Yep economics normally wins and the 787 is mile ahead of the nearest competitor, no WiFi on long haul until late 18

Out of cash??
 

Probably. Norwegian is a company that if they moderate the LH expansion and keep the SH expanding they can get back on profitable numbers very fast. They should sale more of those 787 and wait for the A321LR to expand LH.

Its beginning to sound like AirEurope, that went bust in 1991. I remember this event well. From wikipedia "Air Europe's success came to an end – the cost of borrowing rose (to the detriment of highly debt-leveraged companies) and financial problems beset its parent company"

OMG, this is so similar to Norwegian's predicament. The cost of borrowing is rising, and political tensions are too.

I would hate to see Norwegian beaten down by BA and IAG. Its such a thorn in BA's side, but as usual, the incumbents still win. BA AF KLM will still be around , still charging the earth, long after NLH has been gobbled up.

Anyone putting up €40000 for their B787 training bond at the moment needs to be prepared for the worst.

no down payment necessary. just a guarantee you can pay.

....which may be called on in a liquidation/bankruptcy scenario? Are you not a debtor to the company which administrators would chase?

A4

....er no. An administrator is required to recover as much money as possible on behalf of creditors (banks). I have no idea if it is an enforceable contract between DLH, the type rating company or agency and the pilot.

I have no desire to see DLH fail - I’ve been on the receiving end of an airline failure and it’s a horrible place to be. I’m just asking the question - that’s all.

A4

I’d also be very surprised if it was enforceable in the event of a failure.....but with way employment practices/contracts have gone in the last few years in our industry and the bonus driven culture of management remuneration it’s not beyond belief.

A4

You are all getting a bit ahead of yourselves. Norwegian has a big pile of debt, true and it is making a small loss while going through some explosive growth, true but....

It owns a whole pile of aircraft
It owns a whole load of very valuable slots at main airports
It has firm delivery slots for A320 neos, 737 MAX and 787 worth a whole pile of money (that is just the delivery slots)
It has the backing of the Norwegian sovereign wealth fund (who has a long term investment horizon unlike other funds)
It has just now gone through the first equity raise in 9 years which has been fully subscribed by existing shareholders. It hasn't even tapped the open market.
The existing debt, they say, is financed at low long term fixed rates
It has on the table a buyout offer from IAG

Expansion costs money. New routes take time to mature, newly hired staff take time and money to be trained and to be productive, AC cost money, etc, etc, etc The amazing thing is that they are able to carry out such explosive growth without raising more (much more ) capital. Some companies use their profits to make a dividend pay out, Norwegian is using them to grow and attain a critical size to allow the necessary economies of scale to compete. I am sure the Norwegian sovereign wealth fund is happy with that.

Which on the other hand is quoted in the contract, that if this is the case, the bank guarantee will become invalid. Rishworth, is btw the actual employer. The company which rents out its services to Norwegian. So if big daddy goes bust, no liquidator will ever be able to take in those guarantees. This is also the case for any other contract (e.g. the SEPLA Collective agreement in Spain). Here, the guarantee runs (again!) over OSM Aviation and not Norwegian itself.
It is clearly stated that the bonding can ONLY be claimed if the employee choses to leave within a certain amount of time. Which in this case is three years. No money will be claimable for any other reason (except of course misconduct) than the one stated above.

Stop spreading horse!!!!!.

Where do you find that the Norwegian sovereign wealth fund holds any ownership in Norwegian Air Shuttle? I've just checked on their webpage and I cannot find any information that they hold a single share in NAS.

Well they don't pay out any dividends because there is hardly any money to pay out even if they wanted to. Their EBITDA margins looks like a roller coaster last 10 years and the OP cash flow hardly increase at all. Looks like they expand with negative profitability. The question seems to be for how long the lenders/shareholders accept no return on their money. It will always be a point where they have had enough. Unfortunately the only financial curves that are beautiful to look at when you screen NAS is their debts and revenue.

Training bonds
 

For some reason the repayment of training bonds to bankrupt companies is etched into the psyche of some pilots back in 1999 when Debonair went bust the staff / administrators meeting was dominated by questions about training bond repayment. The administrators became increasingly baffled by the same questioned asked repeatedly when they had said they could not ask for the pilots under bond to repay anything.

The fact of the matter is the courts would take a very dim view of company bankruptcy administrators taking action to recover training bond money from a person who had just had the means to repay the debt removed by the very bankruptcy they are administering.

This is a historical comment on the industry and not a comment on any other issue.

lansen - if you note my post had a question mark at the end of it......so no spreading of horse$hit on my part. But thanks for the answer.

A4

Folketrygdfondet owns 3.57 million shares. The second largest owner behind the CEO and founder.

Another 2.13 million shares are owned by DNB Asset Management AS, which is in turn owned by the ministry of trade and industry.

All freely available info, for example at:

NAS Stock Price & News - Norwegian Air Shuttle ASA - Barron's

If they had chosen to not spend the money on growing the company there would be plenty of profits and money to pay out.

Yes it is. It wouldn't pass the daily mail test for a start. You could destroy the liquidators with one interview on Radio 5/LBC/Redundant of Crawley on the third page of the daily mail.

I don’t work for Norwegian. And I fully agree with what you say. Most people have who ‘talk down’ Norwegian have next to no idea of business or economics and simply fail to understand the first thing about growing a business or the concept of debt.

I think it's fair to say that nobody knows anything about the financing of the aviation business until the day before the receivers walk in. Airlines do have a bit of a habit of spectacularly imploding. Not saying Norwegian is likely to go under, but if it did, or if IAG take it over, who'd be massively surprised?

I'm familiar with a bankruptcy where the bonds were claimed. It went like this.

-Company in receivership but did not fire anyone.
-Other job was available immediately forcing the bonded people to resign in order to get this job within a limited time frame.
-As soon as they submitted their resignation the bond was claimed.
-A few days after the last bonded person resigned the company declared bankruptcy.

Don't think something similar can't happen.

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.