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Norwegian burning cash!

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Norwegian burning cash!

Old 27th Oct 2017, 21:06
  #41 (permalink)  
 
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Originally Posted by Smooth Airperator View Post
Picked up a book about the subject from the library when I was about 10, does that count?

I understand the parallels (albeit in very basic terms) but we do live in an age of super complex financing deals that have one goal in mind...to mitigate direct financial risk. Combine that with group structures and offshore entities (all things that didn't exist back in the 1970s), does anyone here truly understand Norwegian's financial status considering they own 20% of a bank?
Yeah and how is Lehman Brothers doing with those NINJA Mortgages.

Bottom line in any business is cash is king, run out of it and you are dead.

Supercomplex financial deals don't mitigate risk to the borrower, only to the lender.
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Old 27th Oct 2017, 21:09
  #42 (permalink)  
 
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Originally Posted by QOTS View Post
but to paraphrase the FT..."the fact that MOL hasn't launched his attempt at low cost long haul yet is proof enough that it can't as yet be profitably done." Nuf said, but consider this. RYR et all will often charge for a 40 minute ride in an owned B738/A319 what Norwegian charge for a ten hour ride in a brand new B787. .
And do this 7-8 times per day which brings in revenue every hour of every day.
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Old 27th Oct 2017, 21:14
  #43 (permalink)  
 
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Originally Posted by Smooth Airperator View Post
Do you want to fly for an airline run by greedy ***** that is very cash rich...

Or one run by people who care about employee sustainability but is cash poor?

Quality of life/renumeration not knowing if you'll still have a job in 5 years Vs. a job for life as a slave whilst being kicked in the teeth?

Answers on a postcard.
Most Pilots want to be paid at the end of every month................. cash poor means when a crisis happens there isn't any cash to pay you, cash rich means when there is a crisis the company can ride it out for a while and still pay people.

No yet recorded case of a company going bust with a hundred million in cash in the bank.
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Old 27th Oct 2017, 21:19
  #44 (permalink)  
 
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Originally Posted by Superpilot View Post
There are countless examples of companies who run up extreme debt during expansion. My own had a comparable debt with less than 1/3 of the aircraft Norwegian has. It's taking a huge chunk of this debt every year right now.

What did RYR buy 150 737s with when it expanded after 9/11? Aviation is one of those industries where the value of the primary asset (aircraft) is often many times the total annual revenue. Debt is expected and welcomed by banks that are happy to loan the amounts. If they're happy to do so, what cause for concern do we have? The repayment plan is what matters.
EXIM funded this with interest rates that were tiny on discounts of 50-60% minimum off price and a currency that rapidly swung in FRs favour v US$.

Everybody else was shrinking back but Ryanair bet the farm and won.

US Govt happy, Boeing happy and the workers on production lines even happier as their jobs assurred.
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Old 28th Oct 2017, 12:08
  #45 (permalink)  
 
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Not going so bad after all it seems

https://www.google.es/amp/www.marketwatch.com/amp/story/guid/AD5EF9E0-B7D7-11E7-A08D-7B9011787654
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Old 28th Oct 2017, 15:50
  #46 (permalink)  
 
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It is their "opinion" based on the data they have collected.

Doesn't mean it is wrong or right as they will not have access to internal information.

A short sharp shock could kill demand for 3-6 months....... low margins mean less chance of surviving.
Post 9/11 everything changed and everybody claiming they would never fly again.
In Europe Ryanair went to 1p fares and amazingly all those who would never fly again decided a few days in Barcelona (via Girona) was ok........ Yup they saved the company and in reality quite a lot of other airlines and tourist industries as well, it was about perception of being safe.
But a similar incident now may be more difficult because of social media.
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Old 28th Oct 2017, 15:57
  #47 (permalink)  
 
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Originally Posted by DutchExpat View Post
Not going so bad after all it seems

https://www.google.es/amp/www.market...D-7B9011787654
It is a "could go either way".

Companys need to ensure they hold onto condidence of the lenders, soon as they get a sniff that all may not be well then they work on basis their cash is less secure.

We will know within 3 years................... if they get through that time period without a severe financial shock then decent odds that they will survive.
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Old 28th Oct 2017, 16:45
  #48 (permalink)  
 
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Originally Posted by Smooth Airperator View Post
Do you want to fly for an airline run by greedy ***** that is very cash rich...

Or one run by people who care about employee sustainability but is cash poor?
Work for easyJet. Hard work, there is no doubt, but at least it is a great living, treated very well and they make as much money as FR per aircraft...

A few lessons there for their competitors methinks.
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Old 28th Oct 2017, 17:37
  #49 (permalink)  
 
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Saw they owe 55 800's so they still have the option to sell and leaseback frames to boost the coffin if they cannot cover expenses by operating cashflows or issuing more debt. Guess it's more expensive per mile to keep the plane in the air afterwards... Also saw they consider issuing a new bond to rollover existing one due in November, so if it's the same type broadly say soemthing about the health by looking at the coupon rate...
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Old 29th Oct 2017, 10:30
  #50 (permalink)  
 
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Racedo

Not quite as straight forward as that, 7/8 sectors a day are closer to 6 roatations being the norm for many, few Jet2 crews do more than out and back, then you have have to look at the short duration of the flight, spend on board tends to be a lot less than say a an OSL to LPA, few book hold luggage on short sectors, then ask about airport charges for each landing and take off?

A 737 will burn close to 5000kgs per hour during a climb compared with a MAX in the cruise at 2100kg per hour on a 7 hour flight, conversely crew cost for accommodation will be higher but either way short haul or long haul Norwegian will squeeze 80 hours a month out of the crew.

I think it’s way to early to say that the long haul on the 737 will or won’t work, the 787 is another matter altogether, I’ve flown on a good number of routes and they are very good load factors, premium is often full but they do auction off the spare seats in the last week, I know of people who’ve bid £150 and still not got them, on the early flights out to Denver & Seattle 2 weeks out there were only a couple of premium seats booked, on the day there were only two seats unsold, so someone is working hard at yield management.

The 787-9 is a very different beast to the 788 way better payload and huge amounts of belly cargo being shipped.

The early stages of the 737 long haul operation were limited to max 155 seats whilst awaiting ETOPS & the MAX that figure is now increased to around 175 I understand
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Old 29th Oct 2017, 13:01
  #51 (permalink)  
 
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All good points but we not talking LH on a 737, we are talking about whether NAS is burning money. FR and U2 don't do LH.

FR and U2 can survive a shock to aviaton market because they can drop fares and just get cash in, they may be unprofitable for a while but their reserves will cover it.

NAS not in same position because its cash position is tight and losses have to be funded from their cash.

At the moment based on publicly info available they probably 50-50 to be around in 3 years time, odds work in their favour provided economic conditions stay favourable and they get through next 12 months.

An Icelandic volcano scenario like 2010 with a huge jump in Oil prices I would revise that.
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Old 29th Oct 2017, 13:48
  #52 (permalink)  
 
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Let's see how Brexit works out, for the entire industry let alone Norwegian.
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Old 29th Oct 2017, 14:43
  #53 (permalink)  
 
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Actually Racedo, there is one case of a company going bankrupt-at least US CH 11 style with a large fortune in cash.

That was Worldom back in 1991/2 who made 'inappropriate' accounting entries for some very big ticket items and got busted for it.

Then of course there was the issue that if that was covered up what else might be. So Wcom filed Ch11 so that over time their accounts would be sanitised and believable but they had mega millions in the bank all through the process and all staff and creditors got paid every month like nothing had happened.

Back on track with this thread I could envisage FR going down that kind of route as they are not very 'corporate in their behavior but EZ i would imagine are very well run in that area ', They got a decent deal on new slots and aircraft from the Air Berlin debacle and have the mney on hand to pay for it too.
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Old 29th Oct 2017, 15:11
  #54 (permalink)  
 
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Worldcom was 2002/3 and it was wholsesale fraud by Directors.

Most employees were dismissed and not paid and US Govt bailed it out with a no bid Iraq contract.

C11 is a con as allows companys run away from debts and start over.............. ask any Pilots who have gone through it with airlines.

Back on track with this thread I could envisage FR going down that kind of route as they are not very 'corporate in their behavior but EZ i would imagine are very well run in that area ', They got a decent deal on new slots and aircraft from the Air Berlin debacle and have the mney on hand to pay for it too.
Think you letting personal opinion get in way of reality.

Define corporate............... all companys are goverened by Stock Exchanges / SEC / Company law.

If you have specific clear instances where FR is not following these then pleas publish otherwise you are making an unsubstantiated personal claim.
Making a claim that someone is not corporate while producing no evidence does you no favours.

They paid €40 million for slots, no aircraft paid for and nope they don't have money on hand just to hand over to Airbus, nor would I expect them to. They will use financing to do so.
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Old 25th Mar 2018, 16:55
  #55 (permalink)  
 
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Laurel and Hardy, Abbott and Costello are famous double acts. Norwegian has its own double act with Kjos and Kise. The Norway media reported almost daily last week on Norwegian’s precarious financial situation under the leadership of this not so dynamic duo:

“So far in 2018, the price has fallen by 38.7%...” - Link:

https://e24.no/boers-og-finans/norwe...neder/24292066

“Norwegian balances on a knife edge…..” - Link:

https://www.dagbladet.no/nyheter/nor...-inne/69637038

“This is really bad. Well, Norwegian will probably get through the summer but that’s about it! According to Karl Johan Molnes, analyst of Norne Securities” – Link:

https://www.dn.no/nyheter/2018/03/20...-bunnlost-sluk

“Now the company will also invest in Argentina, a market where no one earns money” - Link:

https://e24.no/boers-og-finans/norwe...-sluk/24290923

It’s too soon to predict any crying in Argentina, but with Ola Supermouse at the helm and his unique style of “just culture” accentuated by bold and underlined email communication, get the tissues ready.

boohoo.
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Old 25th Mar 2018, 20:29
  #56 (permalink)  
 
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Rather than post repetitive “obsessive” links like some! I thought to post other links that isn’t all doom and gloom as one would like people to think.


Norwegian Air plans to fly between Canada and Europe this summer - Business - CBC News

https://www.telegraph.co.uk/travel/n...outes-from-uk/
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Old 26th Mar 2018, 07:54
  #57 (permalink)  
 
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Great , and if it does do well and “wins” against other carriers everyone can enjoy NAS rubbish T&Cs how exciting I can’t wait !
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Old 26th Mar 2018, 08:49
  #58 (permalink)  
 
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Nothing wrong with the post above from Bondi.

It is Simply recent links from media sites in Norway, voicing current issues with Norwegian.

The links are fact, nothing wrong with that, it gives all crew thinking of moving to Norwegian an informed view point.
As do the posative links showing potential expansion.

But is it not worrying that with Norwegian as OMDB30R says, all the links seem to be doom and gloom and keep arising every year, don't you see a trend....
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Old 26th Mar 2018, 09:07
  #59 (permalink)  
 
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In the aviation business, all you need is a little recession to see who is in the sea without a swimsuit on!
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Old 26th Mar 2018, 10:25
  #60 (permalink)  
 
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I’d say it’s more than a little concerning that, despite the most benign and in fact advantageous conditions for airlines across the globe, Norwegian are losing bucket loads of money and investors. Surely that speaks volumes. Low cost long haul just doesn’t work, I’m hardly a soothsayer in predicting this will end only one way. It has been tried again and again and again. The money to be made in long haul is in the premium cabins, not with the plebs down the back paying their couple of hundred quid. It hasn’t suddenly become viable just because the 787 burns a bit less fuel and anyone betting their company on that (Kjos) is a fool.
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