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Norwegian burning cash!

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Norwegian burning cash!

Old 23rd Dec 2018, 17:12
  #121 (permalink)  
 
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Scare Mongering doesn't help

No covenants have been breeched yet.
Not withstanding their equipment issues, look at the presence they have in the market.
Should they require addition external funding there will be no shortage of suitors, it's just a matter of how much of the pie the principles are will to sell and to whom and at what price.

The crew will be ok and on that note Merry Christmas to all.
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Old 23rd Dec 2018, 17:28
  #122 (permalink)  
 
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If norwegian needs more money, it will get it. The business case is sound and the product well received. No governants will be breached.
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Old 23rd Dec 2018, 18:06
  #123 (permalink)  
 
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Originally Posted by directmisbi View Post
If norwegian needs more money, it will get it. The business case is sound and the product well received. No governants will be breached.
if the business case is that sound, why did they burn that much cash?
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Old 23rd Dec 2018, 18:11
  #124 (permalink)  
 
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Because expanding a business is very expensive
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Old 23rd Dec 2018, 18:23
  #125 (permalink)  
 
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Even within the last month or so, renegotiating debt has become much more difficult - against the backdrop of some failed rights issues, with underwriters expensively carrying the can, many many companies dearly wanting to widen covenants, and the Fed squeezing until the pips squeak. Equally, any potentially bidder will be loath to take on Norwegians debt. Once it's bust, that debt magically disappears!
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Old 23rd Dec 2018, 18:34
  #126 (permalink)  
 
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Leverage itself is not a problem in an healthy business. Actually, if the business works it is often a good idea in order to amplify the profits.
The problem here, disregarding for a second the debt situation, is that the company is not making money in its core activity, which is flying passengers from A to B. In this context leverage is only going to make the situation worse.
Of course the passengers love the product, they are flying under cost price. I would love it too. Until it lasts.
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Old 23rd Dec 2018, 18:37
  #127 (permalink)  
 
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Originally Posted by directmisbi View Post
If norwegian needs more money, it will get it. The business case is sound and the product well received. No governants will be breached.
Sound business case, really?!!

That seems to contradict most, if not all, of the financial opinions out there!
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Old 23rd Dec 2018, 19:34
  #128 (permalink)  
 
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Wizzair lost money for the first 9 years of operation. A lot of 'experts' don't realise that, in business, you have to spend money to make money.

That Forbes link which seems to be doing the rounds is nothing more than a Blog, which references a website, which references a newspaper, which quotes an unassociated employee of a bank.

Norwegian have significant assets, including the bulk of the 737 fleet, which are owned. Stop the scaremongering.
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Old 23rd Dec 2018, 20:17
  #129 (permalink)  
 
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If we are to quote analysts then why not use Mr Kenneth Sivertsen of Pareto Securites, a private investment bank, stating
the norwegian Airlines stock is underrated, and the potential joint venture (95 airbus and 45 Boeings future deliveries)is according our calculation well worth over 40 billion norwegian kr thus removing the speculation about debt and cash position for good.


Last edited by directmisbi; 23rd Dec 2018 at 21:22.
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Old 23rd Dec 2018, 22:01
  #130 (permalink)  
 
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The great thing about these type of threads is time will tell......would love to reread it in 12 months time.
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Old 23rd Dec 2018, 22:02
  #131 (permalink)  
 
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Originally Posted by directmisbi View Post
If norwegian needs more money, it will get it. The business case is sound and the product well received..
not it’s not. Not whatsoever. Net costs are higher than net revenues. Hardly a sound business, low cost long haul has never worked and never will. Norwegian are just the latest example of it. Of course some other fool will always come along to prove that they are the ones who can do it. I fail to see how selling off all their remaining assets paints the picture of a healthy company.
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Old 23rd Dec 2018, 22:35
  #132 (permalink)  
 
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Originally Posted by hunterboy View Post
The great thing about these type of threads is time will tell......would love to reread it in 12 months time.
I think you’ll be able to reread this thread in 12 weeks and find your answer...
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Old 23rd Dec 2018, 22:46
  #133 (permalink)  
 
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Originally Posted by RexBanner View Post


not it’s not. Not whatsoever. Net costs are higher than net revenues. Hardly a sound business, low cost long haul has never worked and never will. Norwegian are just the latest example of it. Of course some other fool will always come along to prove that they are the ones who can do it. I fail to see how selling off all their remaining assets paints the picture of a healthy company.
So why did IAG acquire 4.6 percent of norwegian earlier this year. The even tried to buy the company, twice but both offers were rebuffed. These are hard facts. Maybe you should phone up your CEO and tell him that low cost long haul "has never worked and never will". And Norwegian will be bust before the new year, so better sell the shares IAG took up because Norwegian is "hardly a sound business". Or a "ponzi scheme"
Could the record order of 222 aircrafts back in 2012 and the extremely lucrative price of some of these to be sold later on with huge profit be part of a business plan? Has Mr. Kjos stated earlier that this has in fact been the plan since the very beginning? Maybe you should try to research a little before jumping the gun? Could MOL have an agenda with his scaremongering? Did he badmouth Primera or Wow air? No, because they were not hurting his business.
The joint venture is imminent, and will put to rest most of the critics in the media and elsewere. Merry Christmas :-)
Post edited, the forbes article has now been updated.

I rest my case.

”...and based on communication sent from the carrier this Saturday, the airline’s liquidity position is reportedly stable. As the end of the year approaches, Norwegian seems keen on having its debts fully settled”

Last edited by directmisbi; 23rd Dec 2018 at 23:15.
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Old 23rd Dec 2018, 23:09
  #134 (permalink)  
 
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As someone who works for an IAG company, it gives me no pleasure to offer the opinion that the various so called smart CEO’s running IAG and its OpCo’s are no smarter than you or I. What they are is opportunistic sociopaths that happily exploit legal loopholes and gaps in employment legislation in different jurisdictions to drive down (mainly) employee costs while happily vastly increasing their own renumeration. I don’t believe that they have any more foresight than you or I.
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Old 24th Dec 2018, 02:15
  #135 (permalink)  
 
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FFS

Unbelievable. Same comments from same people. You cannot piss passengers off as long as these guys have done. Yes the aircraft are good but they lack infrastructure and those behind the scenes don’t care.
They’ll go bust.
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Old 24th Dec 2018, 03:34
  #136 (permalink)  
 
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Intrigued to know how you came to the conclusion they’ve “pissed people off”. Their short and long haul product is excellent and their on time performance has improved markedly and is now one of the best in Europe.

The only customers that may be “pissed off” are those that end up on wet leases. Blame RR for that, I doubt BA pax were too pleased to be flying with Air Belgium either.
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Old 24th Dec 2018, 07:54
  #137 (permalink)  
 
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Originally Posted by directmisbi View Post

So why did IAG acquire 4.6 percent of norwegian earlier this year. The even tried to buy the company, twice but both offers were rebuffed. These are hard facts.
They want the LGW slots when/if Norwegian no longer exists. Thought that was obvious.

Not saying Norwegian will go under, just saying I wouldn’t be taking any comfort from the fact IAG invested in it.
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Old 24th Dec 2018, 08:31
  #138 (permalink)  
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So why did IAG acquire 4.6 percent of norwegian earlier this year.
Building a stake from which to launch a takeover bid. To say that part of the business model has always been to buy airframes in order to sell them off is to admit that the senior management have been adopting a ludicrously high risk strategy based on future asset values in a notoriously volatile industry - a strategy which would be unnecessary for a company which was generating a sufficient margin from its operational activities.

The the only reason Norwegian stands is because there are investors who choose to divert capital from successful economic activities into it, a marginally (at best) performing business enterprise. Things may improve over time but no rational investor looking at Norwegian’s financial results over the past few years could come to the conclusion that this is a business which is going to perform consistently well in the short term. Indeed when you look at the share price performance the most significant positive change in the last three years has occurred when a successful enterprise was contemplating a takeover (ie providing better security for Norwegian’s debts). Apart from that the share price trajectory has been steadily negative.

It is a good product which Norwegian offer but the cost of providing the product is greater than customers are willing to pay for it. To put it differently: Norwegian either have to provide the same product at lower cost or somehow convince more customers to part with more money for the product they provide. In any case, if they wish to survive in the long run they need to change, the current business model is underperforming.


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Old 24th Dec 2018, 08:42
  #139 (permalink)  
 
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Norwegian have significant assets, including the bulk of the 737 fleet, which are owned. Stop the scaremongering.
where did they get the money to purchase the assets?
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Old 24th Dec 2018, 09:39
  #140 (permalink)  
 
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Originally Posted by directmisbi View Post
Maybe you should phone up your CEO and tell him that low cost long haul "has never worked and never will".
Done one better than that, I told him that in a face to face conversation on a LHR-DUB flight earlier this year when the takeover speculation was going on and, for what it’s worth, he basically agreed with me and said that it’s a very niche market. I got the very real impression that Norwegian would be severely pruned back in the event of any real IAG interest and that most of the 787’s would be redeployed elsewhere. But what do I know? (I genuinely mean that by the way)
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