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Hard times for Norwegian

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Hard times for Norwegian

Old 8th Mar 2020, 21:58
  #101 (permalink)  
 
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Originally Posted by directmisbi View Post
Card aquirers have a hold back of almost 100 percent. Funds are released on the day pax are travelling. This has been the situation for more than a year. Receivables are standing at more than 11 billion nok. These are insane numbers and any normal company would have been bust long time ago if it wasn't for the work of a brilliant CFO. It that context it can't really get worse, only better. Recent analysis from HSBC (Andrew Lobbenberg) estimate that even in their Corona ”high impact scenario”Norwegian woule ”..still be able to meet the book equity and liquidity covenants..”
Norwegian are already in battle mode with most of the network on part-time, recruitment freeze, and a absolute minimum expenditure across the network. Something most companies are only starting to implement under a lot more stressful circumstances.
Please also consider the fact that Norwegian are almost unhegded on fuel, another great advantage towards it's peers.
Lastly, I would like to point out that Norwegian has 18 max on the ground and (as the only company, something most Scandinavian analytics have forgotten) not received a single dime from Boeing yet. Negotiations are ongoing and a large cash amount are expected.
If this is not enough, professional investors can see through all of this, and think 6 months ahead..
Everybody loves an optimist.
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Old 9th Mar 2020, 12:19
  #102 (permalink)  
 
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Lastly, I would like to point out that Norwegian has 18 max on the ground and (as the only company, something most Scandinavian analytics have forgotten) not received a single dime from Boeing yet.
Why do you think that is...

Norwegian is already on a “stop sales” with a lot of travel agencies. They don’t book them anymore in a package as they are responsible. Not a very good sign.
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Old 9th Mar 2020, 17:01
  #103 (permalink)  
 
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Originally Posted by SaulGoodman View Post
Why do you think that is...

Norwegian is already on a “stop sales” with a lot of travel agencies. They don’t book them anymore in a package as they are responsible. Not a very good sign.
the quality news outlets (not U.K. tabloids) seem to agree:

https://mobile.reuters.com/article/amp/idUSKBN20W1Z4
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Old 9th Mar 2020, 18:37
  #104 (permalink)  
 
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At least oil is down significantly, I would imagine norwegian are not hedged to a large amount, ironically this has saved a few carriers in the past, the big boys have spare cash to hedge, but end up hedging at a very high price.
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Old 9th Mar 2020, 19:38
  #105 (permalink)  
 
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Originally Posted by UAV689 View Post
At least oil is down significantly, I would imagine norwegian are not hedged to a large amount, ironically this has saved a few carriers in the past, the big boys have spare cash to hedge, but end up hedging at a very high price.

to be honest a drop in aviation fuel is welcomed but it's not if sufficient magnitude or even timing to help some airlines out of the mire.
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Old 9th Mar 2020, 20:30
  #106 (permalink)  
 
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anybody who can explain this from the reuters article? Why would this be the benchmark for potential problems in an airline. There is much more than only debt/earning ratios. What would be a problematic ratio and what is the ratio for Norwegian and flybe just before it went under.

A three-month shutdown would inflate Air France-KLM's net debt to 7.7 times earnings, Citi calculates, and swell Lufthansa's multiple to 12.4.
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Old 9th Mar 2020, 20:44
  #107 (permalink)  
 
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Originally Posted by rotorwills View Post
to be honest a drop in aviation fuel is welcomed but it's not if sufficient magnitude or even timing to help some airlines out of the mire.

And even then, a lot of airlines hedge their fuel so it won’t make much of a difference.
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Old 9th Mar 2020, 21:19
  #108 (permalink)  
 
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Originally Posted by teamax View Post
Everybody loves an optimist.
Do you understand Norwegian? There is a press conference announced tomorrow with the Prime Minister of Norway, and Minister for Finance. If not, I can inform you that you will find the red noses flying in and out of an airport near you, also after Covid19.
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Old 9th Mar 2020, 23:08
  #109 (permalink)  
 
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Originally Posted by ReturningVector View Post
And even then, a lot of airlines hedge their fuel so it won’t make much of a difference.
Due to hedging, the drop in price might even cost some airlines money - they have hedged (e.g. bought forward) fuel at prices higher than the current price that they no longer need.

They will have to close those futures contract out at a loss.
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Old 9th Mar 2020, 23:49
  #110 (permalink)  
 
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The chairman of Finnair once said that given the choice of a low oil price or a strong economy, he'd take the strong economy.
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Old 9th Mar 2020, 23:52
  #111 (permalink)  
 
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Originally Posted by marchino61 View Post
Due to hedging, the drop in price might even cost some airlines money - they have hedged (e.g. bought forward) fuel at prices higher than the current price that they no longer need.

They will have to close those futures contract out at a loss.
Cathay and Delta both lost money on their hedges when oil prices dropped in recent years.

Delta even bought a refinery which it later sold at a loss:

https://www.forbes.com/sites/danielr.../#37f79231c198
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Old 10th Mar 2020, 07:02
  #112 (permalink)  
 
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They’ve just stopped all flights to Italy (Norwegian)
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Old 10th Mar 2020, 07:43
  #113 (permalink)  
 
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Originally Posted by uncle-traveling-matt View Post
Do you understand Norwegian? There is a press conference announced tomorrow with the Prime Minister of Norway, and Minister for Finance. If not, I can inform you that you will find the red noses flying in and out of an airport near you, also after Covid19.
What did they say?
Will they use state funding to keep them in the air?
If so, which part of Norwegian? Swedish, Norwegian, International, Irish (if that part still excists), Argentinian?
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Old 10th Mar 2020, 13:22
  #114 (permalink)  
 
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News just out.

Norwegian to cancel 3000 flights and slash a “major part” of its workforce.

press release in the link below

https://media.uk.norwegian.com/press...vid-19-2980473

Last edited by dcoded; 10th Mar 2020 at 13:37.
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Old 10th Mar 2020, 13:24
  #115 (permalink)  
 
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Originally Posted by dcoded View Post
News just out.

Norwegian to cancel 3000 flights and slash a “major part” of its workforce.

press release in the link below, in Swedish however.

https://media.se.norwegian.com/press...vid-19-2980501
Is there a link to an English version
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Old 10th Mar 2020, 13:37
  #116 (permalink)  
 
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Originally Posted by Black Pudding View Post
Is there a link to an English version

updated my post with English press release
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Old 10th Mar 2020, 14:04
  #117 (permalink)  
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This represents approximately 15 percent of the total capacity for this period
So much less that Lufthansa , Qantas or Air France announced the last days for instance . I do not really see this as sign that the airline is in deep financial trouble, but rather something most European airlines are or will be doing .
That said I am not a financial expert and have no inside knowledge of Norwegian financial situation ...
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Old 10th Mar 2020, 14:07
  #118 (permalink)  
 
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Originally Posted by SaulGoodman View Post

in other news: Wizzair financial position also far from rosy. Not a great time...
Do you have a source, I have not seen any evidence to suggest that is true?
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Old 10th Mar 2020, 14:51
  #119 (permalink)  
 
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Originally Posted by Porto Pete View Post
Do you have a source, I have not seen any evidence to suggest that is true?
Looking at the cash balance (1billion EUR+), many companies would like to be in the same situation... A few perks will be trimmed (no fixed roster for the new joiners, floating pilots extra 1000EUR allowance gone, no more extra payment for random roster) to preserve this.
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Old 10th Mar 2020, 15:05
  #120 (permalink)  
 
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Hopefully, a bit of good news.

https://www.reuters.com/article/us-h...-idUSKBN20X1UQ
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