Norwegian burning cash!
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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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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 ��
You are also assuming that the lady doth not protest too much with respect to engine issues? IAG doesnt seem to be using this as an excuse for their 78 fleet.
If the load figures are not translating into sufficient revenue to cover costs, divvy then stow cash in the good times (i suggest with fuel prices as they are this is a good time) plus some in reserve to cover unknown unknowns, its gonna go bust at some stage.
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Norwegian has an exclusively long haul fleet of 787s therefore the issue is of much more significance to BA which has 767, 747 and A380s.
You can speculate wildly if you wish but the available facts are that IAG has kept all airlines that it has bought running as separate entities (with the one and only exception of BMI which got merged into BA). Not only it has kept them separate but it has grown their operations wherever possible.
The model is well understood and used by many business, for example VW. It runs VW, Audi, Skoda, Lamborghini and Bentley. Why run separate brands? because it captures different consumers with different preferences while still taking advantage of economies of scale. If IAG buys Norwegian and shuts it down the only thing that will happen is that a new player will fill the void
You can speculate wildly if you wish but the available facts are that IAG has kept all airlines that it has bought running as separate entities (with the one and only exception of BMI which got merged into BA). Not only it has kept them separate but it has grown their operations wherever possible.
The model is well understood and used by many business, for example VW. It runs VW, Audi, Skoda, Lamborghini and Bentley. Why run separate brands? because it captures different consumers with different preferences while still taking advantage of economies of scale. If IAG buys Norwegian and shuts it down the only thing that will happen is that a new player will fill the void
calypso : Northeast, Cambrian, BCAL,Danair................................................. !!!! History rufutes your claim.
PS talk to any former employee of DanAir and he will tell you what "cherrypicking" in a business sense means in practice.
PS talk to any former employee of DanAir and he will tell you what "cherrypicking" in a business sense means in practice.
Last edited by Meikleour; 26th Dec 2018 at 08:42. Reason: added post script
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The history of IAG doesn't. I understand the process of asset stripping however that has not been the strategy of IAG so far which, in my opinion, is far more relevant to the future of a IAG take over of Norwegian than what happened to Dan air over two decades ago.
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Who got monarchs lgw slots when they went pop? And who mentioned takeover? IAGs vulture fund is huge. My bet is they will wait till the recession and go for the assets in the subsequent resulting firesale. Liquidity will be king.
Last edited by VinRouge; 26th Dec 2018 at 09:19.
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If i could play the IAG CEO i’d buy NAS, blow them up AND higher the ticket prices. Blackmail all thoer IAG pilot groups that if they ask for too much money i ll put them in an agency and let NAS fly their routs and put future aircraft there.
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Interesting times.
I have to say I am getting slowly more optimistic on behalf of my Norwegian colleagues.
Why?
Well , it looks like loan default is being avoided.
Oil down like an auger.
May I add tough times": Let us use a low cost this year, Eh! Not BA!"
A few observations:
Norwegian is per date Nr 8 in Pax nr, that is no small fry. A certain critical mass has been achieved.
RR has settled with NOR on a substantial deal for the engine fiasko.
I see some of You Britts are going on about some historic stuff
an Air, and no airline being successful with LOCO Long Haul.
First Danair had 36 aircraft
Norwegian 163,,,,,
And yes, Big Airlines made damd well sure that Loco Long Haul was exterminated, BUT that was in the days before free and fair competition!
Utterly irrelevant!
As this thread will be up in December 26 2019 , I bet Norwegian alive and well in a year.
Some of the analysis here is just wishfull thinking, me thinks!
I have to say I am getting slowly more optimistic on behalf of my Norwegian colleagues.
Why?
Well , it looks like loan default is being avoided.
Oil down like an auger.
May I add tough times": Let us use a low cost this year, Eh! Not BA!"
A few observations:
Norwegian is per date Nr 8 in Pax nr, that is no small fry. A certain critical mass has been achieved.
RR has settled with NOR on a substantial deal for the engine fiasko.
I see some of You Britts are going on about some historic stuff
an Air, and no airline being successful with LOCO Long Haul.First Danair had 36 aircraft
Norwegian 163,,,,,
And yes, Big Airlines made damd well sure that Loco Long Haul was exterminated, BUT that was in the days before free and fair competition!
Utterly irrelevant!
As this thread will be up in December 26 2019 , I bet Norwegian alive and well in a year.
Some of the analysis here is just wishfull thinking, me thinks!
I REALLY SHOULDN'T BE HERE
I don’t think there is wishful thinking insofar as I don’t think any of the posters here want to see any airline go bust, particularly one which is bringing the fight to the legacy long haul carriers so effectively.
The question is whether it has sufficient revenue to cover its operating costs (marginal at best) and if not whether it will be able to secure additional funding until the point in time that it is able to generate sufficient profit (largely unknown and unknowable as it is subject to many outside factors).
The question is whether it has sufficient revenue to cover its operating costs (marginal at best) and if not whether it will be able to secure additional funding until the point in time that it is able to generate sufficient profit (largely unknown and unknowable as it is subject to many outside factors).
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Granted, passengers were given a treat when they brought in Qatar A330s to cover the AOG 787s, a rare chance for BA passengers to experience a good product for a change.
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A lot of people are forgetting that Norwegian has banking, cruise, hotel and short haul businesses too which are doing extremely well.
I will be saying farewell to Thomas Cook, TUi and Virgin before Norwegian, if ever, ceases.
I will be saying farewell to Thomas Cook, TUi and Virgin before Norwegian, if ever, ceases.
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I am quite optimistic about our future. Had not the new CFO come in and straightened our direction I would have been more worried, he is doing a fantastic job and it is about time for a cost-saving program and organizing the AOC-structure for the future. I believe this will be a critical year ahead but there are a lot of competent people working in the office. Regarding the TC's I am far better of working for Norwegian in Scandinavia than working for e.g BA in the UK. Our package is so much better with regards to roster, pension, vacation, insurances and so on.
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A320Ecam
I am with you, I have had hundreds of flights with Norwegian that has been good , considering what I pay.
With regards to Cruise are we talking Norwegian Cruise Line, in that case I think You just expanded the brand a tad , Eh?
No connection in ownership, of the Ship, I think . Correct me if wrong.
IceJock
Indeed
I am glad to hear this.
Massive potential for savings AND extra revenue. 43 øre per seatmile is not sustainable as the Irish lot is down to 27 øre.
And that gang of Cabin Captains need to sell me at least a coffee at 06.30 departure for Oslo, either that or quit mixing private Late in the galley and putting 17 crewbags in MY overhead,,,,,
With regards to Cruise are we talking Norwegian Cruise Line, in that case I think You just expanded the brand a tad , Eh?
No connection in ownership, of the Ship, I think . Correct me if wrong.
IceJock
Indeed
I am glad to hear this.
Massive potential for savings AND extra revenue. 43 øre per seatmile is not sustainable as the Irish lot is down to 27 øre.
And that gang of Cabin Captains need to sell me at least a coffee at 06.30 departure for Oslo, either that or quit mixing private Late in the galley and putting 17 crewbags in MY overhead,,,,,
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I am with you, I have had hundreds of flights with Norwegian that has been good , considering what I pay.
With regards to Cruise are we talking Norwegian Cruise Line, in that case I think You just expanded the brand a tad , Eh?
No connection in ownership, of the Ship, I think . Correct me if wrong.
IceJock
Indeed
I am glad to hear this.
Massive potential for savings AND extra revenue. 43 øre per seatmile is not sustainable as the Irish lot is down to 27 øre.
And that gang of Cabin Captains need to sell me at least a coffee at 06.30 departure for Oslo, either that or quit mixing private Late in the galley and putting 17 crewbags in MY overhead,,,,,
With regards to Cruise are we talking Norwegian Cruise Line, in that case I think You just expanded the brand a tad , Eh?
No connection in ownership, of the Ship, I think . Correct me if wrong.
IceJock
Indeed
I am glad to hear this.
Massive potential for savings AND extra revenue. 43 øre per seatmile is not sustainable as the Irish lot is down to 27 øre.
And that gang of Cabin Captains need to sell me at least a coffee at 06.30 departure for Oslo, either that or quit mixing private Late in the galley and putting 17 crewbags in MY overhead,,,,,
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My bet is they will wait till the recession and go for the assets in the subsequent resulting firesale
As anyone can imagine opening new routes is an expensive business because even good routes are very rearly profitable from day 1, it takes time for a new route to become stablished (a minimum of a year?). Growing an airline is also expensive because it implies a whole raft of one off costs, like training new crew for example. In addition the issues with the RR 787 engines have brought costs that should not be ongoing. All those one off costs are the reason why Norwegian is no profitable, or bearly so, right now. In the other hand once you have made those investments running costs should be much lower and as new routes become consolidated the airline should be quite profitable. For these reasons judging Norwegain´s business model with a static picture of 2018 misses the point.
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That's a brave shout how long have you been in the business?
Air Europe, Dan Air, Air Berlin, Pan Am, TWA, I could go on forever with airlines that have been too big to fail or too well established to disappear.
Flash meet Pan.
WWW
Flash meet Pan.
WWW
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Great comparison mate..
