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-   -   Hard times for Norwegian (https://www.pprune.org/rumours-news/625175-hard-times-norwegian.html)

aircowboy 11th Sep 2019 20:16

It looks like Norwegian wants to push Sissener using the media

sarah737 11th Sep 2019 21:06


Originally Posted by directmisbi (Post 10567715)
the CFO still guiding the markets of a full year operating result 2019 with a 100 percent improvement compared to last year. I call that very impressive..

Would you call the H1 figures, 1,4 billion NOK loss compared to a 0,3 billion profit last year, also very impressive?
What I call very impressive is the debt which doubled in six months time!
Increasing debt, defaulting bonds, not looking good at all.





Doors to Automatic 11th Sep 2019 21:25

The Q3 results will be very interesting. It is difficult to see how the airline will break even, never mind generate the profits needed to see off the duff quarters. Revenues are broadly flat whilst seat costs are expected to be up around 20% on last year.

NEDude 12th Sep 2019 05:31

It is looking like the bond holders will approve the extension:

https://newsweb.oslobors.no/message/484994

Ancient Mariner 12th Sep 2019 12:23

NAS shares up 10.11% today.
Per

oceancrosser 12th Sep 2019 15:34


Originally Posted by NEDude (Post 10567970)
It is looking like the bond holders will approve the extension:

https://newsweb.oslobors.no/message/484994

Like bondholders really have a choice: deny the extension=bankruptcy. All is lost.
Approve the extension=(possible) bankruptcy. All may be lost...

WHBM 12th Sep 2019 17:24

I'm waiting for Airport Coordination Ltd, the Gatwick slot managers, to announce that slots cannot just be transferred off to any old non-aviation organisation. The last thing we want is financial industry intermediaries (these bond organisations and others) inserting themselves, and their margins, into the slot trading process.

Doors to Automatic 12th Sep 2019 22:05


Originally Posted by WHBM (Post 10568458)
I'm waiting for Airport Coordination Ltd, the Gatwick slot managers, to announce that slots cannot just be transferred off to any old non-aviation organisation. The last thing we want is financial industry intermediaries (these bond organisations and others) inserting themselves, and their margins, into the slot trading process.

I was thinking exactly the same today. Slots cannot be held as a commodity. They operate on “use it or lose it” basis, so unless they are transferred to another airline they are effectively worthless.

andrasz 13th Sep 2019 06:34


Originally Posted by Doors to Automatic (Post 10568612)
Slots cannot be held as a commodity

It may sound as legal hair splitting, but yes they can. It is not the slots themselves, but the potential proceeds of selling those slots to a third party which is the collateral. As long as NAS owns those slots, they can be sold to another airline, and the future income may be treated as an asset. I sure the wording of the deal will sound along the lines of NAS being obliged to sell those slots in case of a future bond default, the beneficiaries of the sale being the bondholders. Just another fine day for lawyers, should have become one ... :)


Joe le Taxi 13th Sep 2019 07:20

Greybull/Monarch was a precedent for this, wasn't it? As soon as an airline defaults on its debts and cannot renegotiate, it is bust, it loses its operating licence and it's slots are put back in the pot without recompense? The obvious solution is to have a fire sale of the slots prior to pulling the plug, but it would be tricky to convincingly keep the airline solvent while doing this. (Edit - I forgot that greybull did eventually get the slots on appeal, on the basis that some parts of monarch could still be considered an "air carrier")

The other parallel is Thomas cook's bond holders, who in the normal way would have first dibs on liquidation assets - and if they stood a good chance of selling on the most valuable assets - the slots - I very much doubt they would have agreed to the crippling D4E swap, which has the 2022 bonds trading at about 14c in the euro. Then you have the CDS market saying 'hang on a minute' - and what might initially seem like a simple shuffling around of debt, assets and equity, suddenly becomes fraught with problems

andrasz 13th Sep 2019 07:34


Originally Posted by Joe le Taxi (Post 10568832)
The obvious solution is to have a fire sale of the slots prior to pulling the plug, but it would be tricky to convincingly keep the airline solvent while doing this.

If I were a bondholder, I would only accept this proposal if there were an irrevocalbe offer from some other airline to buy those slots for a given price. Knowing the LGW slot market, I'd dare say such an offer is probably on the table.


Doors to Automatic 13th Sep 2019 10:02

I doubt the bondholders have much choice. It is potentially worthless slots or a worthless bond come December. As Trump once said to his lenders, “ If I owe you a million dollars, it is my problem; if I owe you one hundred million, it is your problem!”

I cannot imagine why the shares are surging at the moment. I would not be touching this company with a bargepole.

NEDude 13th Sep 2019 13:11


Originally Posted by Doors to Automatic (Post 10568975)
I doubt the bondholders have much choice. It is potentially worthless slots or a worthless bond come December. As Trump once said to his lenders, “ If I owe you a million dollars, it is my problem; if I owe you one hundred million, it is your problem!”

I cannot imagine why the shares are surging at the moment. I would not be touching this company with a bargepole.

From a neighbor who works at Norwegian, internally they are saying the re-structuring plan that was put in place for 2019 is meeting all the projected goals promised to the investors and creditors. Basically they had a best case projection, a worst case projection, and median projection, and they are apparently directly hitting all of the median projections. As he puts it, they are telling them things are still crucial, but the re-structuring is working as planned, so there is cautious optimism. Perhaps the share price is indicative of the investors seeing that information.

directmisbi 13th Sep 2019 13:41



Norwegian will deliver according latest analysts from SEB

We will see that when the Q3 figures are presented in October, and the company provides positive guidance for the challenging Q4 and Q1 periods. As the effects of consolidation from growth to profitability begin to hit in full, compensation from Boeing and Rolls Royce comes into account, wet lease of aircraft declines and one scaled-down winter program with its own planes begins, Norwegian will be on its way to profitability. Credit card issuers will release the 70% cash flow plug, provided that Q3 and guiding are delivered beyond expectation, and Norwegian is well placed to renegotiate credit terms. This can give almost normal credit card sales cash flow, when the important sales for the summer season 2020 are launched in late December, thus there will be no credit crunch and working capital under NOK 1.5 billion. The share issue ghost stays in the closet behind a locked door. CEO Geir Karlsen will deliver and had he not had faith in it himself, then the company would have already started a share issue or conversion of debt to equity to secure the company's position for the winter.

Ancient Mariner 13th Sep 2019 14:44

Up another 11.1% today.
Per

Doors to Automatic 13th Sep 2019 19:59

That SEB analysis looks a bit suspect IMHO. I cannot imagine how Q3 will “guide beyond expectations” when passengers and revenues are essentially flat (July and August stats) and seat costs are at least 10% but possibly 20% higher than last year (assuming they broadly follow Q1 and Q2 trends). Even then, when Q3 was profitable, the airline reported a robust loss for the year.

Even if the cost savings are realised the airline has a long way to go to break even.

NEDude 16th Sep 2019 14:31

Bond extension is officially approved.

https://business.financialpost.com/p...-relief-plan-2

JonEMA 16th Sep 2019 21:36

Norwegian defied gravity today as one of the few airlines stocks around the world not to get hammered by rising oil prices. In fact, DY rose over 2% on the news that it was one of the least hedged of all European airlines and set to lose out badly but that didn't put off Norwegian's bankers from propping up the share price in an attempt to keep the whole ridiculous venture going. I'm with Doors to Automatic, 3rd Quarter is going to be miserable and full-year results will see huge losses similar to last year. Quite how they can progress with no site of MAX returning and the urgent need for further 787 checks following last month's incident in Italy is beyond me.

Chugalug2 17th Sep 2019 19:40

If they want to sell the slots they need to get a move on. The Consumer and Marketing Authority is proposing an auction based, as against administratively allocated, airport slot system a la TOC's and Mobile Phone Channels:-

>d. Increased financial risks to airlines – in a sector that already has low operating profit margins, and given the cyclical nature of the airline industry, increasing costs may push the least efficient airlines out of business. While this may lead to a more efficient and effective market in the medium to long term, there may be unintended consequences from an aviation policy perspective. For example, if an airline went into administration, passengers are likely to face significant disruption. However, this risk could be mitigated by allowing airlines time to plan for a slot auction and being explicit about forward auction timetabling.<


https://assets.publishing.service.go...port-slots.pdf

JonEMA 22nd Sep 2019 12:11

More 787 groundings
 

Originally Posted by directmisbi (Post 10569169)


Norwegian will deliver according latest analysts from SEB

We will see that when the Q3 figures are presented in October, and the company provides positive guidance for the challenging Q4 and Q1 periods. As the effects of consolidation from growth to profitability begin to hit in full, compensation from Boeing and Rolls Royce comes into account, wet lease of aircraft declines and one scaled-down winter program with its own planes begins, Norwegian will be on its way to profitability. Credit card issuers will release the 70% cash flow plug, provided that Q3 and guiding are delivered beyond expectation, and Norwegian is well placed to renegotiate credit terms. This can give almost normal credit card sales cash flow, when the important sales for the summer season 2020 are launched in late December, thus there will be no credit crunch and working capital under NOK 1.5 billion. The share issue ghost stays in the closet behind a locked door. CEO Geir Karlsen will deliver and had he not had faith in it himself, then the company would have already started a share issue or conversion of debt to equity to secure the company's position for the winter.

https://www.thetimes.co.uk/article/rome-blowout-turns-up-heat-on-rolls-royce-s-trent-engine-nb6svvcs

​​​​​​What now for DY ?




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