Norwegian burning cash!
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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.
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.
if things go well then Norwegian Long Haul works but in this industry things never go well. Their customer service is appalling/ non existent. The onboard product works well but they, in my humble opinion, will fail.
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Press release
It’s great to see all the “monday morning CEO’s” here om pprune... Maybe you should start an airline? You guys sure know the ins and outs of aviation. Anyways, I hope Norwegian will be ok. As always, time will tell...
press release from today:
Norwegian Air Shuttle ASA (“the Company”) would like to give the financial market a year-end update. To meet the competitive environment in a period with seasonally lower demand in Europe, the Company has made several changes to its route portfolio as well as adjusted its capacity. Combined, these measures should improve the financial performance from the start of 2019.
In addition, the Company has launched an extensive cost savings program, #Focus2019, which will contribute to estimated savings of minimum NOK 2 billion in 2019. Six weeks into the program, we have already identified significant savings. The Company will update the market with results from #Focus2019 in connection with the announcement of the results for the first quarter of 2019.
As previously communicated, Norwegian’s long-haul operation has been disrupted by challenges with the Rolls-Royce engines on the Dreamliners. The Company has now reached an agreement with Rolls-Royce which will have a positive effect from the first quarter of 2019. The commercial terms of the agreement remain confidential.
The Company is pleased to announce that the financing for all aircraft deliveries for the first half of 2019 is secured. This also includes refinancing of one of the delivered Dreamliners, resulting in a positive liquidity effect of NOK 275 million in December 2018.
The process of divesting aircraft continues, and we experience significant interest in our existing fleet as well as future deliveries. The Company recently signed a letter of intent for the sale of two aircraft with delivery in the first quarter of 2019. The discussions about forming a joint venture for aircraft ownership also continues with full force.
press release from today:
Norwegian Air Shuttle ASA (“the Company”) would like to give the financial market a year-end update. To meet the competitive environment in a period with seasonally lower demand in Europe, the Company has made several changes to its route portfolio as well as adjusted its capacity. Combined, these measures should improve the financial performance from the start of 2019.
In addition, the Company has launched an extensive cost savings program, #Focus2019, which will contribute to estimated savings of minimum NOK 2 billion in 2019. Six weeks into the program, we have already identified significant savings. The Company will update the market with results from #Focus2019 in connection with the announcement of the results for the first quarter of 2019.
As previously communicated, Norwegian’s long-haul operation has been disrupted by challenges with the Rolls-Royce engines on the Dreamliners. The Company has now reached an agreement with Rolls-Royce which will have a positive effect from the first quarter of 2019. The commercial terms of the agreement remain confidential.
The Company is pleased to announce that the financing for all aircraft deliveries for the first half of 2019 is secured. This also includes refinancing of one of the delivered Dreamliners, resulting in a positive liquidity effect of NOK 275 million in December 2018.
The process of divesting aircraft continues, and we experience significant interest in our existing fleet as well as future deliveries. The Company recently signed a letter of intent for the sale of two aircraft with delivery in the first quarter of 2019. The discussions about forming a joint venture for aircraft ownership also continues with full force.
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The product has been altered to meet the cost cutting excercise, no longer are you entitled to free spirits in preimium, only wine and beer, which for a premium product is not great .
Having stopped, all pay rises to crew, cancelled all new joiner course for 2019 onto the 787, even stopped the Christmas meal allowance, and aiming to save 3 billion NOK In 2019, is not a sign of a stable airline .
An IAG buy out would frankly worry me if I worked for Norwegian, as airframes and slots would be passed onto Iberia and BA for example, and as mentioned before Norwegian would be cut back to the bare bones .
Let's see what the future holds......
Having stopped, all pay rises to crew, cancelled all new joiner course for 2019 onto the 787, even stopped the Christmas meal allowance, and aiming to save 3 billion NOK In 2019, is not a sign of a stable airline .
An IAG buy out would frankly worry me if I worked for Norwegian, as airframes and slots would be passed onto Iberia and BA for example, and as mentioned before Norwegian would be cut back to the bare bones .
Let's see what the future holds......
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Also, AFAIK LEVEL was created specifically to counter Norwegian’s expansion in BCN and other places.
To me it means it isn’t necessarily there to create profit as a stand-alone entity, but rather to curb the competition...
To me it means it isn’t necessarily there to create profit as a stand-alone entity, but rather to curb the competition...
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Could the shares bought by IAG be one way of acquiring Slots off Norwegian at a later date ?
The rapid acquisition of new aircraft by many airlines in the past has resulted in their rapid demise when worldwide consumer confidence dips.
The rapid acquisition of new aircraft by many airlines in the past has resulted in their rapid demise when worldwide consumer confidence dips.
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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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Finally a sensible post in this thread.
BA know that Norwegian are trashing their yields - just check out the prices on BA flights to US destinations served by Norwegian vs. those that aren’t.
If they didn’t see the Norwegian model as a credible threat, they’d have ignored them and let them burn themselves out.
BA know that Norwegian are trashing their yields - just check out the prices on BA flights to US destinations served by Norwegian vs. those that aren’t.
If they didn’t see the Norwegian model as a credible threat, they’d have ignored them and let them burn themselves out.
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Finally a sensible post in this thread.
BA know that Norwegian are trashing their yields - just check out the prices on BA flights to US destinations served by Norwegian vs. those that aren’t.
If they didn’t see the Norwegian model as a credible threat, they’d have ignored them and let them burn themselves out.
BA know that Norwegian are trashing their yields - just check out the prices on BA flights to US destinations served by Norwegian vs. those that aren’t.
If they didn’t see the Norwegian model as a credible threat, they’d have ignored them and let them burn themselves out.
I think the potential takeover was nothing more than IAG identifying weakness in the business model before reconfiguring level for the kill. It's why they are loss leading certain markets. You only have to see densification of BA 320/321 and LGW 777 to see that this is a fight across the group for IAG. Not to forget that IAG can burn cash for a lot longer than NAS. What was the profit before share buyback last year for the group? NAS aren't turning much of a profit due to their overheads and debt servicing. Plus they cannot reconfigure quick enough to survive the IAG onslaught imho. Matter of time.
Imho the pay to use wi-fi in business and first is a big mistake from BA. Inflate the prices 5 quid and offer it free to every business class or first customer. People will resent the time spent entering in card details when it effectively is less than 0.1% of the face of the ticket cost. For Business travellers WiFi is essential. NAS have this right.
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If IAG take over NAS, there will be no huge up scaling of Norwegian.
What IAG will do is kill it off, and let BA and Iberia continue to grow, and ticket prices across the Atlantic go back up, as people need to travel for business, and for leisure.
It's a threat yes due to low ticket costs, but why would IAG take them over, ramp up the operation and let their bigger elements, BA and Iberia suffer....
Also Norwegians tickets price's come at a cost, the pay and conditions the current employees (agency workers) receive is well below industry standards.
Yes Osm contract may pay well on the dreamliner, but at what price, you do a EZE-LGW flight, land back after 14hrs, have one clear day off, then out the door to Boston! Legal yes, morally right.... Hell no!!!!
What IAG will do is kill it off, and let BA and Iberia continue to grow, and ticket prices across the Atlantic go back up, as people need to travel for business, and for leisure.
It's a threat yes due to low ticket costs, but why would IAG take them over, ramp up the operation and let their bigger elements, BA and Iberia suffer....
Also Norwegians tickets price's come at a cost, the pay and conditions the current employees (agency workers) receive is well below industry standards.
Yes Osm contract may pay well on the dreamliner, but at what price, you do a EZE-LGW flight, land back after 14hrs, have one clear day off, then out the door to Boston! Legal yes, morally right.... Hell no!!!!
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Mr. Walsh stated earlier this year that Norwegian needs a partner. Granted, the mammoth aircraft order book has been weighing heavily on the financials lately. The RR engine woes, subsequent wetleases and passenger compensations haven’t helped either. Mr Kjos reluctant stance on not hedging fuel has also been expensive in the short term, but with the oil price now down by 30 percent will potentially save the company billions of norwegian kr in the coming year in comparison to its competitors.
Also, the future joint venture(watch this space) will now bear the cash obligations on future deliveries, reduce the debt and strengthen the own capital.
IAG are free to bid for a third time, but it will have to have very deep pockets.
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So Norwegians future is hanging on fuel prices dropping, and prices staying down (have you seen the financial markets recently), and a future joint venture which the general public are yet to be made aware of.
Yeah I'm now 110% assured of Norwegians future........
just as I'm sure that chocolate fire guard I received for Christmas is going to work wonders.......
Yeah I'm now 110% assured of Norwegians future........
just as I'm sure that chocolate fire guard I received for Christmas is going to work wonders.......
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Finally a sensible post in this thread.
BA know that Norwegian are trashing their yields - just check out the prices on BA flights to US destinations served by Norwegian vs. those that aren’t.
If they didn’t see the Norwegian model as a credible threat, they’d have ignored them and let them burn themselves out.
BA know that Norwegian are trashing their yields - just check out the prices on BA flights to US destinations served by Norwegian vs. those that aren’t.
If they didn’t see the Norwegian model as a credible threat, they’d have ignored them and let them burn themselves out.
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It's always interesting to read PPRune.......it seems that the Airline always choose the wrong CEO....the wrong financial Managers.......you are all here! So let me understand (I am not that clever in those topics), IAG wish to spend a considerable amount of money to buy Norwegian and then......shut it down.
An asset with important figures in terms of passengers and network, more then 100 aircraft, good load figures especially during the high season quarters, less cost for the company per flight (the salary of a BA crew doing let's say 65/70 hours is for sure higher then the one in Norwegian), good feedback from the passengers (new plane, comfortable seats, modern IFE for all the class.......)......
I guess that if they will manage to cut the cost and solve the engines problem (maybe with some IAG people mentoring they might solve the issues faster then normal), Norwegian as the potential to be a very important asset........a huge amount of “holiday” pax they fly only if they have cheap ticket........if Norwegian is gonna shut down they are not going to revert to BA ir similar......they just won't fly.
Just my 1 cent ��
An asset with important figures in terms of passengers and network, more then 100 aircraft, good load figures especially during the high season quarters, less cost for the company per flight (the salary of a BA crew doing let's say 65/70 hours is for sure higher then the one in Norwegian), good feedback from the passengers (new plane, comfortable seats, modern IFE for all the class.......)......
I guess that if they will manage to cut the cost and solve the engines problem (maybe with some IAG people mentoring they might solve the issues faster then normal), Norwegian as the potential to be a very important asset........a huge amount of “holiday” pax they fly only if they have cheap ticket........if Norwegian is gonna shut down they are not going to revert to BA ir similar......they just won't fly.
Just my 1 cent ��
