this is representative then less than 2 million Euro would have bought you a blocking stake in the company.

Last edited by vikingivesterled; 17th Dec 2020 at 21:40.
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Old 17th Dec 2020, 21:40
  #1015 (permalink)  
 
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The management of Norwegian must be both relieved over that all their proposals where approved by the shareholder general meeting today, and also disappointed that only shareholders representing less than 2% of the stock actually bothered to vote. That do not show neither shareholder interest in the future of the company nor potential for collecting much extra capital from same. Also thought provoking that the chairman of the board only could muster up voting rights for 34 million out of a total of 3.7 billion shares to ensure the proposals was voted through.
Many small shareholders are blocked from voting by the way they hold their share through financial institutions but if this is representative then less than 2 million Euro would have bought you a blocking stake in the company.
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Old 17th Dec 2020, 22:08
  #1016 (permalink)  
 
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Is this 80% of the 2%?
"Norwegian Air Shuttle ASA (the “Company”) is pleased to announce that the
Extraordinary General Meeting (EGM) voted in favor of all proposed resolutions.
The Company achieved over 80% votes in favor of the proposed rights issue.
With respect to the subscription rights, the last day the shares are traded
including the rights, together with the corresponding ex-date and record date,
shall be set by the board of directors following the determination of the
subscription price.

Fornebu 17 December 2020

Norwegian Air Shuttle ASA"

Last edited by Kirks gusset; 17th Dec 2020 at 22:49.
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Old 17th Dec 2020, 22:10
  #1017 (permalink)  
 
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Plastic787

Wondering how you know which flights were a “financial failure”. Did Willie tell you that as well?

By all accounts, the majority of LGW-US routes were successful by the back end of 2019. There were many questionable decisions and unprofitable parts of the business but LGW long haul wasn’t one of them.
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Old 17th Dec 2020, 22:28
  #1018 (permalink)  
 
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Originally Posted by Kirks gusset View Post
Is this 80% of the 2%?
Yes,
see attachement (vedlegg in pdf) of https://newsweb.oslobors.no/message/520947
Between 44 and 63 million shares voted for each resolution and between 1 and 18 million against.
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Old 18th Dec 2020, 10:40
  #1019 (permalink)  
 
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Vokes55

I know for a fact that Denver and Chicago to name two were massive loss makers, Singapore (not US obv but proves the point) was so successful it lasted a matter of months. The rest were marginally profitable in summer and a big drain in winter, similar to low fare long haul full stop. IAG took one look at the books and walked away saying “nah thanks”. That’s the reality. You can beat the drum as much as you like saying that they had bums on seats but ignore the yield totally forgetting it’s not load factor but profitability that determines success and a profitable operation. Every financial analyst bar none says that Norwegian’s problems began and ended with the 787 misadventure. I get that you wanted it to work and I admire the passion - believe me despite flying BA’s jets I have no love for this company and would love to be in a place where I could feel that again too - but financial reality has bitten hard and if the Gatwick 787s ever take the air again it will be because some other fool with too much money has decided to part with their senses and is being taken for a ride.

There is a reason O’Leary and the Orange lot haven’t touched Long Haul with a barge pole and it’s not because they’re feeling charitable towards BA..

Last edited by Plastic787; 18th Dec 2020 at 10:50.
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Old 18th Dec 2020, 11:47
  #1020 (permalink)  
 
Join Date: Mar 2018
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I would disagree with a few points here:
BA didn't just look at the books and walked away. There are also some that say the complicated company structure was one of the biggest obstacles. And I would agree to that to a certain point. Old Management were setting up a too complicated structure. I have much more faith in the new management that seemed to try to clean up the mess.
The JFK and LAX flights were profitable to my knowledge. Have also a look at the revenue per origin of pax. second place after scandi is the US market. Problematic were most likely the huge amount of aircraft they ordered, plus the big amount of issues they had with the RR engines and the subsequent cancelations. it was a deep spiral which the new management tried to escape from. but then corona came along.
Also regarding O'leary: He is not the Guru of Aviation. Many times he predicted the bankruptcy and it didn't come along. He can be wrong as well.
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