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Norwegian Lay offs

Old 4th Oct 2019, 10:02
  #21 (permalink)  
 
Join Date: Dec 2010
Location: Limbo
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Originally Posted by Doors to Automatic View Post
From detailed analysis I have carried out to advise investors in DY, I would say that Plastic787ís analysis is absolutely spot on.

Last year the airline made NOK 1.3bn during Q3, which was swallowed up halfway through Q4. Since then they have issued more shares, sold off assets and effectively defaulted on a huge loan, putting up their LGW slots as security in return for an extension. I am willing to bet the bondholders had no choice.

Despite their proclamations about turning the company around and morphing dramatically from growth to profitability, Q1 and Q2 seat costs are around 20% higher than 2018.

Summer 2019 passengers and revenues have been broadly flat in July and August and so unless there has been a dramatic reduction in the seat cost trend it is likely Q3 will not make anywhere near the profit of Q3 2018.

If this comes to pass (we should find out next week), it will be a very tough Winter. I hope I am wrong but I donít see a rosy future for this airline, just based on figures and trends I have analysed recently,
I will definitely hold you up on this statement when the Q3 Numbers are presented late october.

Last edited by directmisbi; 4th Oct 2019 at 18:11.
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Old 4th Oct 2019, 10:06
  #22 (permalink)  
 
Join Date: Feb 2013
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Good news?

September numbers out at DN.no.
3.3 million pax in September down 4 % from last year.
90% seat factor and well on their way to save 2 BillionNkr ( 200 mill Euro).
Stocks up.
Disregard my earlier negative attitude because I had to pay 75 euro for extra bag the other day, I still think there is a positive trend.
What is more important the Investors here north are optimistic, so there is a good chance of a successful recovery.

Regards
Cpt B
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Old 4th Oct 2019, 10:30
  #23 (permalink)  
 
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If I remember right 2018 Q3 profit was mainly due to exceptional elements, not due to the good performance of the core business, so I do expect worse results this time around, unless some other non recurrent elements (eg Rolls Royce compensation or things like this) comes up again.
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Old 4th Oct 2019, 12:35
  #24 (permalink)  
 
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Originally Posted by directmisbi View Post


I will definitely hold you you up on this statement when the Q3 Numbers are presented late october.
Are you suggesting than my assumptions (which are based on fact) are wildly out? Perhaps you would be kind enough to show me where I have gone wrong.....
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Old 4th Oct 2019, 13:19
  #25 (permalink)  
 
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I understand the nature of this game is fairly seasonal, but the constant requests for people to take unpaid leave etc still leave a bad taste.
We produce the profits in the summer and work hard and expect a bit of down time in the winter, but unfortunately my mortgage isnít seasonal.
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Old 4th Oct 2019, 13:26
  #26 (permalink)  
 
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Idea: fly pax in summer, cargo in winter!
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Old 4th Oct 2019, 15:02
  #27 (permalink)  
 
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Ask Norwegian management when the compensation from RR and Boeing is arriving. They have no answer. It's been in "negotiation phase " forever. Have they even received a single dime? Is it even going to be cash? It's the elephant in the room no one is talking about and will dictate Norwegian's future far more than FUC*US2019. And btw, 200 million profit is nothing. You burn through that in 2 months as history has shown
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Old 6th Oct 2019, 22:50
  #28 (permalink)  
 
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If you had a large number of orders with me but I had messed up so owed you a bit of cash back.....but I had concerns over your ability to operate as a going concern in the forseeable future....Would I:
(a) give you a cash refund now
(b) kick the refund process into touch to see how it all plays out
(c) if push comes to shove give you a discount at a later date on future orders
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Old 7th Oct 2019, 09:57
  #29 (permalink)  
 
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Originally Posted by MCDU2 View Post
If you had a large number of orders with me but I had messed up so owed you a bit of cash back.....but I had concerns over your ability to operate as a going concern in the forseeable future....Would I:
(a) give you a cash refund now
(b) kick the refund process into touch to see how it all plays out
(c) if push comes to shove give you a discount at a later date on future orders

well i I am a bit stumped here, do I ask for 50-50, phone a friend, I know let's ask the audience.
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Old 7th Oct 2019, 12:22
  #30 (permalink)  
 
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Originally Posted by rotorwills View Post



well i I am a bit stumped here, do I ask for 50-50, phone a friend, I know let's ask the audience.
Well don't bother asking the host - he will tell you everything is rosy and the airline is destined for profitability.
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Old 8th Oct 2019, 08:20
  #31 (permalink)  
 
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Flightglobal has produced a well written, and very professional article about the situation in Norwegian. A comitted observer, no doubt.
https://www.flightglobal.com/news/ar...bility-461279/
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Old 8th Oct 2019, 19:58
  #32 (permalink)  
 
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Originally Posted by directmisbi View Post
Flightglobal has produced a well written, and very professional article about the situation in Norwegian. A committed observer, no doubt.
https://www.flightglobal.com/news/ar...bility-461279/
Interesting read..........thanks for sharing.... .....

This made me smile

Norwegian itself points out that as it runs a premium product alongside its low-cost tickets, its position is not too dissimilar to how British Airways or Virgin Atlantic are operating the transatlantic market. "I think everybody realises the business model does work," says Norwegian.

If they truly believe this then there is no hope.......
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Old 8th Oct 2019, 20:06
  #33 (permalink)  
 
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JonEMA - I also liked Andrew Lobbenberg’s words:

”"The business was run around the growth agenda – they had too many aeroplanes," says Andrew Lobbenberg, head of European transport equity research at HSBC. "The tail was wagging the dog because the network was being designed to absorb the fleet plan rather than the fleet plan was being designed to meet the network."

It seems absolutely incredible that so many aircraft were ordered in one go. Not just the incumbent 737s but 787s and A321s. I didn’t know until today that there are yet more on order - 60 or so A320s.

Saying “we are switching from growth to profitability” is completely meaningless when you still have 200 aircraft on the way and little idea where to deploy them profitably.

What on earth were these people thinking?

if this airline survives with its dysfunctional fleet and business model, it will be the biggest miracle in the history of aviation.
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Old 8th Oct 2019, 21:52
  #34 (permalink)  
 
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Originally Posted by JonEMA View Post
Interesting read..........thanks for sharing.... .....

This made me smile

Norwegian itself points out that as it runs a premium product alongside its low-cost tickets, its position is not too dissimilar to how British Airways or Virgin Atlantic are operating the transatlantic market. "I think everybody realises the business model does work," says Norwegian.

If they truly believe this then there is no hope.......
Willie Walsh disagrees :

Walsh goes on to praise the "exceptional job" done by Norwegian's chief executive Bjorn Kjos, such as the proof-of-concept work relating to long-haul low-cost operations.

"He's proven, if not to everybody but certainly to us, that the market exists and the customer will embrace the business model."



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Old 8th Oct 2019, 22:01
  #35 (permalink)  
 
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Originally Posted by Doors to Automatic View Post
JonEMA - I also liked Andrew Lobbenberg’s words:

”"The business was run around the growth agenda – they had too many aeroplanes," says Andrew Lobbenberg, head of European transport equity research at HSBC. "The tail was wagging the dog because the network was being designed to absorb the fleet plan rather than the fleet plan was being designed to meet the network."

It seems absolutely incredible that so many aircraft were ordered in one go. Not just the incumbent 737s but 787s and A321s. I didn’t know until today that there are yet more on order - 60 or so A320s.

Saying “we are switching from growth to profitability” is completely meaningless when you still have 200 aircraft on the way and little idea where to deploy them profitably.

What on earth were these people thinking?

if this airline survives with its dysfunctional fleet and business model, it will be the biggest miracle in the history of aviation.
The Airbus order will soon be transferred into a joint venture. This has indeed been the plan ever since the original airbus/boeing order was annonced back in 2012.

“A plan to sell around 70 spare on-order Airbus aircraft to a newly formed joint-venture leasing company are ongoing, Norwegian says, citing "positive" conversations. If successful, this "could be a very large step toward de-risking the business", notes Lobbenberg.

As I mentioned earlier, there will be some serious backtracking in here from all the bezzerwizzers IMHO. I guess time will tell...

Last edited by directmisbi; 8th Oct 2019 at 22:21.
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Old 9th Oct 2019, 08:18
  #36 (permalink)  
 
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Ok - so that still leaves over 100 aircraft to find profitable homes for. Not saying it is impossible, but it will require an eye-watering amount of cash the airline doesnít have.
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Old 9th Oct 2019, 09:39
  #37 (permalink)  
 
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Originally Posted by directmisbi View Post
Willie Walsh disagrees :

Walsh goes on to praise the "exceptional job" done by Norwegian's chief executive Bjorn Kjos, such as the proof-of-concept work relating to long-haul low-cost operations.

"He's proven, if not to everybody but certainly to us, that the market exists and the customer will embrace the business model."
Was this at Kjos's leaving do..?......Walsh often blows sunshine up his competitor's arses (media training - never slag odd the competition)........but don't get confused. If the model was working IAG would have piled in by now.....

The harsh reality is that their transatlantic services are in no way similar to those of BA,VS,AA,DL et al all of whom have the, frequency, connectivity, and travel management contracts in place to service the high yielding, late booking business passenger who provide the profits. i
Norwegian, on the other hand, has none of these advantages which leaves them squarely in the highly competitive point to point leisure market which is highly seasonal and mostly unprofitable. In short, they have a yield problem that IMHO they simply cannot address given where they are. ........oh yes, and advertising £99 pound fares across the pond next year only makes matters worse.......
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Old 9th Oct 2019, 09:59
  #38 (permalink)  
 
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Originally Posted by directmisbi View Post
Willie Walsh disagrees :

Walsh goes on to praise the "exceptional job" done by Norwegian's chief executive Bjorn Kjos, such as the proof-of-concept work relating to long-haul low-cost operations.

"He's proven, if not to everybody but certainly to us, that the market exists and the customer will embrace the business model."
Ask Willie how he is getting on with that with Level? In fact just read the accounts.
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Old 9th Oct 2019, 10:05
  #39 (permalink)  
 
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What exactly have Norwegian proven? That customers are willing to pay for a product that is being sold below cost? I think if anyone didn’t think that was the case, they’d be certifiable.. The proof in whether the model works or not is not sentiment of passengers but cold hard financials. Passengers love the A380, if that was the metric there’d be thousands of the things flying around the skies. Theres not and that’s because of the financials of the aircraft. Norwegian’s financial statements do not make pretty reading and are the ultimate litmus test of the Long Haul Low Fares model. Directmisbi what is it you believe that Norwegian are doing or what advantage do you believe they have that makes their prospects fundamentally any different to that of Laker etc? With Norwegian first of all it was expand to profitability now it’s shrink to profitability. Are there not major red flags there in that last sentence that the model is all wrong?
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Old 9th Oct 2019, 10:07
  #40 (permalink)  
 
Join Date: Mar 2010
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Analysis of route profitability ex Helsinki


posted today on LinkedIn by an agency who tracks fares by route and mixes the revenue with costs published in airline accounts.

Most of these routes have been culled or suspended but LGW and FCO remain according to the post.

Would be interesting to see the same analysis network wide which, given they are keeping LGW and FCO at -29% and -22% margin respectively will likely show that there aren't too many 'profitable' routes that they can focus on.....
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