To be even remotely able to ever pay off their debt, they need to be bigger than just a domestic airline in Norway. They need to be sizeable, not flying anything that wouldn't be profitable and be more lucky with everything they do (737MAX, RR engines etc)

Sounds like a good plan!
The problem is what to do in the mean time, before you get a sizeable market to operate 100 AC with a profit.
What do you suggest? Keep pouring in the money until some point in the future where they "will" make money?

Some rationale on how the Norwegian Gov thinks:

Today the shares started a steady slide and with the furlough of the Gatwick staff it's looking increasingly like the only option will be to save the Norway operation and cut off the limbs, if this is done through liquidation or a rapid re-structure remains to be seen.

Rather a comprehensive review but of course, just an opinion of a writer

dcoded

Doesn't that apply to just about any airline right now?

https://www.linkedin.com/posts/hans-...468247552-uspZ

It looks like help from the Government of Norway is on its way to ¿save the norwegian/scandinavian part of the company?

Under what conditions (restructuring?) will this help come?

With the very complex structure of the company it may be difficult to divide it up, kill off one part and save another. The clue is in the wording , the politicians have already objected to funding operations outside of Norway and appear to only want to support "internal operations".
The best to hope for now is to keep the "brand" alive by liquidating everything outside of Norway, OK so this shafts the shareholders that showed good will (no choice) in converting debts to shares, on the other hand, continuing to operate whilst insolvent could bring heavy penalties and liabilities that the Norwegian element will certainly want to avoid.( already hinted at by the CEO) , It may be possible to get shareholder agreement for their interests to be retained in a state supported Norway only operation, but this would mean them agreeing to effectively walk away with no functioning elements of the "old structure", of course all the 787 and surplus 737 would be permanently grounded in the "non trading" part of the new structure. The debts are so huge that even state support would not keep the whole operation alive and would require such large sums that other Norway based airlines could question.

Vokes55

Indeed it does!
But not all airlines came in to this crisis with +8bn USD in debts.

From the filed courtpapers in the case versus Boeing, Norwegian are claiming compensation due to the grounding of the max and resulting losses of over 1 billion dollars. Now if Norwegian
can get a bit of help from Norway, that will go a long way in getting Boeing to eventually cough up the compensation owed, continue the financial restructuring so brilliantly handled by the CFO until covid destroyed the market, and bring the company back to good health after the crisis.
Will be interesting to see how the leasing companies react, will they pitch in with their own money? Or walk away?
Much of their debt are hooked up to the 787 fleet. Due to the new IFRS rules, FUTURE leasing costs are a big part of this, so is maintenance and other capital costs. If they manage to offload the leased dreamliners (around half of their 787 fleet)back to their owners(the leasing companies) over half of their debt would be gone over night. This would again mean attracting investments and liquidity of which there are plenty available in the current capital markets.

Why are they going after Boeing? Surely RR?

There is already a contract in place for maintenance for 90 738s at least so I would say the spanish bases will survive or worst case scenario everyone transferred up to scandi and flying from there. Still Spanish government is also helping with the ERTEs so I believe Spain will survive along with scandi bases.

And all this because there is a contract in place for maintenance for 90 738s

Wishful and naive thinking only because you have a Spanish base. Pretty sure Norway is going to give money to save Spanish bases!!! 😂

And spanish based crew transferred to scandi ignoring the MSL right?

As soon as ERTEs FM are over Spanish bases are done

The major issue with support Norwegian is transparency. It has from the start had a complex and duplicitous business operating practice, a former CEO that "cannot remember "paying 500K in personal bonus just before the shares collapsed and the whole thing is like an Onion, the more you peel, the more you cry!
Look at their home-grown handling company in UK "RED HANDLING" company records showed they paid £637,546 in staff costs in 2018/19.. for 9 admin staff, no mention of other employees, in October 2020 the Norwegians appointed their own Directors, some of which are also Directors at NAS. They paid no UK tax as a company yet want the UK to support the furlough. One can't blame the Norwegian government for being cautious as this is clearly a management that works overtime to line it's own pockets.
The real shame is the loyal and professional crews seem oblivious and keep following the misguided actions of the company and will be left high and dry.
The Boeing maintenance contracts are handled under the "gold package" for 787s, and as these leases are stalled, so are the contracts, with essential maintenance charges being added as accrued debts ( agreed by Board and Shareholders in bail out)
Lufthansa Technik will only carry out maintenance on the 738s while they get paid.
It would be nice if the Spanish bases survived , cant see these crews being used in scan land though, doesn't make sense with the spare crews and capacity there already

My guess is that there will be a massive debt cut that the Norwegian government will ask for as a requirement to take over the majority of the company. I am sure it will be taken from the stock market and major restructuring will happen. When they are lucky they can get rid of at least half of the debts putting them into a good position for the future. While all major airlines are still negotiating with their staff, burning cash everyday and loosing their business clients on long term Norwegian can be the big winner of the crisis. Not to forget the court case against Boeing which will generate cash as well.

It’s not how the real world works. You cannot just delete the debt and continue like nothing happened.
You decide to delete the debt but elect to pocket the cash from Boeing? Which planet do you come from?
A lot of you are delusional, sorry to say.

Simple question. Should I book tickets with them for my flight to Orlando next year?

Yes. With the government hoping in like most other governments around the world doing the same they will be fine.

The kingdom of norway will make an offer to all creditors represented by a share price. Then it is basically on them to accept and secure at least some of their credits. if they deny they loose everything. Cede claims. And i live on planet earth ...

Creditors were burnt once, there is only so many times you can trick them.
They are better off selling the pieces and get it over with.

There are no tricks involved. Its about sound, financial judgement. When the creditors were lined up against the wall in the spring, they lost a lot of money accepting the debt to share conversion. Why? Because they were nice people? No, because the alternative presented an outcome with even greater losses. Given the current circumstances, a pandemic, they are faced with the same dilemma once again. Now, I think Norwegian will walk away from this pandemic, smaller, slimmer yes, but more agile and with a lot less debt..

I am not sure they will walk away at all.

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🤞

Wickerbill

Enlightening.
Getting rid of the debt is paramount. In its own absurd way, covid will see to that.

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.

Norwegian might well be saved for intra Norwegian services and some international ops ex Norway but anyone who seriously believes that they’ll 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.

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).

If NUK is a British company as you say then I can’t 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 it’s a very different industry at the moment and will be for the foreseeable future.

i hope Norwegian survive as it gives healthy competition but I’m not confident.

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?

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.

Much as I would like the people in NAS to all keep their jobs, the business model wasn’t 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 isn’t 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, it’s almost certain that you’ll be making less money, or none at all.

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.

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. It’s interesting how much freight you can carry on a “passenger” aeroplane but if you think of the load an individual seat is stressed for, it shouldn’t come as much of a surprise, really.

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

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.

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.

Its old news, but gives a clear indication of where things are heading:The end game now is all about reducing risk and exposure to counter claims.

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.

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.

If there is a market for it and money to be made rest assured that other operators will step in, see Ryanair, easyJet, etc

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-Tromsø 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.

In other news, LH ops from LGW is resuming from March...
:}
https://ukaviation.news/norwegian-pl...in-march-2021/