Calypso, you are entirely right. That's why I believe the Norwegian government would only bail out the 'Norwegian' part if anything. I don't expect any help from the French or UK government as for them the operation is relatively insignificant and does not add many benefits that they don't have already with the existing UK / French carriers. Except for the employees nobody gives a f**k about Norwegian in said countries.
Ford was considered 'too big to fail' and helping Honda UK was making economic and even more political sense at that time. Saving Norwegian does not fit either I am afraid. |
Originally Posted by fab777
(Post 10753982)
In france, this temporary furlough protection is not on the social security budget, but general state budget. Therefore, an airline which has been successfully at not paying taxes in this country is getting state help without contributing. This applies for other airlines, too.
Good for the crews, though. The furlough protection comes with some restrictions though: the employer can’t make anyone redundant and has to pay 70% of the salary. The French state will refund the 70%, but the refund is capped at 5500€. The question remains if the subsidiary has enough cash to pay the salaries... Should the French subsidiary go tits up, employees will be entitled to unemployment benefits in their country of residence which is not necessarily France even if they paid social security in France. |
Originally Posted by Tontito
(Post 10754147)
Norwegian crew work for a French subsidiary hence they fall under the furlough protection.
The furlough protection comes with some restrictions though: the employer can’t make anyone redundant and has to pay 70% of the salary. The French state will refund the 70%, but the refund is capped at 5500€. Should the French subsidiary go tits up, employees will be entitled to unemployment benefits in their country of residence which is not necessarily France even if they paid social security in France. |
Originally Posted by Luke258
(Post 10754061)
How do you even know they weren't paying taxes there? The Crews are paying taxes there as well as Social contributions. Why they shouldnt get anything in return now??
As 777 stated the furlough agreement was, originally, for French companies only. In the mean it has been changed to include airlines with bases in France to include easyJet crews who are still employed by EasyJet U.K, a British company. |
Originally Posted by Tommy Gavin
(Post 10754135)
Calypso, you are entirely right. That's why I believe the Norwegian government would only bail out the 'Norwegian' part if anything. I don't expect any help from the French or UK government as for them the operation is relatively insignificant and does not add many benefits that they don't have already with the existing UK / French carriers. Except for the employees nobody gives a f**k about Norwegian in said countries.
Ford was considered 'too big to fail' and helping Honda UK was making economic and even more political sense at that time. Saving Norwegian does not fit either I am afraid. There is no “Norwegian Part” to separate. Do you understand why the AOC’s are in place ? No benefits for other countries you say...as an example Norwegian carried 6 million brits last year, 4.5 million from Gatwick alone. Have you asked those passengers why they chose not to fly with BA ? If they are able to survive they will restructure without question. One fact remains, consumers are stuffed without choice. |
Originally Posted by vikdream
(Post 10754152)
Let me doubt it. If you pay Social Security in one country, you are entitled to protections in that country. That country might choose to transfer your money to another one, but third countries will not take responsibility when no money has been put in in the system, except for a few exceptions.
Here are quotes from the relevant EU law: A wholly unemployed person who, during his/her last activity as an employed or self-employed person, resided in a Member State other than the competent Member State and who continues to reside in that Member State or returns to that Member State shall make himself/ herself available to the employment services in the Member State of residence. and: The benefits provided by the institution of the place of residence under paragraph 5 shall continue to be at its own expense. However, subject to paragraph 7, the competent institution of the Member State to whose legislation he/she was last subject shall reimburse to the insti* tution of the place of residence the full amount of the benefits provided by the latter institution |
Originally Posted by 8che
(Post 10754184)
Have you asked those passengers why they chose not to fly with BA ?.
|
Originally Posted by RexBanner
(Post 10754219)
Probably because they liked being sold a product below cost. I don’t think it’s anything more complicated than that. Don’t get me wrong I actually hope Norwegian pull through eventually because it would be indicative of a wider upswing for the industry plus no one really wants or likes to see colleagues on the other side of the fence being put out of work into a desolate wasteland (which is what it’ll be post Covid). Realistically though the government package isn’t massive, how long is 3B Krona really going to last them even if they pull this last throw of the dice off? Genuine question here.
The parts of the company that suffers the most are the longhaul parts. That was true even before Corona. Selling tickets below cost will always be popular with the public, but this is putting pressure on everybody else. That was probably what they meant to do. This company is already split into pieces. Just kill the relevant AOCs and keep the core. Debt to shares in order to take on more debt, and no guarantee of a profitable future even if they can pull this off. The investors must be thrilled. |
How long?
Originally Posted by RexBanner
(Post 10754219)
Probably because they liked being sold a product below cost. I don’t think it’s anything more complicated than that. Don’t get me wrong I actually hope Norwegian pull through eventually because it would be indicative of a wider upswing for the industry plus no one really wants or likes to see colleagues on the other side of the fence being put out of work into a desolate wasteland (which is what it’ll be post Covid). Realistically though the government package isn’t massive, how long is 3B Krona really going to last them even if they pull this last throw of the dice off? Genuine question here.
Quick answer is probably not very long, the word is that long haul out of LGW was profitable, the bigger problem when will any airline be able to start flying again let alone long haul , who wants to travel to Spain let alone the US and South America. If they can pull off some form of deal with the Norwegian Government it will very much be about Norway not the UK, I think there will be a Norwegian going forward, but not as we know it now. |
Originally Posted by EIFFS
(Post 10754299)
Quick answer is probably not very long, the word is that long haul out of LGW was profitable, the bigger problem when will any airline be able to start flying again let alone long haul , who wants to travel to Spain let alone the US.
|
Originally Posted by 8che
(Post 10754184)
No benefits for other countries you say...as an example Norwegian carried 6 million brits last year, 4.5 million from Gatwick alone. Have you asked those passengers why they chose not to fly with BA ? If they are able to survive they will restructure without question. Don't get me wrong, I hope Norwegian survives with all its subsidiaries but one has to be realistic. |
Originally Posted by Tommy Gavin
(Post 10754361)
6 million pax on a total of roughly 180 million is not really significant. Not enough to expect a lifeline from UK government. TCX and FlyBe didn't get one so I strongly doubt the UK government will help out Norwegian. UK aviation market is one of the most competive markets around, with or without Norwegian.
Don't get me wrong, I hope Norwegian survives with all its subsidiaries but one has to be realistic. p.s the UK government are already assisting them by paying part of their UK employees salary from next month. The point is that the Norwegian government will want to see future healthy corporate tax revenue and options for Norwegian passengers. If one or more of the AOC's is deemed to assist in Norwegian Airlines profitability why on earth would you shut it down ? Unless you have no idea what the AOC gives you. |
Report from McKinsey this week had Aerospace and Air Travel as hardest hit sectors and that it would be six Quarters before LH returned to previous levels.
|
Originally Posted by ManaAdaSystem
(Post 10754274)
Not long. They have produced a report that claims it will be of benefit to Norway if they pay 12 billion. Not sure if they mean a direct payment to Norwegian or a loan guarantee. I’m pretty sure what they hope for.
The parts of the company that suffers the most are the longhaul parts. That was true even before Corona. Selling tickets below cost will always be popular with the public, but this is putting pressure on everybody else. That was probably what they meant to do. This company is already split into pieces. Just kill the relevant AOCs and keep the core. Debt to shares in order to take on more debt, and no guarantee of a profitable future even if they can pull this off. The investors must be thrilled. A very interesting scenario will happen if Norwegian survives because it's competitor in Scandinavia,SAS, is heading in much the same direction as Norwegian before the crisis hit. Extremely low equity, high debts(more than 52 billion Swedish kr!!)and more loans will not solve the situation (Loans dont up the equity, ask Kjos) so the worst thing that could happen for SAS right now, is facing a restructed and almost debt free Norwegian. That scenario is becoming very real, IMHO. I think the SAS management are acutely aware of the danger, because the last couple of years have seen a dramatic decrease in the T and C in SAS, forced part time for upgrades, shocking low wages and fully variable rosters. A real shame...see the SAIL thread for more |
Matt, of course the UK government is assisting in paying the salaries right now. Totally different thing.
The UK AOC wasn't profitable before Covid-19 hence why I think that IF the Norwegian government will bail out Norwegian it will focus on a trimmed down mostly Scandinavian operation that is to the benefit of infrastructure and accessibility of Norway. It is IMHO not realistic to expect Norwegian coming out of this crisis in its current form, shape or size. |
Originally Posted by Tommy Gavin
(Post 10754446)
Matt, of course the UK government is assisting in paying the salaries right now. Totally different thing.
The UK AOC wasn't profitable before Covid-19 hence why I think that IF the Norwegian government will bail out Norwegian it will focus on a trimmed down mostly Scandinavian operation that is to the benefit of infrastructure and accessibility of Norway. It is IMHO not realistic to expect Norwegian coming out of this crisis in its current form, shape or size. |
Well, the way Trump is throwing money at the US airlines, if companies like norwegian don’t survive, your options for transatlantic will be an old 777, 77 year old cabin crew....and an ice cream...
good luck |
Originally Posted by Tontito
(Post 10754170)
Crews are paying social security in France for sure. However income taxes are subject to the Double Taxation convention between the country of residence and France.
As 777 stated the furlough agreement was, originally, for French companies only. In the mean it has been changed to include airlines with bases in France to include easyJet crews who are still employed by EasyJet U.K, a British company. CDG and LGW were the cash cows on longhaul for Norwegian. They flew significant number of flights from CDG and LGW. It will be in everybodys interest to keep that as it is. |
Originally Posted by Luke258
(Post 10754555)
With the difference that Norwegian Crew are employed by a french employer. I am Well aware of the DTAs. But don’t assume that all CDG crew lives outside France, and those who do can also be asked to pay taxes in France according to the relevant DTA.
CDG and LGW were the cash cows on longhaul for Norwegian. They flew significant number of flights from CDG and LGW. It will be in everybodys interest to keep that as it is. I believe Norwegian will still be here after Covid 19 but on a much smaller scale, mainly Scandinavia with little to no long haul. |
Originally Posted by Tommy Gavin
(Post 10754446)
Matt, of course the UK government is assisting in paying the salaries right now. Totally different thing.
The UK AOC wasn't profitable before Covid-19 hence why I think that IF the Norwegian government will bail out Norwegian it will focus on a trimmed down mostly Scandinavian operation that is to the benefit of infrastructure and accessibility of Norway. It is IMHO not realistic to expect Norwegian coming out of this crisis in its current form, shape or size. |
Originally Posted by 8che
(Post 10754844)
Do you have any information to back up the statement that NUK was not profitable ?
BA https://companycheck.co.uk/company/I...PLC/financials Virgin ( part) https://companycheck.co.uk/company/0...key-financials Profit and loss are not that important in this crisis, other tax the ability to raise funds.. as always "cash is king" |
Originally Posted by 8che
(Post 10754844)
Do you have any information to back up the statement that NUK was not profitable ?
|
Originally Posted by Tommy Gavin
(Post 10755060)
I know that various large travel agencies were instructed not to book Norwegian ex UK not too far ahead and not in a package due to financial difficulties. This usually does not imply profitability. This was before Covid-19 btw
|
Originally Posted by 8che
(Post 10754844)
Do you have any information to back up the statement that NUK was not profitable ?
https://www.flightglobal.com/strateg...136744.article |
At the end of the day, the longhaul product was something that people actually liked and wanted to use - just have to ensure it makes some money in the future if things resume , and I’m sure the new CEO is the man to come up with the ideas
|
Originally Posted by 3Greens
(Post 10755174)
utter rubbish. You’re mixing up profitability with cash flow.
|
Government bailouts for airlines have been mooted, including for Virgin Atlantic, based in Crawley. Butler’s former employer, burning through £40m a week as its planes sit idle, will benefit from a £600m government-backed loan.
If the Norwegians really want NAS to survive, they must put their hands in their pockets, it's all very well spouting along the lines of UK jobs etc etc, but their transport minister heralds the income the airline bring to THEIR economy.. not UK, the UK is merely a convenient launch pad for operations. In normal times, Gatwick adds about £2.3bn to Britain’s economy each year. More than 250 firms employ 24,000 staff at duty-free shops, pubs, restaurants, car hire and bureaux de change. A further 20,000 work in the supply chain. Nobody wants to see anyone fail, but the UK government is already stretched and at the end of this mess (if there is an end!) its the UK tax payers and economy that will suffer. The papers say OSM doesn't have money to pay crews, isn't OSM another NAS company? If you want to play with the big boys you need a viable and sustainable business model.. not a wing and a prayer .. |
https://www.change.org/p/the-norwegi...ent_en-us%3Av1
Please sign the above petition to save Norwegian. Thank you, and stay safe! |
Originally Posted by 737 Jockey
(Post 10755370)
Please sign the above petition to save Norwegian. Thank you, and stay safe! I can understand saving the operation in Norway or even in Scandinavia, but why the hell does a Norwegian tax payer must see his money being used to save the other part of the company (mainly UK and Spanish bases)? What interest does Norway has in routes like Gran Canaria - Madrid or London - Corfu? |
Originally Posted by 737 Jockey
(Post 10755370)
https://www.change.org/p/the-norwegi...ent_en-us%3Av1
Please sign the above petition to save Norwegian. Thank you, and stay safe! |
Originally Posted by Paul737
(Post 10755428)
So now the Norwegian government must save an airline that is losing money doing flights Barcelona - Tel Aviv, Paris - New York or Tenerife - Munich because they are selling tickets below costs.
I can understand saving the operation in Norway or even in Scandinavia, but why the hell does a Norwegian tax payer must see his money being used to save the other part of the company (mainly UK and Spanish bases)? What interest does Norway has in routes like Gran Canaria - Madrid or London - Corfu? |
Originally Posted by Big Tudor
(Post 10755519)
Same question in reverse. Why must UK/Spanish/US/ etc, government save a Norwegian company? Seems like Norwegian wants to be Norwegian when it suits, but becomes Norwe-chameleon when it needs to be bailed out.
|
Originally Posted by srjumbo747
(Post 10755456)
NO, NO, NO, NO!
like how about advertising in the big issue, or have you considered ikea. |
What's next, either:
1.- Bondholders and creditors agree to CEO Jacob´s plan by Apr 30th to swap (most of) their debt into equity, leaving norwegian with a decent balance sheet in order to survive the crisis, obtain further loans from Norway or other lenders and restart operations in a gradual manner when conditions permit. This can only happen if creditors believe in norwegian as a global business and are obviously pressured by the fact that by not accepting the offer, they're left with either loosing most of their money in bankruptcy proceedings, or recovering assets which are very hard to place right now (acft, slots, hangars...). This option would be the best for all employees as norwegian will pretty much remain more or less the same (although with a reduced size initially and some adjustment to their business while demand recovers). This would also be the preferred option for Norway, as they would keep an important global player with their brand, keep Norway connected to the world, save thousands of norwegian jobs and tax revenue for both company and staff, and still leave the door open to a partial nationalisation of a much healthier airline. Current shareholders would be diluted to almost nothing, but still better than nothing. 2.- Bondholders and creditors do no trust the business plan and prefer to take the risk of repossessing their assets and try to place them somewhere else despite the current turmoil. Norway then would not likely come to the rescue, as norwegian would not be worth saving as it´s simply too big and saddled with enormous debt. The company would then go into bankruptcy proceedings. Norway will then get some of the regional 737 operation at liquidation prices by reopening a much smaller norwegian or similar and rescuing most of their local norwegian jobs. Shareholders will lose everything and RYANAIR will come in and buy the long haul operation for peanuts, something they're very good at, probably even keeping the brand if the price is right, or else redeploying elsewhere where money is to be made with brand new B787, slots, and a market where only a few players will be left to compete. He did it in 9/11 and he'll do it again now. Many employees will also be rescued as the operation is ready to go, albeit with diminished conditions. Either way, those who believe that the current norwegian will be saved by either creditors or Norway to become a much smaller regional company based in Oslo are either: a.- Dreaming. b.- Small shareholders that have not accepted their fate and who think their country would rescue them regardless. c.- Die hard norwegian citizens that believe that they will keep their non-stop services to LAX and JFK from their hometowns even though Scandinavia simply doesn't have the catchment area or critical mass to make money in long haul and also cannot attract enough tourists to make it profitable. I truly hope for the first option... |
I think the survival of Norwegian is in everybody's interest! - Even if it's by bailout or other means. If we lose another big player in Europe the market will be flodded with pilots once again, and the recovery will take ages. It would seriously suck for the people working in norwegian, but try and think big picture for a moment! Many other respectable airlines will no doubt downsize in the times to come with people losing jobs far and wide. That goes for legacy carriers and direct competitors to Norwegian as well. If we don´t keep at least some airlines running on lifesupport it will water down the job market, and as we know not a single pilot will be safe for a very long time. You may think you will be ok with any legacy-type carrier but I think this will likely affect everyone - big and small.
I'll be signing that petition and i'll keep my fingers crossed for Norwegian. |
Originally Posted by 737lpa
(Post 10755552)
What's next, either:
1.- Bondholders and creditors agree to CEO Jacob´s plan by Apr 30th to swap (most of) their debt into equity, leaving norwegian with a decent balance sheet in order to survive the crisis, obtain further loans from Norway or other lenders and restart operations in a gradual manner when conditions permit. This can only happen if creditors believe in norwegian as a global business and are obviously pressured by the fact that by not accepting the offer, they're left with either loosing most of their money in bankruptcy proceedings, or recovering assets which are very hard to place right now (acft, slots, hangars...). This option would be the best for all employees as norwegian will pretty much remain more or less the same (although with a reduced size initially and some adjustment to their business while demand recovers). This would also be the preferred option for Norway, as they would keep an important global player with their brand, keep Norway connected to the world, save thousands of norwegian jobs and tax revenue for both company and staff, and still leave the door open to a partial nationalisation of a much healthier airline. Current shareholders would be diluted to almost nothing, but still better than nothing. 2.- Bondholders and creditors do no trust the business plan and prefer to take the risk of repossessing their assets and try to place them somewhere else despite the current turmoil. Norway then would not likely come to the rescue, as norwegian would not be worth saving as it´s simply too big and saddled with enormous debt. The company would then go into bankruptcy proceedings. Norway will then get some of the regional 737 operation at liquidation prices by reopening a much smaller norwegian or similar and rescuing most of their local norwegian jobs. Shareholders will lose everything and RYANAIR will come in and buy the long haul operation for peanuts, something they're very good at, probably even keeping the brand if the price is right, or else redeploying elsewhere where money is to be made with brand new B787, slots, and a market where only a few players will be left to compete. He did it in 9/11 and he'll do it again now. Many employees will also be rescued as the operation is ready to go, albeit with diminished conditions. Either way, those who believe that the current norwegian will be saved by either creditors or Norway to become a much smaller regional company based in Oslo are either: a.- Dreaming. b.- Small shareholders that have not accepted their fate and who think their country would rescue them regardless. c.- Die hard norwegian citizens that believe that they will keep their non-stop services to LAX and JFK from their hometowns even though Scandinavia simply doesn't have the catchment area or critical mass to make money in long haul and also cannot attract enough tourists to make it profitable. I truly hope for the first option... I understand you don't want to loose your job and base, but thinking creditors believe in norwegian as a global business is being a dreamer. Have you considered for a second that maybe the companies will be interested in replacing older 737/767/330/... with cheaper second hand 737/787? I can easily see Ryanair taking lots of Norwegian`s 737. And thinking Ryanair will come and buy the super profitable long haul operation is simply madness. How is Norwegian going to be profitable in this market where the lessors, bondholders, creditors will loose everything if they don't accept Jacob's plan and there is no place for those aircrafts? There is no market where to put those aircrafts but there is market for Norwegian to keep them flying? |
Paul737,
1.- RYANAIR does not need to buy 737 from norwegian because the have over 500 of them on the line and over 200 on order. 2.- I haven't said that "creditors believe in norwegian as a global business", I have said that, for them to swap their debt into equity they either believe in norwegian as a global player (and not as a small regional airline based in OSL) or else they would just let the company go bust and recover their assets. 3.- Of course there will be companies wishing they could replace their 76´s for 78´s, but you need to be financially sound for that, and many won't be after this is over, hence RYR will be one of the very few to be able do that. 4.- In regards to your last statement, whether norwegian can be profitable or not, is precisely what the lessors, bondholders and creditors will have to believe in order to agree or not. Unfortunately the situation is what it is and it won't be easy for anyone, including employees and shareholders. But in my opinion, one thing is certain. Norwegian will not be rescued (by either creditors or Norway) to become a small regional airline. It simply doesn't make sense. And that was the point of my previous post, as there are many comments in the thread implying that the new norwegian will be based in Oslo and make their money from an intra-scandinavian market, something impossible to materialise due to their size. |
737lpa,
Ryanair does not have more than 500. They actually have about 440. Many of them are pretty old and a lot where about to be replaced by the MAXs. Of course there is no need to talk about the MAX situation. And the (sad)truth is having seen how O´leary works, if that helps to make Norwegian go bust, of course RYANAIR would be interested in buying lot of 737 from Norwegian. I wouldn't be surprised if he has already been talking with the 737 lessors about that possibility. My opinion (and a lot of people in Scandinavia as well) is that Norwegian is not profitable in its current form. No matter what Jacob said about they where heading to the best summer ever but he showed no proof of that (if that was the case the cash flow would have been way better). You only had to check the load factor before the corona crisis. I think the company will be saved by Scandinavia, but not to become a small regional airline and do only intra-scandinavian flights as you mentioned. They will close all the bases outside Scandinavia and from there compete with SAS having around 80 aircrafts (including some 787s) flying to and from the rest of Europe. |
Originally Posted by SSDK
(Post 10755566)
I think the survival of Norwegian is in everybody's interest! - Even if it's by bailout or other means. If we lose another big player in Europe the market will be flodded with pilots once again, and the recovery will take ages. It would seriously suck for the people working in norwegian, but try and think big picture for a moment! Many other respectable airlines will no doubt downsize in the times to come with people losing jobs far and wide. That goes for legacy carriers and direct competitors to Norwegian as well. If we don´t keep at least some airlines running on lifesupport it will water down the job market, and as we know not a single pilot will be safe for a very long time. You may think you will be ok with any legacy-type carrier but I think this will likely affect everyone - big and small.
I'll be signing that petition and i'll keep my fingers crossed for Norwegian. 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. |
Paul737,
Scandinavia has already turned their back to norwegian except for Norway, which is also placing very difficult conditions in order to get a loan guarantee of €250 million, which is not anywhere near what's needed in order to weather this storm out with their current debt levels of almost €8,000 million. That's not to say that Scandinavia, or any other region in the world, can get 80 or whichever amount of aircraft from the market (including a bankrupt norwegian on liquidation) and put a new company up if they see fit. But closing all the bases in norwegian, downzizing fleets, decommissioning their LH ops and firing all its employees abroad without filing for bankruptcy will already be more expensive than the loan from Norway. If creditors don't believe in the current norwegian, the new norwegian will have to start from scratch after liquidation, as it's happened before in many airlines (air berlin, etc...). Scandinavian bases are not an asset, except for Scandinavian countries. For any money making business, Scandinavian countries are expensive because their living standards are very high and their welfare system is well above average, not to mention their tax rates, social security entitlements, small catchment areas, little touristic interest for foreigners and poor traffic figures in general. That's why the predominant carriers are mostly state owned like Finnair and SAS, which on top of everything is loss making and has been for decades and which has been rescued multiple times, including now. 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. Surely aircraft lessors would have been talking to RYR about their chances of placing their grounded aircraft, but I think there is much more interest in their B787 fleet for the fact that it would open new markets and it's a very demanded aircraft right now, than their B737´s, for which there are plenty more of opportunities after the MAX fiasco and their associated cancellations. Besides, remember that RYR has already huge amounts of B737 coming their way. Again, we're all entitled to our opinion, and we will soon find out what the final outcome is. One way or the other, aviation will overcome this crisis like it has in the past. but it will take some time... |
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