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KarelXWB
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Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 11:26 am

Summary of Norwegian Q2 results:

- Sees lower 2017 growth, higher unit costs.
- Analyst says results "light-years" behind forecast.
- Chief Financial Officer stepped down last week.
- Shares fall as much as 11 percent.

Norwegian Air Shuttle, a budget carrier trying to grab a larger slice of transatlantic flights, reported a slump in earnings on Thursday and said the outlook for both growth and costs was worse than previously expected.

Shares in Europe's third-largest budget airline behind Ryanair and EasyJet dropped as much as 11 percent to their lowest since October 2014, taking this year's losses to 34 percent.


Article
http://www.reuters.com/article/norweg-a ... SL8N1K40HZ
What we leave behind is not as important as how we've lived.
 
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jnev3289
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 11:44 am

So it still made a profit, has no problem securing financing, and had a 56% increase in MX costs for some reason? I think they're growing way too fast, and if they slowed that down a little they could be much more successful.
 
tphuang
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 11:49 am

This after the huge loss in q1, they are clearly doing worse this year than last and most likely won't make profit for the full year. Cfo stepping down is never great. This is when all the airlines are doing better this quarter compared to last year. Their entire business model is flawed.
 
andymartin
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 11:55 am

Bitten off more than they can chew??
 
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jnev3289
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 11:56 am

I really question the effectiveness of the LHLC model when the flight is longer than 8 or 9 hours. It is a lot harder to make money selling cheapo tickets when you have to pay for fuel and crew for that long. I think LHLC is a viable model if you keep the stage length between 6-8.5 hours.

LAX-BCN is 12 hours and BCN-LAX is 13 hours. So 25 hours of flying a 787-8 at ~$11,000/hour operating cost is $275,000 and that RT flight will have 291 seats on it each way (582 total). They need ~$475 from each passenger to just break even. If it is only a flight from East Coast-LON, then it cuts the per pax break-even point all the way down to $285 (15 hrs RT with 582 seats).

Rudimentary thought process, but the point remains.
Last edited by jnev3289 on Thu Jul 13, 2017 12:11 pm, edited 1 time in total.
 
TheDBCooper
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 12:00 pm

Leeham News has a little more insight into possible woes in Norwegian's future.
https://leehamnews.com/2017/07/12/is-no ... n-trouble/

I am sure adjustments will be made, but they have a future, perhaps not as bright as previously forecast.
 
kanye
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 1:35 pm

Anyone who can explain page 12 a bit more? Borrowings going from 20 billion to 25 billion NOK in just one year, i guess it's due to the amount of planes they are receiving?

To be honest it looks like this long-haul adventure is really not doing well, a loss of around 130 million euro in first 6 months from operating activities will be hard to recover in next 6 months. Main problem is they can't sell tickets for a price which covers the costs of producing the flights.
 
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Richard28
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 1:41 pm

Troubling numbers for Norwegian... they are suffering now, but also plan to double their fleet in the next three years.

With the competition upping their game and potential for more new comers once the A321LR enters the market (which will cover much of their long haul bread and butter)... it could be even more difficult ahead.

Looking at the numbers in the Leeham article, I find it interesting that only 75% of tickets are purchased online... For an LCC I'm surprised this number is so low?
 
MaverickM11
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 2:24 pm

Well there's your answer whether longhaul is working...and it's only going to get more competitive in that sector
E pur si muove -Galileo
 
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mercure1
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 2:30 pm

Main reported the reason for slight profit decline from 2016 was due to higher input oil price cost and the air passenger tax implemented by the government in Norway late last year.
The overall performance was positive in all of Norwegian’s main markets during the second quarter.
 
WaywardMemphian
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 2:45 pm

mercure1 wrote:
Main reported the reason for slight profit decline from 2016 was due to higher input oil price cost and the air passenger tax implemented by the government in Norway late last year.
The overall performance was positive in all of Norwegian’s main markets during the second quarter.


Oil is back down a bit ( Thanks USA fracking) so it should improve the third quarter a bit.
 
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KarelXWB
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 2:48 pm

What we leave behind is not as important as how we've lived.
 
Kikko19
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 2:49 pm

Oil can't be the factor. All airlines pay for it. And sas also operates older planes therefore should do far worse. And also has higher costs. So I guess DY made some mistakes.
 
tphuang
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 2:51 pm

mercure1 wrote:
Main reported the reason for slight profit decline from 2016 was due to higher input oil price cost and the air passenger tax implemented by the government in Norway late last year.
The overall performance was positive in all of Norwegian’s main markets during the second quarter.

that's because the rasm is up again for everyone. Whereas norway still had a decline. The airline operating environment will now be this favorable forever.
 
MaverickM11
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 3:14 pm

Not too assuring that unit costs are up 9% when ASKs are way up nearly 20% and avg stage is up 6%, and they don't seem to have any traction on the LF/revenue side to offset it...
E pur si muove -Galileo
 
usflyer msp
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 3:22 pm

I have always questioned Norwegian's LHLC business plan. They have stimulated traffic with low fares however there is no way those fares are covering their costs, even if the passengers buy ancillary services. There is a reason why every previous LHLC carrier failed...
 
LHUSA
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 3:36 pm

usflyer msp wrote:
I have always questioned Norwegian's LHLC business plan. They have stimulated traffic with low fares however there is no way those fares are covering their costs, even if the passengers buy ancillary services. There is a reason why every previous LHLC carrier failed...



This is exactly as I see it. LHLC is extremely difficult. DY has certainly been innovative and has a strong brand, but the question remains if that will be enough!
 
kanye
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 4:48 pm

mercure1 wrote:
Main reported the reason for slight profit decline from 2016 was due to higher input oil price cost and the air passenger tax implemented by the government in Norway late last year.
The overall performance was positive in all of Norwegian’s main markets during the second quarter.


Slight profit decline? EBITDA is from 1323,9 million NOK in Q2 2016 down to 58,5 during Q2 2017. What saved them was a sell of shares in Norwegian Bank which is a non-recurrent item.
Problem is Q1 looked even worse and yield is still declining every month. Their share price has fallen almost 50% this year.
Maybe they should just go back to what they did until 2013 because they did it well.
 
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SuperTwin
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 5:33 pm

As I mentioned in the other thread, as their 787 early-mover/user advantage is eroded and there is further yield pressure as the competition drives down their own costs via similar equipment/product offerings, now that teeny tiny razor thing margin (if it ever existed) is likely at risk. Problem here is that they've signed long term contracts/leases for these shiny new planes so they better find a way to pay for them all.

They would be remiss if they thought they could hold the cost advantage indefinitely. The incumbent competition these days is far more agile, ready and able to respond, Alitalia and SAA aside as they are zonbies propped up by their respective states. Do or die, so they do.
SuperTwin
 
gunnerman
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 6:30 pm

What will surprise many people is that Norwegian is heavily into aircraft leasing, which is a risky business done by few airlines. If you are a lessor like GECAS or AerCap, you can stand the losses from a few aircraft, but Norwegian is going to be hit hard by unwanted A320neos arriving in 2017 and 2018.
 
MIflyer12
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 6:37 pm

Norwegian Air, whose chief financial officer abruptly resigned after 15 years in the job last week, said the lower second-quarter results were due to significant additional costs for leasing aircraft.

"A larger share of leased aircraft in the fleet, and a larger share of 787 aircraft, lead to increased unit costs," the company said, referring to its acquisition of more Boeing 787 Dreamliners.

That's right from the Reuters article in the OP's link.

It is certainly odd to blame aircraft lease costs. Those are known before aircraft are inducted to the fleet! If they're saying - indirectly - that they're adding costs (from new aircraft) faster than they're adding revenue is does call into question the sustainability of long-haul ops. Maybe they're expecting revenues to improve quickly -- but if they don't don't have a big price advantage what's the point?
 
jbs2886
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 6:42 pm

gunnerman wrote:
What will surprise many people is that Norwegian is heavily into aircraft leasing, which is a risky business done by few airlines. If you are a lessor like GECAS or AerCap, you can stand the losses from a few aircraft, but Norwegian is going to be hit hard by unwanted A320neos arriving in 2017 and 2018.


Support for "unwanted A320neos"?
 
Varsity1
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 7:05 pm

Laker Airways part 2.

You guys love to ridicule me. At the end of the day Norwegian critics will get the last laugh.
 
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mooseofspruce
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 9:13 pm

I wonder how much they blew on ad-hoc charters after the Kirsten Flagstad 787-9 was out of service for over a month in CPH (hence the A332 lease from EB/Wamos on LGW-JFK) or the A343 lease from 5M/Hi Fly Malta last month, even if that was only for a week? I noticed that while they've been adding 787s, the flights they get sent on are mostly intra-europe flights from OSL to NCE, BCN, AGP, etc. prior to being based at LGW (with overflow to OSL and CPH, being limited in LGW without cutting their shorthaul network) as opposed to expanding more long haul frequencies or doing even more routes yet (while their recent route announcements over the last few months were aplenty indeed it probably could've started a bit earlier). I mean, they still made a profit, no? *shrug*

Well, with BA at LGW, IB/Level at BCN, and now UA at EWR responding to them what can one really expect? Just this month they're getting two 787s (the first delivered yesterday), and as many as two or three more are already coming online relatively soon. I suppose there's always waiting until the summer season is through along with the inauguration of SEA, DEN, and SIN to find out for sure, which'd also make even a little preview for AUS, ORD, and further inaugurations/expansions out of FCO and CDG.

But then again, these numbers are for Norwegian as a whole, including DY, D8 and DU (even though the latter code isn't active) aren't they? Honestly at this point I'm expecting their operation within Europe supports their long haul operation which can't be that bad, although then again they have no feed on this side of the Atlantic, and rely on their low fares to attract O&D/self-connecting traffic which while in high volume indeed can't be the best for yields.

gunnerman wrote:
What will surprise many people is that Norwegian is heavily into aircraft leasing, which is a risky business done by few airlines. If you are a lessor like GECAS or AerCap, you can stand the losses from a few aircraft, but Norwegian is going to be hit hard by unwanted A320neos arriving in 2017 and 2018.

Those are the ones they're leasing to UO (HK Express), yes? Not that I'd know where to find out, is it that they're having trouble finding homes with other airlines?
 
gunnerman
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 10:36 pm

mooseofspruce wrote:
gunnerman wrote:
What will surprise many people is that Norwegian is heavily into aircraft leasing, which is a risky business done by few airlines. If you are a lessor like GECAS or AerCap, you can stand the losses from a few aircraft, but Norwegian is going to be hit hard by unwanted A320neos arriving in 2017 and 2018.

Those are the ones they're leasing to UO (HK Express), yes? Not that I'd know where to find out, is it that they're having trouble finding homes with other airlines?

Yes, UO is taking the six A320neos arriving this year. But the problem is that the aircraft were ordered with the P&W PW1000G engines which have well-publicised problems, and airlines have a habit of resisting taking delivery until these problems are resolved. And a resolution can't come fast enough for Norwegian which has another 13 due to arrive in 2018.

It's been said many times that a plane on the ground earns no money, but for a lessor there are added costs such as loan interest, insurance and parking to pay whilst no lease payments are received. Potentially, these costs can amounts to many millions of dollars and put the company in trouble.

Now, it can be said that it was just unlucky that the engine was troublesome, but the blame has to be put squarely on the board for carrying out such a risky business.
 
Waterbomber
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Re: Norwegian Air Q2 earnings slump

Thu Jul 13, 2017 11:02 pm

They dont know what they re doing, as i said many times. Again, it s a shame because they have funds and opportunity, they re just not using it the right way. They should survive though, unless things hange dramatically on the operating or funding side. Why dont they use their A320 neos to expand? Leasing them out to China sounds like they re quite desperate in their effort to sideline them.
 
PanHAM
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 10:22 am

Varsity1 wrote:
Laker Airways part 2.

You guys love to ridicule me. At the end of the day Norwegian critics will get the last laugh.



Laker was murder

This here rather is Braniff - suicide by too fast Expansion.

They should start to consolidate before the single aisle US boondocks Services break their neck.
Was Erlauben Erdogan!!!
 
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Mortyman
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 10:37 am

mooseofspruce wrote:
I wonder how much they blew on ad-hoc charters after the Kirsten Flagstad 787-9 was out of service for over a month in CPH (hence the A332 lease from EB/Wamos on LGW-JFK) or the A343 lease from 5M/Hi Fly Malta last month, even if that was only for a week? I noticed that while they've been adding 787s, the flights they get sent on are mostly intra-europe flights from OSL to NCE, BCN, AGP, etc. prior to being based at LGW (with overflow to OSL and CPH, being limited in LGW without cutting their shorthaul network) as opposed to expanding more long haul frequencies or doing even more routes yet (while their recent route announcements over the last few months were aplenty indeed it probably could've started a bit earlier). I mean, they still made a profit, no? *shrug*

Well, with BA at LGW, IB/Level at BCN, and now UA at EWR responding to them what can one really expect? Just this month they're getting two 787s (the first delivered yesterday), and as many as two or three more are already coming online relatively soon. I suppose there's always waiting until the summer season is through along with the inauguration of SEA, DEN, and SIN to find out for sure, which'd also make even a little preview for AUS, ORD, and further inaugurations/expansions out of FCO and CDG.

But then again, these numbers are for Norwegian as a whole, including DY, D8 and DU (even though the latter code isn't active) aren't they? Honestly at this point I'm expecting their operation within Europe supports their long haul operation which can't be that bad, although then again they have no feed on this side of the Atlantic, and rely on their low fares to attract O&D/self-connecting traffic which while in high volume indeed can't be the best for yields.

gunnerman wrote:
What will surprise many people is that Norwegian is heavily into aircraft leasing, which is a risky business done by few airlines. If you are a lessor like GECAS or AerCap, you can stand the losses from a few aircraft, but Norwegian is going to be hit hard by unwanted A320neos arriving in 2017 and 2018.

Those are the ones they're leasing to UO (HK Express), yes? Not that I'd know where to find out, is it that they're having trouble finding homes with other airlines?



Apparently they have spent around 1,2 billion Norwegian Kroner ( NOK ) on chartered Aircraft and other crisis soultions in the last few years. ( Does'nt say how many years. It's behind a paywall )

https://www.dn.no/nyheter/2017/07/13/17 ... iselosning
 
gunnerman
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 11:22 am

Waterbomber wrote:
They dont know what they re doing, as i said many times. Again, it s a shame because they have funds and opportunity, they re just not using it the right way. They should survive though, unless things hange dramatically on the operating or funding side. Why dont they use their A320 neos to expand? Leasing them out to China sounds like they re quite desperate in their effort to sideline them.

They ordered 100 737 MAXs for their use and 100 A320neos to lease out. Until the engine problems are fixed, those A320neos are just a liability.
 
runway23
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 12:25 pm

Long term this will finish like Zoom, Flyglobespan, Laker, Braniff. History goes against Norwegian here.

I don't think spreading their 787s around different European bases is helping either.

Problem for Norwegian is how do they slow their growth if an economic crisis occurs or oil shoots back up, what do they do with all the planes they have on order if there's a negative effect on the market, how do they avoid costs rising as they expand.

There are a lot of worrying questions which make this airline uncertain in the long run.
 
kanye
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 1:54 pm

There is an article today in Norwegian media claiming they were so low on cash so they were risking to break the terms with the debtors. Therefore they had to do this sell of shares and make a different accounting of the value to make it look better.
I guess it will not be an issue now as third quarter will bring some money, however i really doubt they will manage to make a profit this year. So far this year they made an loss of 1,3 billion NOK (140 million EUR) vs last year at this time they had an profit of 700 million NOK (75 million EUR).
The CEO said they spent 145 million NOK this quarter on leasing planes. I Think a big part of the problem is his optimism Everything will work out. Short of pilots again and planned to get the brand new 737MAX as one of the first Airlines in the World and after a couple of weeks start flying over the Atlantic. He is a visionary but to a point where he becomes a fool actually.

https://www.dn.no/nyheter/2017/07/14/12 ... e-i-banken
 
PanHAM
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 2:07 pm

A former German Chancellor, Helmut Schmidt, is quoted having said that "if you have visions, go see a doctor..

We'll see how many cattle they find to squeeze into a short/medium haul aircraft bringing the to such beautiful places like Newburgh NY.At least it's a scenic ride by bus to the City. Is that west side bus termial still a dump?"
Was Erlauben Erdogan!!!
 
jbs2886
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 2:27 pm

runway23 wrote:
Long term this will finish like Zoom, Flyglobespan, Laker, Braniff. History goes against Norwegian here.

I don't think spreading their 787s around different European bases is helping either.

Problem for Norwegian is how do they slow their growth if an economic crisis occurs or oil shoots back up, what do they do with all the planes they have on order if there's a negative effect on the market, how do they avoid costs rising as they expand.

There are a lot of worrying questions which make this airline uncertain in the long run.


And Air Asia X? Scoot? Nokscoot? JetStar? WOW? Jin air? Just because similar airlines have failed in the past doesn't mean they will in the future. We all said LCCs in a legacy don't work, yet now Rogue is excelling. Same with JetStar and Scoot. The aircraft and dynamics have changed.
 
LHUSA
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 3:38 pm

Air Asia X? Outside of Australia, their longhaul model hasn't exactly been consistent

Scoot? Backing of SQ

JetStar? Backing of QF

WOW? Has yet to prove itself really

Jin air? How much longhaul do they do? I believe they have a few 777s but only for shorthaul.

Rogue? Again, backed by a legacy.

The legacy carriers have seemed for find a formula that works well for a longhaul LCC under their umbrellas. DY doing longhaul LCC on it's own does bare some substantial similarities to those that have failed in the past (Zoom, SilverJet, MaxJet, EOS, Laker, Braniff). I'm aware that MaxJet, EOS and SilverJet were catering to business travelers, but still an LCC attempt across the Atlantic.
 
jbs2886
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 3:45 pm

LHUSA wrote:
Air Asia X? Outside of Australia, their longhaul model hasn't exactly been consistent

Scoot? Backing of SQ

JetStar? Backing of QF

WOW? Has yet to prove itself really

Jin air? How much longhaul do they do? I believe they have a few 777s but only for shorthaul.

Rogue? Again, backed by a legacy.

The legacy carriers have seemed for find a formula that works well for a longhaul LCC under their umbrellas. DY doing longhaul LCC on it's own does bare some substantial similarities to those that have failed in the past (Zoom, SilverJet, MaxJet, EOS, Laker, Braniff). I'm aware that MaxJet, EOS and SilverJet were catering to business travelers, but still an LCC attempt across the Atlantic.


My point is that not that long ago we all dismissed LCCs under the umbrella of a legacy as impossible. As you just said, "legacy carriers have seemed [to] find a formula that works well." Perhaps Norwegian has found a formula that works for a standalone long-haul LCC.
 
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SuperTwin
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 4:00 pm

kanye wrote:
I guess it will not be an issue now as third quarter will bring some money, however i really doubt they will manage to make a profit this year. So far this year they made an loss of 1,3 billion NOK (140 million EUR) vs last year at this time they had an profit of 700 million NOK (75 million EUR).


If they are hurting for cash now then they will have some considerable liquidity issues soon. Cash does not just turn up in the 3rd quarter since airlines are paid when a flight is booked. Typically this is a few months in advance of the date of travel. The money they were paid to fly people in this 3rd quarter would have been received in Q1 or Q2.

Now is the time for DY to deliver on the promise they sold weeks or months ago.

As an aside, I think the CEO is gambling and betting hard, very hard. If demand takes a turn they will be caught with their pants down.
SuperTwin
 
usflyer msp
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 4:01 pm

jbs2886 wrote:
Perhaps Norwegian has found a formula that works for a standalone long-haul LCC.


But they have not found that formula as that is why they are having significant loses !?!?!?!?!?!
 
jbs2886
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 4:12 pm

usflyer msp wrote:
jbs2886 wrote:
Perhaps Norwegian has found a formula that works for a standalone long-haul LCC.


But they have not found that formula as that is why they are having significant loses !?!?!?!?!?!


Not even sure what you are saying as your comment makes no sense. Regardless, just because there are losses doesn't mean they haven't found a formula. Their network is in its infancy, even legacies often lose money on new routes and new hubs. It also sounds like some imprudent planning and having to wet-lease caused some problems. You are drawing a conclusion that the business model doesn't work because there are "significant losses" when you haven't looked at the entire picture.
 
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readytotaxi
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 4:24 pm

I would guess that IAG are having a quiet giggle.
you don't get a second chance to make a first impression!
 
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jnev3289
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 4:27 pm

readytotaxi wrote:
I would guess that IAG are having a quiet giggle.

And then they look at the joke that is Level and return to reality
 
usflyer msp
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Re: Norwegian Air Q2 earnings slump

Fri Jul 14, 2017 4:27 pm

jbs2886 wrote:
usflyer msp wrote:
jbs2886 wrote:
Perhaps Norwegian has found a formula that works for a standalone long-haul LCC.


But they have not found that formula as that is why they are having significant loses !?!?!?!?!?!


Not even sure what you are saying as your comment makes no sense. Regardless, just because there are losses doesn't mean they haven't found a formula. Their network is in its infancy, even legacies often lose money on new routes and new hubs. It also sounds like some imprudent planning and having to wet-lease caused some problems. You are drawing a conclusion that the business model doesn't work because there are "significant losses" when you haven't looked at the entire picture.


It has been 4 years, Norwegian long haul is not an infant anymore. Time for it to stand on its own two feet...
 
tphuang
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Re: Norwegian Air Q2 earnings slump

Thu Jul 20, 2017 3:00 am

another article from leeham on Norwegian
https://leehamnews.com/2017/07/19/norwe ... le-part-2/
Basically, their profit this quarter comes from selling of 2.5% of Bank Norwegian
Without the extra cash from sale of the company’s assets, the quarterly result would have been NOK-1,100m ($-137m) and half year results NOK-2949m ($-356m)– substantial loss, clearly worse than the company’s guidance.


Here is the kicker
The result of the softening yield (ticket price for sold seat) described in last week’s article and the increasing costs, is a difference between Unit Revenue and Unit Cost of -0.07NOK for the quarter (0.36NOK-0.43NOK in Figure 5).

Norwegian’s first two quarters are weaker than the third and fourth. But it will need good further quarters to avoid selling off more of the silver.
 
downdata
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Re: Norwegian Air Q2 earnings slump

Thu Jul 20, 2017 7:42 am

Lets see how the rest of the year pan out before anyone panics... unless you are a shareholder in which case....
 
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KarelXWB
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Re: Norwegian Air Q2 earnings slump

Tue Jul 25, 2017 2:21 pm

MIflyer12 wrote:
It is certainly odd to blame aircraft lease costs. Those are known before aircraft are inducted to the fleet! If they're saying - indirectly - that they're adding costs (from new aircraft) faster than they're adding revenue is does call into question the sustainability of long-haul ops. Maybe they're expecting revenues to improve quickly -- but if they don't don't have a big price advantage what's the point?


According to Tony Fernandes (AirAsia) it takes at least 12 months to break even on an A330. Therefore you don't want to add too much aircraft in a short period of time.

The 787 is more expensive. Perhaps Norwegian is adding too many aircraft too quickly.
What we leave behind is not as important as how we've lived.

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