Hard times for Norwegian
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Paul737,
Scandinavian bases are not If norwegian goes bust, only a loss making state run company like SAS will have bases in Scandinavia. I doubt that Noway or any other country will be in a rush to set up another company with public money to compete against SAS, and the other possibility left will be that RYR, or similar, will take whatever part of the business they see fit, and with the employment conditions that they see fit, including basing their crews well away from Scandinavia.
Scandinavian bases are not If norwegian goes bust, only a loss making state run company like SAS will have bases in Scandinavia. I doubt that Noway or any other country will be in a rush to set up another company with public money to compete against SAS, and the other possibility left will be that RYR, or similar, will take whatever part of the business they see fit, and with the employment conditions that they see fit, including basing their crews well away from Scandinavia.
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No, quite honestly the survival of Norwegian is not in everybody's interest. Yes, the market will undoubtedly be flooded with out of work pilots, it started already a year ago and it will accelerate now of course. However, keeping a business zombie alive will endanger more jobs in viable carriers that have to compete against an artificially kept afloat one. Consolidation in Europe is necessary and overdue, and that does mean that only a few big carriers survive plus a few niche and ACMI carriers. If Norwegian leaves the market, there is a certain part of the market not served anymore, and other carriers will move in and do that, meaning the big carriers will either not downsize as much or even grow a bit initially, and a lot in the long run, generating stable jobs.
Yes, i feel for the employees, i've been in a similar situation, and yes, unemployment sucks. A lot. However, i would wish them to get good jobs in the future without the daily worry if the carrier will go under next winter or not. And that will be easier if more stable carriers can move into the void of an imploding Norwegian.
That said, the decisions will be taken elsewhere, and i seriously doubt any internet petition will change anything one way or another.
Yes, i feel for the employees, i've been in a similar situation, and yes, unemployment sucks. A lot. However, i would wish them to get good jobs in the future without the daily worry if the carrier will go under next winter or not. And that will be easier if more stable carriers can move into the void of an imploding Norwegian.
That said, the decisions will be taken elsewhere, and i seriously doubt any internet petition will change anything one way or another.
Best of luck....
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SAS has been bailed out 4 or 5 times and was finally getting better. If they can get it right after a crisis with a bit of government help, so can Norwegian. Still hoping for the best. We need some good news in european aviation!
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SAS = Debt 50 billion swedish kr. Equity 4.4 billion. Don't come here and spout drivel. How many loan guarantees from the scandi governments were issued between 2008 and 2012 to save SAS? Norwegian might be in trouble, but SAS is right behind them.
Last edited by uncle-traveling-matt; 19th Apr 2020 at 17:47.
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If Norwegian employed their staff under Norwegian contracts, paid Norwegian tax, and domiciled their cash in Norway as per their deceptive namesake, then by all means they'd have the right to ask the Norwegian government for a bailout (regardless of if they operated JFK-CDG, or TFS-MUC).
However, they didn't. They opted to use as many legal loopholes as possible (not ethical, but legal) to minimize the burden on the company at the expense of the staff and pay as little tax as possible.
Now, when times are tough, they want taxpayer cash. Absolutely NOT!
This is called the chickens coming home to roost.
Playing silly buggers by operating multiple AOC's, employing some staff on third world contracts, and now expecting the same country you've tried to unethically swindle to hand over cash? Tough salami.
However, they didn't. They opted to use as many legal loopholes as possible (not ethical, but legal) to minimize the burden on the company at the expense of the staff and pay as little tax as possible.
Now, when times are tough, they want taxpayer cash. Absolutely NOT!
This is called the chickens coming home to roost.
Playing silly buggers by operating multiple AOC's, employing some staff on third world contracts, and now expecting the same country you've tried to unethically swindle to hand over cash? Tough salami.
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Made on the backs of cheap sub contracted labour, now threatening your very own existence! X fly, Cityjet, Nordica ...Your own CEO is trying to replace you, all the while SAIL is taking over more and more of your network. Upgrades on forced part time during winter, variable rosters. The list is endless.
SAS = Debt 50 billion swedish kr. Equity 4.4 billion. Don't come here and spout drivel. How many loan guarantees from the scandi governments we're issued between 2008 and 2012 to save SAS? Norwegian might be in trouble, but SAS is right behind them.
SAS = Debt 50 billion swedish kr. Equity 4.4 billion. Don't come here and spout drivel. How many loan guarantees from the scandi governments we're issued between 2008 and 2012 to save SAS? Norwegian might be in trouble, but SAS is right behind them.
How many loan guarantees for SAS? I know there was 2. The first payed of with a significant financial gain for the government and therefore the tax payer. The 2nd was never used by SAS.
The Corona loan guarantee given to SAS (this one also not used) by the Norwegian government has the exact same conditions as Norwegians and Widerře...
For the sake of the crews in NAS I wish for a good outcome. Be safe and healthy.
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Norwegian Air’s Paradox: Strong COVID-19 Recovery, If It Avoids Bankruptcy Bu Forbes
Last edited by victorpapa; 19th Apr 2020 at 17:56. Reason: Add title
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If Norwegian employed their staff under Norwegian contracts, paid Norwegian tax, and domiciled their cash in Norway as per their deceptive namesake, then by all means they'd have the right to ask the Norwegian government for a bailout (regardless of if they operated JFK-CDG, or TFS-MUC).
However, they didn't. They opted to use as many legal loopholes as possible (not ethical, but legal) to minimize the burden on the company at the expense of the staff and pay as little tax as possible.
Now, when times are tough, they want taxpayer cash. Absolutely NOT!
This is called the chickens coming home to roost.
Playing silly buggers by operating multiple AOC's, employing some staff on third world contracts, and now expecting the same country you've tried to unethically swindle to hand over cash? Tough salami.
However, they didn't. They opted to use as many legal loopholes as possible (not ethical, but legal) to minimize the burden on the company at the expense of the staff and pay as little tax as possible.
Now, when times are tough, they want taxpayer cash. Absolutely NOT!
This is called the chickens coming home to roost.
Playing silly buggers by operating multiple AOC's, employing some staff on third world contracts, and now expecting the same country you've tried to unethically swindle to hand over cash? Tough salami.
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Forbes article is assuming flying post-COVID will be normal and we still don’t know that. Most probably it will take a lot to recover “normality”.
It also states: As Norwegian restructures, it may rely on its original market's where it is better known and financial performance is strong. Norwegian gained wider attention for its global that did not come close to Norway or anywhere in Scandinavia: London to Rio de Janeiro, Rome to Los Angeles.
A word to the wise...
I still fail to see how a market after COVID can give you a strong recovery but at the same time in the same market the creditors will be stuck with an asset that will not be in high demand as aviation suffers from over-capacity in the near future (if they don't accept Jacob's plan)
It also states: As Norwegian restructures, it may rely on its original market's where it is better known and financial performance is strong. Norwegian gained wider attention for its global that did not come close to Norway or anywhere in Scandinavia: London to Rio de Janeiro, Rome to Los Angeles.
A word to the wise...
I still fail to see how a market after COVID can give you a strong recovery but at the same time in the same market the creditors will be stuck with an asset that will not be in high demand as aviation suffers from over-capacity in the near future (if they don't accept Jacob's plan)
Last edited by Paul737; 19th Apr 2020 at 19:01.
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You think that the Norwegian taxpayer should be on the hook to save this airline?
The same airline with 7 AOC's and has 70% of their fleet registered overseas?
The same airline that domiciles as much of their European fleet as possible in Ireland specifically to evade Norwegian tax?
The same airline that employed crew on Thai contracts to avoid Norwegian employer obligations?
It's completely facetious to claim that these things are only necessities and not calculated methods of skirting their ethical obligations to save as much money as possible.
Now it's the Norwegian taxpayer's obligation to save this airline? Yeah, no.
NAS shares are down from almost $40 two years ago, to $0.50, with staggering debt. The writing is on the wall, as every sensible investor has agreed. Even Bjorn Kjos has pulled the rip cord and ejected. Judging by the recent stock performance there's not even a murmur of confidence in the operation.
If the Norwegian government should bail the airline out, it should be the Norwegian part of the operation only. If NAI needs saving, that's Dublin's prerogative; the same with NUK being London's problem. The Norwegian government shouldn't give a toss about British punters flying from LGW-JFK.
They've clearly tried to milk the fluidity of their Norwegian name to their advantage, however in these trying times it has come back to bite them on their backside. They could have easily distinguished their separate AOC's with different distinctive brands (without the Norwegian name), but opted not to. This is a mess of their own making.
The same airline with 7 AOC's and has 70% of their fleet registered overseas?
The same airline that domiciles as much of their European fleet as possible in Ireland specifically to evade Norwegian tax?
The same airline that employed crew on Thai contracts to avoid Norwegian employer obligations?
It's completely facetious to claim that these things are only necessities and not calculated methods of skirting their ethical obligations to save as much money as possible.
Now it's the Norwegian taxpayer's obligation to save this airline? Yeah, no.
NAS shares are down from almost $40 two years ago, to $0.50, with staggering debt. The writing is on the wall, as every sensible investor has agreed. Even Bjorn Kjos has pulled the rip cord and ejected. Judging by the recent stock performance there's not even a murmur of confidence in the operation.
If the Norwegian government should bail the airline out, it should be the Norwegian part of the operation only. If NAI needs saving, that's Dublin's prerogative; the same with NUK being London's problem. The Norwegian government shouldn't give a toss about British punters flying from LGW-JFK.
They've clearly tried to milk the fluidity of their Norwegian name to their advantage, however in these trying times it has come back to bite them on their backside. They could have easily distinguished their separate AOC's with different distinctive brands (without the Norwegian name), but opted not to. This is a mess of their own making.
Forbes article is assuming flying post-COVID will be normal and we still don’t know that. Most probably it will take a lot to recover “normality”.
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MDS,
Unfortunately, Norway cannot cherry pick which parts of the company to bail out because it's just one company, and its massive debt bonds are issued to that one company, the same as its shareholders and stock listings are just to one single entity, regardless of how many AOC's, European bases, or foreign staff they have in their network for operational reasons.
This is why the creditors must either believe in their whole project or not. And the same for a public bail out. Otherwise it simply does not make any sense because they would carry on an enormous debt to just keep a miniscule part of the operation, and that's just not worth it financially.
Also, if they bail out norwegian but only want the actual Nordic part, they will have to dismiss so much staff across their multiple bases (along with their severance packages) that would make it very difficult for them to start up again.
Again, it's either the whole package, or bankruptcy, and then YES. You can now pick up the pieces you want along with any other parties to create whatever you wish.
Unfortunately, Norway cannot cherry pick which parts of the company to bail out because it's just one company, and its massive debt bonds are issued to that one company, the same as its shareholders and stock listings are just to one single entity, regardless of how many AOC's, European bases, or foreign staff they have in their network for operational reasons.
This is why the creditors must either believe in their whole project or not. And the same for a public bail out. Otherwise it simply does not make any sense because they would carry on an enormous debt to just keep a miniscule part of the operation, and that's just not worth it financially.
Also, if they bail out norwegian but only want the actual Nordic part, they will have to dismiss so much staff across their multiple bases (along with their severance packages) that would make it very difficult for them to start up again.
Again, it's either the whole package, or bankruptcy, and then YES. You can now pick up the pieces you want along with any other parties to create whatever you wish.
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This Reuters article shows that the lease companies may feel a bit compromised and have little choice, although of interest is the statement:
https://www.reuters.com/article/us-n...-idUSKBN21Z2V5
"A source close to one of the lessors described the talks as a “long shot”, while conceding that collapsed aircraft demand could work in the deal’s favour. “If we had somewhere else to move our planes, it would be liquidation,” the person said. Could be gossip, but if true suggests they would happily pull the plug if market conditions allowed.
What NAS need a huge credit line, wad of cash and a bit of luck...it would be a shame to see another newish player wiped out by reckless management, having said that the NAS management did try and address the problems in 2019, maybe a little too late..At least the re-structuring, plan closing Spanish bases and concentrating on LH ops profitability models may reap the rewards given their fuel price advantages.
https://www.reuters.com/article/us-n...-idUSKBN21Z2V5
"A source close to one of the lessors described the talks as a “long shot”, while conceding that collapsed aircraft demand could work in the deal’s favour. “If we had somewhere else to move our planes, it would be liquidation,” the person said. Could be gossip, but if true suggests they would happily pull the plug if market conditions allowed.
What NAS need a huge credit line, wad of cash and a bit of luck...it would be a shame to see another newish player wiped out by reckless management, having said that the NAS management did try and address the problems in 2019, maybe a little too late..At least the re-structuring, plan closing Spanish bases and concentrating on LH ops profitability models may reap the rewards given their fuel price advantages.
Last edited by Kirks gusset; 19th Apr 2020 at 19:55.
Unfortunately, Norway cannot cherry pick which parts of the company to bail out because it's just one company, and its massive debt bonds are issued to that one company, the same as its shareholders and stock listings are just to one single entity, regardless of how many AOC's, European bases, or foreign staff they have in their network for operational reasons.
A source close to one of the lessors described the talks as a “long shot”, while conceding that collapsed aircraft demand could work in the deal’s favour. “If we had somewhere else to move our planes, it would be liquidation,” the person said. Could be gossip, but if true suggests they would happily pull the plug if market conditions allowed.
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[QUOTE=SWBKCB;10755906]So how does this stack up with the ownership requirements for the various AOC's?
The requirements don't change. Many airlines have different AOC's and registrations, but doesn't make them different entities when it comes to ownership. Even SAS has bases in continental Europe and an irish AOC for operational reasons.
And don't get me wrong. It may very well be that norwegian indeed goes bust and is then reborn as a Nordic player with just 737's. But that's not a bail out or a a debt to equity swap as it's being discussed right now. It'll be a full rebirth of something else, although with maybe even the same planes, part of the Nordic staff and even the same brand if the creditors get a fair price in liquidation.
The requirements don't change. Many airlines have different AOC's and registrations, but doesn't make them different entities when it comes to ownership. Even SAS has bases in continental Europe and an irish AOC for operational reasons.
And don't get me wrong. It may very well be that norwegian indeed goes bust and is then reborn as a Nordic player with just 737's. But that's not a bail out or a a debt to equity swap as it's being discussed right now. It'll be a full rebirth of something else, although with maybe even the same planes, part of the Nordic staff and even the same brand if the creditors get a fair price in liquidation.
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MDS, can we stick to facts here please?
- There are 5 AOC's in the Norwegian group not 7!
- You claim that 70% of the fleet is based in Ireland for tax purposes, again nowhere close and it isn't for tax purposes. As Norway isn't an EU member, an EU AOC was required to get access to long haul markets hence NAI was set up. NAI however, was always supposed to be a Swedish operation based on the old flyNordic AOC which was kept dormant for that purpose once the takeover was completed. However, banking regulations in place in Sweden at the time had a clause that stated that in case of airline bankruptcies, the guarantors had no right to reposess their airframes which was something that the Americans had a problem with given that the aircraft order was facilitated by US ExIm financing, thus Sweden was no longer possible. Pretty much the only choice left then was Ireland and NAI was set up as an Irish operation. Since then, said banking regulation has been removed from Swedish law and NAI has now been downsized somewhat in favour of the Swedish AOC with over half the NAI fleet being placed there.
- Thai crews being employed on the cheap? The BKK base is no more! Say no more...
I fail to see the points you're trying to make! Lufthansa is being bailed out by the German government despite the Lufthansa Group consisting of several AOC's, several airlines mainly on non-German AOC's. SAS is being bailed out by Sweden, Denmark and Norway including their SAIL operation. The Polish government is bailing out LOT, despite the fact that the operation isn't only Poland based, TUI is being bailed out by the German government and what proportion of the operation is German based? etc etc... Multinational airlines with transnational operations consisting of several AOC's are widespread so that particular argument doesn't wash with me!
I will agree that mistakes have been made, but these were made by the previous regime that has now been replaced with seasoned professionals at the helm. Not airline managers no, but the so-called airline managers nearly ran the company in the ground. Having a retail specialist in charge that is an expert in branding is exactly what the company needs, boosting ancillary revenue is exactly what's needed, especially to make low cost long haul a success. Let's not write the company off just yet!
- There are 5 AOC's in the Norwegian group not 7!
- You claim that 70% of the fleet is based in Ireland for tax purposes, again nowhere close and it isn't for tax purposes. As Norway isn't an EU member, an EU AOC was required to get access to long haul markets hence NAI was set up. NAI however, was always supposed to be a Swedish operation based on the old flyNordic AOC which was kept dormant for that purpose once the takeover was completed. However, banking regulations in place in Sweden at the time had a clause that stated that in case of airline bankruptcies, the guarantors had no right to reposess their airframes which was something that the Americans had a problem with given that the aircraft order was facilitated by US ExIm financing, thus Sweden was no longer possible. Pretty much the only choice left then was Ireland and NAI was set up as an Irish operation. Since then, said banking regulation has been removed from Swedish law and NAI has now been downsized somewhat in favour of the Swedish AOC with over half the NAI fleet being placed there.
- Thai crews being employed on the cheap? The BKK base is no more! Say no more...
I fail to see the points you're trying to make! Lufthansa is being bailed out by the German government despite the Lufthansa Group consisting of several AOC's, several airlines mainly on non-German AOC's. SAS is being bailed out by Sweden, Denmark and Norway including their SAIL operation. The Polish government is bailing out LOT, despite the fact that the operation isn't only Poland based, TUI is being bailed out by the German government and what proportion of the operation is German based? etc etc... Multinational airlines with transnational operations consisting of several AOC's are widespread so that particular argument doesn't wash with me!
I will agree that mistakes have been made, but these were made by the previous regime that has now been replaced with seasoned professionals at the helm. Not airline managers no, but the so-called airline managers nearly ran the company in the ground. Having a retail specialist in charge that is an expert in branding is exactly what the company needs, boosting ancillary revenue is exactly what's needed, especially to make low cost long haul a success. Let's not write the company off just yet!
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Norwegian Air Creditors May Have No Choice But to Accept Offer
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...or pull the plug on impractical reality...because it's hard trying to make chickensalad out of chickensh|t. The share price is down 85% and market value is about $84 million. And that's below the value of just one (1) Dreamliner. Go figure.