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vhqpa
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 7:18 am

af773atmsp wrote:
Perhaps its a good thing all of my booked European flights for this summer aren't with Norwegian. Big switch from 2015 when I flew them on two roundtrips and two one-ways. Service and fares were good, but this time around fares were more expensive than SAS except for one but the timing wasn't convenient.


Same here I have a Euro trip planned for next winter. The only DY sector I'm booked on is OSL-TOS. But I after the Half Year results were announced I booked a refundable SAS ticket at similar times just in case. I've been following the company for a couple of years and It will be shame to see them overexpand themselves out of business.

If DY is still operating my dilemma is do I stick with DY and refund SAS? Or do I ditch DY and just take SAS which includes lounge access (miles are irrevelent as I'm not a member of any Star Alliance program). The DY fare was only 919 NOK which is neither here or there. But it could be my only chance to fly them.
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jhz94
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 7:18 am

Weren't some bonds due in May (remember I read something at DN a while ago)? I assume the interest on the new ones will be significantly higher than the current ones if someone is willing to risk their money.
Did you know that you can run diesel cars on Jet A1?
 
RickNRoll
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 7:31 am

armchairceonr1 wrote:
kanye wrote:
LupineChemist wrote:
Who in the world would invest in them right now!

Didn't they only have 4 billion NOK or so in cash in their full year results? (ignoring the Leeham article saying it might be dodgy accounting). They are getting dangerously close to liquidation. Given their needs they might end up having to sell and lease back with horrible terms due to desperation and still have that debt. I could see that raising their CASK enough to not even be able to break even in the summer this year.

At this point I'm going to be surprised if they see 2019.



They also released info today that they managed to secure 1,3 billion NOK in new Money from the owners. But like this they will burn that Money fast.

They didn't secured that equity yet, private placement is still ongoing. Result (including stock price) of private placement is expected at tomorrow morning.


"private" means a company that will want to slash costs and sell whatever they can to get cash before they try to onsell it again. I doubt there is much in the way of costs to cut so "private" probably won't work out.
 
armchairceonr1
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 7:32 am

jhz94 wrote:
Weren't some bonds due in May (remember I read something at DN a while ago)? I assume the interest on the new ones will be significantly higher than the current ones if someone is willing to risk their money.

Yes, 1250 million NOK due 22nd of May. Their listed bonds prices has dropped significantly in last weeks. For example NAS07 maturity 11 Dec-19 yield is now around 12%.
https://www.oslobors.no/ob_eng/markedsa ... E/overview
 
CXfirst
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 9:09 am

andymartin wrote:
RIP Norwegian, a basket case airline if ever there was one , it wont be any loss to the industry and when the final nail is hammered into the coffin all the other airlines trying to compete with Norwegian can stop this rapid race to the bottom with quality and service returning to the major players.


That rapid race to the bottom was already completed before DY, and will continue without DY. If anything, DY seems to give a superior service, and has consistantly won awards in the low cost segment. It will be a huge loss for travelers in Europe.

Norwegian proved before longhaul that their model worked, and they were earning money on it. Sentiment in Norway seems to be one of little worry, at least outside of the industry. Norwegian has become so important in their home market, that it just seems people can't fathom a situation without them here.
 
sevenair
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:16 am

Absolutely disgusting to see the pleasure a.net would have at seeing people out of a job with no wages to feed their children, the stress of finding a new job and worrying about paying their mortgage especially when most of you probably don't even work for an airline let alone work for one who has been impacted by Norwegian's service. But this is the same a.net where Branson and MOL are now heroes due to their anti democratic views so it's to be expected!

Still, you can't put a price on a pretty picture of planes lined up with no work whilst each grounded craft represents dozens of shattered dreams, strained personal lives and financial ruin.

Bravo guys. Bravo.
Last edited by sevenair on Wed Mar 21, 2018 10:19 am, edited 1 time in total.
 
andymartin
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:18 am

Yep, plenty of low mileage, one careful owner 789s to be had for a bargain.
 
sevenair
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:27 am

Hopefully another new LCC will take them on and continue the LH LCC.

Norwegian have been instrumental in giving customers choice. If economy basic, LEVEL and the new BA densification program for its LGW fleet were all in direct response to Norwegian do we think that airlines will ditch economy basic, LEVEL will vanish and we'll see 9Y on BA's beach fleet again? Or will we see fares kept low? Will we hell.

The consumer always loses in these situations. Airlines are offering a basic product with an appropriate price offering. If/when Norwegian go you'll see the same basic products offered at legacy prices once again.

Hopefully WOW could take them onboard and keep LGW TATL operations fed with Worldwide by easyJet. Or perhaps a cooperation between then. WOWgian Atlantic anyone?

It would be worth it just to see the upset on here.
 
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:36 am

sevenair wrote:

Bravo guys. Bravo.


I agree. Sad, immature, and pathetic.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
B777LRF
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:42 am

mcdu wrote:
They all took those jobs trying to put the established carriers out of business. Now many will be looking for jobs with those same carriers.


It's quiet easy to tell when someone is just pulling 'facts' out of a hat, and presenting it as truth. The above is a fine example of that.

mcdu wrote:
Since they don’t have employees, as everyone works for staffing companies doing business with NOrwegian they are all just nomad employees.


Norwegian, in all its disguises, keep around 9.000 people in beer and sandwiches, and of those roughly 2/3 are directly employed. You really should try injecting facts in your rantings.

mcdu wrote:
There is not a lot of sympathy in this industry for anyone tied to the NOrwegain brand. They may find it difficult getting jobs elsewhere.


Again, you're talking out of your posterior or, even worse, are trying to equate US practices with that of the rest of the world. Should Norwegian suddenly and spectacularly fail, airlines will be lining up to hire their redundant staff. Maybe not the US3, but that's largely irrelevant as the vast majority of Norwegian's staff don't have the necessary permits to work in the US.

Goodyear wrote:
Looking forward to getting shots of their fleet in storage soon.

9.000 people wearing a Norwegian uniform and another roughly 30.000 who depend on their company having Norwegian as a customer to maintain their jobs. All that mean nothing to you, you just want to bring your Canon to an airport and 'get shots' of stored aircraft. Wow. Just, wow.
Signature. You just read one.
 
LupineChemist
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:55 am

LAX772LR wrote:
LupineChemist wrote:
I mean, there are solid numbers here for around what the RASK can be so all you need to know is that if you can get aircraft cheap enough to keep your CASK down to the right amount, you're good.

Unfortunately it ain't that simple; the fact that no one's done/sustained it, should be the first clue.

Also, CASK is a function of configuration more so than aircraft itself.
DY and BA both fly new 789s, but DY's CASK is going to be a hell of a lot lower than BA's, considering the 128 seat disparity.

But then again, I'd bet a paid 77W at nearly 500 seats (a la AC) would blow them both away, in terms of per seat cost.


I mean, by all indications Level is doing well, but those numbers aren't released publicly yet, so we'll see. I think if it works, it might actually have to be the airline within a group model that works in order to keep acquisition costs as low as possible (see also: Jetstar) and certainly not to the scale that Norwegian is doing things, but we'll see. I think in the end you have to treat it more like cargo to keep costs as low as possible and the biggest issue is getting aircraft as cheap as possible.
 
Amiga500
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 11:07 am

The operational concept doesn't work for long haul. Many have tried, none have succeeded.

No one, least of all FR, are going to buy into that particular koolaid any time soon.

Two fundamental reasons for this are:
- Weekend breaks for long haul are not practical time wise.
- Business travellers will get a healthier allowance for longer trips.

Therefore, ULCC has a much lower market to appeal to.
 
BOAC1966
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 11:28 am

https://www.aviationanalytics.com/2018/ ... stretched/

Article few months old but seems authentic re issues relating to the carrier. Whatever happens they have been a catalyst and there will not be a reversal in LCC presence. Sir Freddie Lakers started this ball rolling 40 years ago and the legacy carriers responded competitively helping make air travel affordable greatly assisted by dramatic shifts in avaition technology. New entrants will materialise as the barriers to entry are relatively low.
 
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Faro
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 11:31 am

From previous threads on A.net, DY's European ops seem more than sustainable...let's hope that the capital injection materialises...and the CEO is dumped...and all efforts are deployed by the Board of Directors to save and sustain and expand DY's European ops...asset sales and lease terminations and liquidation of long haul ops...

DY can survive still...with a big, healthy focus on short haul and a dramatic deflation of its long haul fantasy...


Faro
The chalice not my son
 
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Goodyear
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 11:31 am

B777LRF wrote:
9.000 people wearing a Norwegian uniform and another roughly 30.000 who depend on their company having Norwegian as a customer to maintain their jobs. All that mean nothing to you, you just want to bring your Canon to an airport and 'get shots' of stored aircraft. Wow. Just, wow.

Good grief, where to begin...
Airlines are not jobs programs. They exist solely to generate profit. If (when?) Norwegian would run a sound business that routinely and reliably generated profitability, those employees would not have much to worry about. Speaking of profitability, the aircraft storage and reclamation business is doing very well these days. This has nothing to do with my "Canon".
Last edited by Goodyear on Wed Mar 21, 2018 11:47 am, edited 1 time in total.
 
LHRFlyer
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 11:37 am

If you are losing money you don’t solve the problem by growing ASKs by 40% in one year.
 
Mortyman
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 11:56 am

Norwegian and ceo Bjørn Kjos sells the first five aircraft that HK Express in Hong Kong were supposed to have aquired, but has not given up the deal with the crisis-driven Hong Kong company.

While the Norwegian airline cites billions and announces new deficits, it has found a kind of solution to one of its biggest headaches: the agreement with the HK Express low-cost carrier in Hong Kong.

The authorities deny the small airline on the other side of the globe to take into account the aircraft that Norwegian has agreed to lease out from its Irish subsidiary Arctic Aviation Asset Ltd. HK Express is Norwegains only air lease customer, and there are new airplanes from Airbus to be leased out.

Now, Norwegian is about to sell the first five aircraft it has received, but HK Express has not been allowed to use. The aircraft are of the Airbus A320neo type.

"We have received five aircraft, which we will start to sell," says Norway's acting finance director Tore Østby at a conference call Wednesday.

According to him, the sales process is in the final phase and he expects to be able to tell more in the next few weeks.

- We have received offers from several parties and are in the final phase. We expect to complete this during the first quarter, "says Østby, who would not say if all 5 is being sold to the same buyer.

Meanwhile, delayed handover to the end customer HK Express makes the revenues for Norwegian fail.

"It is clear that delays in delivery will adversely affect us. Then your income will arrive later than planned. But fortunately, also the costs, "said Kjos to DN in February.

In total, the Norwegian subsidiary Arctic Aviation Asset Ltd in Ireland has an agreement to lease 12 A230neo aircraft to Hong Kong-based airline HK Express. Norwegian chief executive Bjørn Kjos and Østby stand by the agreement with HK Express, despite all the problems.

"The five we have on hand, we are starting to sell, but HK Express will take the next seven aircraft, which will be delivered next year," says Østby.

Norwegian expects a profit of between 15 and 20 million dollars for the five aircraft.

The five will probably not be the last aircraft Norwegian sells in the next few years. According to Kjos, there is strong interest in the market.

"It's a big, no, huge interest," says Kjos to DN, before adding:

- We have more requests we will look into.

After a sale of the five aircraft, Norwegian will have 65 Airbus A320neo aircraft and 30 A321L aircraft in order.

"We can sell a portion of the portfolio, or join a leasing company where we can rent to others in the industry. We actually have several opportunities, "said Bjørn Kjos, on DN's question at a conference call Wednesday morning.


https://www.dn.no/nyheter/2018/03/21/12 ... -interesse
 
jmmadrid
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 12:34 pm

Faro wrote:
DY can survive still...with a big, healthy focus on short haul and a dramatic deflation of its long haul fantasy...
Faro


Probably, but they need to start the adjustments ASAP.

We know about this situation at least since last September, and we haven't seen any sensible decisions/reorganisation.

Some (read "some" as a few and not as most) of their LH routes might be profitable, and could be kept, but they need to reduce the number of bases and the point to point flying between cities where they have a small presence. I say, consolidate where you are stronger (LGW, OSL maybe BCN) and forget about expansion for a while. Defer most or all new deliveries for a couple of years.
 
B777LRF
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 1:05 pm

Goodyear wrote:
B777LRF wrote:
9.000 people wearing a Norwegian uniform and another roughly 30.000 who depend on their company having Norwegian as a customer to maintain their jobs. All that mean nothing to you, you just want to bring your Canon to an airport and 'get shots' of stored aircraft. Wow. Just, wow.

Good grief, where to begin...
Airlines are not jobs programs. They exist solely to generate profit. If (when?) Norwegian would run a sound business that routinely and reliably generated profitability, those employees would not have much to worry about. Speaking of profitability, the aircraft storage and reclamation business is doing very well these days. This has nothing to do with my "Canon".


And how, pray tell, would airlines make a profit if it wasn't for the employees keeping the wheels turning? But that's actually neither here nor there; I was piqued by your obvious disdain for the employees at risk, with your only apparent concern - if that's the right word - that you'd be able to drool over the fence at some airport whilst 'taking shots' at stored aircraft. Your ghoulism has been noted, as has your lack of empathy for your fellow human beings.
Signature. You just read one.
 
MIflyer12
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 1:09 pm

jmmadrid wrote:
Faro wrote:
DY can survive still...with a big, healthy focus on short haul and a dramatic deflation of its long haul fantasy...
Faro


Probably, but they need to start the adjustments ASAP.

We know about this situation at least since last September, and we haven't seen any sensible decisions/reorganisation.

Some (read "some" as a few and not as most) of their LH routes might be profitable, and could be kept, but they need to reduce the number of bases and the point to point flying between cities where they have a small presence. I say, consolidate where you are stronger (LGW, OSL maybe BCN) and forget about expansion for a while. Defer most or all new deliveries for a couple of years.


Both owned & leased aircraft give an operating entity a reason to buy, assuming those aircraft were bought/leased at competitive prices (or there's a shortage of those types). I assume that even 'owned' aircraft were bought with substantially borrowed money - they and leased planes will go to creditors in a liquidation.
 
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Goodyear
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 1:10 pm

B777LRF wrote:
I was piqued by your obvious disdain for the employees at risk, with your only apparent concern - if that's the right word - that you'd be able to drool over the fence at some airport whilst 'taking shots' at stored aircraft. Your ghoulism has been noted, as has your lack of empathy for your fellow human beings.

For the record, I will be drooling from within the fence.
 
mcdu
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 1:22 pm

MIflyer12 wrote:
jmmadrid wrote:
Faro wrote:
DY can survive still...with a big, healthy focus on short haul and a dramatic deflation of its long haul fantasy...
Faro


Probably, but they need to start the adjustments ASAP.

We know about this situation at least since last September, and we haven't seen any sensible decisions/reorganisation.

Some (read "some" as a few and not as most) of their LH routes might be profitable, and could be kept, but they need to reduce the number of bases and the point to point flying between cities where they have a small presence. I say, consolidate where you are stronger (LGW, OSL maybe BCN) and forget about expansion for a while. Defer most or all new deliveries for a couple of years.


Both owned & leased aircraft give an operating entity a reason to buy, assuming those aircraft were bought/leased at competitive prices (or there's a shortage of those types). I assume that even 'owned' aircraft were bought with substantially borrowed money - they and leased planes will go to creditors in a liquidation.


I don't believe NOrwegian owns many if any of their fleet. "Selling" is just getting away from the leases or financing. I suspect the monetary amount stated is what they would receive in not having to make payments. However, they also lose the revenue those planes would produce thus exasperating the financial ruin the company is in currently.

Those complaining about lack of empathy for NOrwegain staff and contractors are totally unaware of the damage they intended to do and have done to the careers of those in the industry and the travel experience of the passengers. Also if you are so sympathetic, how would you feel if someone in your field of work was willing to do your job for pennies on the dollar and your company needed you to either take cuts to their levels or face your company struggling and you losing your job? Do you love your competitors employees more than you value your own livelihood ?

For those that complain about 10 abreast in the a 777 and basic economy on the legacy carriers you fail to comprehend this is all driven in the need to for the legacy carriers to compete on price with an "airline" like NOrwegian. They set out to undercut the fares and also the employee wages and benefits. The result is what you have today with the legacy carriers having to respond.

If NOrwegian was so competitive they could have put out a product and a fare on par with the rest the airlines. If people chose SWF over NYC just to ride the NOrwegian brand then they would have that choice. But people are driven by price and NOrwegian kept selling below cost. That is a formula that has never worked in any business.
 
Someone83
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 1:25 pm

mcdu wrote:
I don't believe NOrwegian owns many if any of their fleet.


They do, and this is not about believing or not.

Norwegian has a lot of issues and things to be solved, however, you're mainly coming with "alternative facts" here, like a certain Donald.....
 
[email protected]
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 1:31 pm

At the end of its FY2017, 46% of Norwegian's fleet of 144 aircraft were owned: 53 738s, 6 MAX 8s, and 7 788s/789s. By the end of FY2019, it expects that its owned aircraft will comprise 58% of its anticipated fleet of 193: 53 738s, 34 MAX 8s, 17 788s/789s, and 8 321neos.

But let's remember:

US jobs are at risk!

US safety is at risk!

US jobs are at risk!

US safety is at risk!

Or so the increasing number of highly unionised people on A.net would have us believe.

Source: slide 9 on https://www.norwegian.com/globalassets/ ... tation.pdf
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
tphuang
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 1:52 pm

[email protected] wrote:
At the end of its FY2017, 46% of Norwegian's fleet of 144 aircraft were owned: 53 738s, 6 MAX 8s, and 7 788s/789s. By the end of FY2019, it expects that its owned aircraft will comprise 58% of its anticipated fleet of 193: 53 738s, 34 MAX 8s, 17 788s/789s, and 8 321neos.

But let's remember:

US jobs are at risk!

US safety is at risk!

US jobs are at risk!

US safety is at risk!

Or so the increasing number of highly unionised people on A.net would have us believe.

Source: slide 9 on https://www.norwegian.com/globalassets/ ... tation.pdf

I will take the under on 58% owned by the end of 2019.

And for the earlier poster regarding job losses. Most of the staff will work for someone else if dy goes under or if they sell their international arm. Numerous airlines have gone under and those people will get hired somewhere else or by whoever bought that asset. That’s how free market works. The person that will loose his job is their ceo who has run the company to the brinks with his gigantic ego.
 
leghorn
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 2:20 pm

Norwegian can't afford flight cancellations at this stage. A concerted targeted effort to recruit their pilots by competitors could bring the whole show crashing down.
Even Ryanair could do this as they have improved their employment package considerably in the last few months by Ryanair have least to gain as Norwegian aren't competing with then on routes. Airlines like Aer Lingus, The Spanish brands flying TATL, US and Middle East airlines would derive most benefit.
 
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JetBuddy
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 2:30 pm

And on top of this, oil prices are going up and up. At the end of January, JPMorgan put the average price per barrel at 70USD for 2018. Goldman Sachs is predicting 82,50USD for Brent per barrel in 6 months. That's close to the 2011 record high.

I've not been one of those predicting Norwegian to go under, but it's not looking good for them. They will now have to sell airplanes to stay afloat.

Article from Dagens Næringsliv, Norways primary financial paper:

"Norwegian is a bottomless drain".
"This is really bad, Norwegian will survive this summer, but that's about it"

https://www.dn.no/nyheter/2018/03/20/19 ... nlost-sluk
 
[email protected]
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 3:01 pm

PA515 wrote:
[email protected] wrote:
At the end of its FY2017, 46% of Norwegian's fleet of 144 aircraft were owned: 53 738s, 6 MAX 8s, and 7 788s/789s. By the end of FY2019, it expects that its owned aircraft will comprise 58% of its anticipated fleet of 193: 53 738s, 34 MAX 8s, 17 788s/789s, and 8 321neos.

'Owned' does not mean they are paid for. They will be financed over about 12 years. If the DY can't pay those financial institutions the aircraft will be seized.

PA515


Obviously. I would have that would go without saying. Equally, it's absurd to say they would already outright own their aircraft.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
PA515
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 3:01 pm

[email protected] wrote:
At the end of its FY2017, 46% of Norwegian's fleet of 144 aircraft were owned: 53 738s, 6 MAX 8s, and 7 788s/789s. By the end of FY2019, it expects that its owned aircraft will comprise 58% of its anticipated fleet of 193: 53 738s, 34 MAX 8s, 17 788s/789s, and 8 321neos.

'Owned' does not mean they are paid for. They will be financed over about 12 years. If the DY can't pay those financial institutions the aircraft will be seized.

PA515
 
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LAX772LR
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 3:15 pm

LupineChemist wrote:
I mean, by all indications Level is doing well.

Something that's been around for less than the duration of a fart after chili?

...and WHAT indications?
I myself, suspect a more prosaic motive... ~Thranduil
 
mcdu
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 3:39 pm

[email protected] wrote:
PA515 wrote:
[email protected] wrote:
At the end of its FY2017, 46% of Norwegian's fleet of 144 aircraft were owned: 53 738s, 6 MAX 8s, and 7 788s/789s. By the end of FY2019, it expects that its owned aircraft will comprise 58% of its anticipated fleet of 193: 53 738s, 34 MAX 8s, 17 788s/789s, and 8 321neos.

'Owned' does not mean they are paid for. They will be financed over about 12 years. If the DY can't pay those financial institutions the aircraft will be seized.

PA515


Obviously. I would have that would go without saying. Equally, it's absurd to say they would already outright own their aircraft.



Anything that is “owned” by NOrwegian is held as collateral in some type of debt.

Last year I remember a US3 CEO saying the greatest threat was the ME3 vs the ULCC transatlantic Operations. Those were financially unsustainable and NOrwegian is proving that theory.

I see a stigma placed on the pilots from NOrwegian as it applies to those eligible to work in the USA. As long as there are other pilots to hire I see the hiring committees passing on those that have touched the NOrwegian brand.
 
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Dahlgardo
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 3:42 pm

This is really a critical time for Norwegian.
It does not appear the travelling public have lost confidence in Norwegian yet, but as soon as people stop book way in advance because of uncertainty of the companys survival, cashflow dies, and the relentless death spiral starts. The media focus is very negative now, and when the first aircraft is impounded, it's game over.

Big winner will be Ryanair if Norwegian folds.
There will be plenty of aircrews for hire and plenty of underserved LCC destinations if it happens.
leave your nines at home and bring your skills to the battle
 
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CPHFF
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 4:59 pm

Dahlgardo wrote:
This is really a critical time for Norwegian.
It does not appear the travelling public have lost confidence in Norwegian yet, but as soon as people stop book way in advance because of uncertainty of the companys survival, cashflow dies, and the relentless death spiral starts. The media focus is very negative now, and when the first aircraft is impounded, it's game over.

Big winner will be Ryanair if Norwegian folds.
There will be plenty of aircrews for hire and plenty of underserved LCC destinations if it happens.



The big winner will be SK! They have seen just about every route from OSL, CPH and ARN challenged by really aggressive pricing from Norwegian.
If it weren't for UAW, Detroit would shine!
 
Bongodog1964
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 5:01 pm

The operation does show signs of being huge money churning exercise, relentless expansion driving future ticket sales, driving more expansion driving more ticket sales. The unfortunate aspect however appears to be that the money lost on each ticket either remains the same or even increases. If I were booking with them I would only be using a credit card thus guaranteeing my money. The immediate problem will come if the credit card companies refuse to handle DY payments due to the risk involved.
 
[email protected]
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 5:28 pm

mcdu wrote:
[

Anything that is “owned” by NOrwegian is held as collateral in some type of debt.
.



You don't say! That is very obvious and the case for most airlines.

You're amusing. On the one hand you moan they lease 'everything', which clearly they don't. By a long stretch. On the other hand, you moan they debt-finance their fleet - like most do. So they can't win.

Then again, a pro-union 'protect US jobs!' person is inevitably going to try to muddy the waters.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
MIflyer12
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 5:38 pm

Bongodog1964 wrote:
The operation does show signs of being huge money churning exercise, relentless expansion driving future ticket sales, driving more expansion driving more ticket sales. The unfortunate aspect however appears to be that the money lost on each ticket either remains the same or even increases.


That's one way to look at it. (I don't disagree.)

Airlines get big economies of scale. It's not just network connection effects (although that's a really big part), but in purchasing and marketing, too. It's really tough to have a successful small airline in deregulated markets, be it Europe or the U.S.A. IMHO they might succeed as a European short-haul airline. On a TATL basis, competing against IAG and Delta (in the JV with AF/KL/AZ) and others it was always a very slim chance.
 
skipness1E
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 5:46 pm

They’re going to have a bigger long haul fleet than BA at Gatwick this summer, all B787-9s under two years old. Bubble, right there. Unsustainable to go for broke so quickly.
 
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Jayafe
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 7:13 pm

JetBuddy wrote:
And on top of this, oil prices are going up and up. At the end of January, JPMorgan put the average price per barrel at 70USD for 2018. Goldman Sachs is predicting 82,50USD for Brent per barrel in 6 months. That's close to the 2011 record high.


Having such a young fleet, those prices might actually help. Competition might need to raise tariffs to fly not so efficient planes, which will add LF and some yield to DY.
 
kaitakfan
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 7:14 pm

B777LRF wrote:
Goodyear wrote:
B777LRF wrote:
9.000 people wearing a Norwegian uniform and another roughly 30.000 who depend on their company having Norwegian as a customer to maintain their jobs. All that mean nothing to you, you just want to bring your Canon to an airport and 'get shots' of stored aircraft. Wow. Just, wow.


And how, pray tell, would airlines make a profit if it wasn't for the employees keeping the wheels turning? But that's actually neither here nor there; I was piqued by your obvious disdain for the employees at risk, with your only apparent concern - if that's the right word - that you'd be able to drool over the fence at some airport whilst 'taking shots' at stored aircraft. Your ghoulism has been noted, as has your lack of empathy for your fellow human beings.


I’m not sure what line of work you are in, perhaps you are in the aviation industry and this is you’re reasonable perspective on the negativity Norwegian attracts from the global airline community. As someone that works for a company under direct fire from the undercutting nature of Norwegian I have very little sympathy for the employees there. I don’t wish ill will upon them and their families though.

I understand they all have their reasons why they are flying 787’s in the left seat making less than I am as a narrow body first officer and that European airlines are not the same dynamic as US airlines.

If they are in that bad of a situation to work for such substandard wages that could directly impact my families financial well being, well I know where my concerns are. I would hope you would also
have similar sentiments to those in your industry doing the same job for far less compensation.

I’ve heard a million sob stories from scabs from the 80’s and why they needed to steal from their fellow coworkers and this all seems very similar to what I hear from the pilots of Norwegian. While no picket line is being crossed, I don’t appreciate seeing this profession treated like a toilet for pissing all over. I personally would love to see the employees build on their contracts and raise the bar vs hitting the unemployment line. Again, no ill will towards them, but from one US3 pilot, I have little respect or sympathy at this stage in the game.
 
mcdu
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 7:30 pm

[email protected] wrote:
mcdu wrote:
[

Anything that is “owned” by NOrwegian is held as collateral in some type of debt.
.



You don't say! That is very obvious and the case for most airlines.

You're amusing. On the one hand you moan they lease 'everything', which clearly they don't. By a long stretch. On the other hand, you moan they debt-finance their fleet - like most do. So they can't win.

Then again, a pro-union 'protect US jobs!' person is inevitably going to try to muddy the waters.


Hardly. Real airlines have tangible assets. No carrier that is surviving has 100% of their assets encumbered. It appears the NOrwegian has nothing left to borrow against.

They are not turning a profit in the most profitable period of airline history. They are a losing bet. Anyone lending them money will want a high rate of interest as the lending is just too risky.
 
Planesmart
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 8:15 pm

mcdu wrote:
Hardly. Real airlines have tangible assets. No carrier that is surviving has 100% of their assets encumbered. It appears the NOrwegian has nothing left to borrow against.

They are not turning a profit in the most profitable period of airline history. They are a losing bet. Anyone lending them money will want a high rate of interest as the lending is just too risky.

Most airlines have 100% of their assets encumbered - it's called a floating charge. The question is on average, what percentage of the floating charge is being advanced against. And of course, the floating charge is based on 'going concern' valuations.

Because the commercial airline industry is highly profitable, is the very reason competitors are attracted. For example, the US3 would have to try very hard not to be as profitable as currently.

Industry profitability is only one factor. Another, is where the airline is in terms of life cycle. Yes, there is a high mortality rate. DY has friends (white knights), including Boeing, and even a few airlines. And has created a brand with value.

Just as every aircraft or route is not a sales or financial success, not every airline is a success or even survives. Look at the US3's track record / history. But the World is a better place for those who try, who back themselves, who put everything on the line, who think big.
 
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SuperTwin
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 8:18 pm

The red flag for me was when the CFO quit in the midst of their massive long-haul expansion that people were hailing as revolutionary and game changing. As each day passes, it’s becoming clearer that it was not genius, but financial suicide. And this during prosperous economic times abound in most of the world!

Fools.
SuperTwin
 
sevenair
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 8:31 pm

I remember the time when numerous airlines from the USA were randomly positioned to UK bucket and spade locations. It had nothing to do with Monarch's demise we were told continually. The 747s were flown accords the Atlantic just to stretch their legs. Talk of the demise of Monarch was nasty speculation. Money was found and Monarch limped on for a year.

The time to be concerned is when we see the UK CAA position repatriation flights for our citizens (I don't see why we should pay for anyone's else's but that's just me) to Norwegian destinations. Alas I can't see any evidence of this happening any time soon.

I'm sure if IAG were worried they wouldn't have bothered with LEVEL and I'm sure the new a.net hero MOL wouldn't have to offer proper contracts and subsidise type ratings as he'd just wait for the implosion and pick up the pieces.

Norwegian is here to stay. Personally I think the 787s should be switched to do a beach flight (ski flights in winter) in the morning from LGW followed by high demand USA rotations on an afternoon, getting the utilisation right up. The cabin is too sparse too and could be further densified. Getting the CASM down and RASM up is key. I'm sure they know what they're doing.
 
Flighty
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 8:48 pm

JBLUA320 wrote:
Can someone translate this for the financially inept?


Sure. Imagine if someone exactly like you wanted to start an airline, based on hopes and dreams. That's Norwegian :)
 
skipness1E
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 8:52 pm

sevenair wrote:
I remember the time when numerous airlines from the USA were randomly positioned to UK bucket and spade locations. It had nothing to do with Monarch's demise we were told continually. The 747s were flown accords the Atlantic just to stretch their legs. Talk of the demise of Monarch was nasty speculation. Money was found and Monarch limped on for a year.

The time to be concerned is when we see the UK CAA position repatriation flights for our citizens (I don't see why we should pay for anyone's else's but that's just me) to Norwegian destinations. Alas I can't see any evidence of this happening any time soon.

I'm sure if IAG were worried they wouldn't have bothered with LEVEL and I'm sure the new a.net hero MOL wouldn't have to offer proper contracts and subsidise type ratings as he'd just wait for the implosion and pick up the pieces.

Norwegian is here to stay. Personally I think the 787s should be switched to do a beach flight (ski flights in winter) in the morning from LGW followed by high demand USA rotations on an afternoon, getting the utilisation right up. The cabin is too sparse too and could be further densified. Getting the CASM down and RASM up is key. I'm sure they know what they're doing.


Is this sarcasm? I genuinely can't tell and that's rare.....
 
David_itl
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 9:04 pm

sevenair wrote:
I remember the time when numerous airlines from the USA were randomly positioned to UK bucket and spade locations. It had nothing to do with Monarch's demise we were told continually. The 747s were flown accords the Atlantic just to stretch their legs. Talk of the demise of Monarch was nasty speculation. Money was found and Monarch limped on for a year.

The time to be concerned is when we see the UK CAA position repatriation flights for our citizens (I don't see why we should pay for anyone's else's but that's just me) to Norwegian destinations. Alas I can't see any evidence of this happening any time soon.


Weren't the Monarch repatriation flights only for those passengers with ATOL protection and therefore the CAA could use the levies raised in flying them home with passengers not covered making their own way back? How many of Norwegian's passengers would be covered through the ATOL scheme?
 
B777LRF
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:17 pm

kaitakfan wrote:
I’m not sure what line of work you are in, perhaps you are in the aviation industry and this is you’re reasonable perspective on the negativity Norwegian attracts from the global airline community. As someone that works for a company under direct fire from the undercutting nature of Norwegian I have very little sympathy for the employees there. I don’t wish ill will upon them and their families though.

I understand they all have their reasons why they are flying 787’s in the left seat making less than I am as a narrow body first officer and that European airlines are not the same dynamic as US airlines.

If they are in that bad of a situation to work for such substandard wages that could directly impact my families financial well being, well I know where my concerns are. I would hope you would also
have similar sentiments to those in your industry doing the same job for far less compensation.

I’ve heard a million sob stories from scabs from the 80’s and why they needed to steal from their fellow coworkers and this all seems very similar to what I hear from the pilots of Norwegian. While no picket line is being crossed, I don’t appreciate seeing this profession treated like a toilet for pissing all over. I personally would love to see the employees build on their contracts and raise the bar vs hitting the unemployment line. Again, no ill will towards them, but from one US3 pilot, I have little respect or sympathy at this stage in the game.


I appreciate your input and understand your point of view. Your observation is quite right, I'm in aviation and have been so - more or less - since I was 15. I've washed dishes at an airline catering facility and flown RHS in a 757, and a lot of things in between and since.

However, tarring all of Norwegian with the same brush would be foolish and ill-informed. It is true that Norwegian's 787 pilots are amongst the lowest paid long-haul wide body pilots in the industry. It is also true that a large number of their pilots are working under contract from a staffing agency, a deplorable practice designed to distance a company from its employees. Which might be cost effective but is a sure way to alienate your staff. It's one way to run a railroad, but it wouldn't be the way I'd chose to do it. Whilst the same situation doesn't exist in the US, they have another way of lowering the cost: Contract out the flying to lower paying subsidiaries and 3rd party contractors. Sure, this also happens in Europe and elsewhere, but nowhere near at the same scale. So whilst you argue that a 'lowly' paid Norwegian wide body crew is 'getting pissed all over', is the situation really any different for US regional pilots?

Getting back to my opening statement, a very large part of Norwegian crew members who are under direct contract with the airline, are working under a CLA. Not one quite as gold-plated as a US3 mainline pilot, but it's a union negotiated CLA none the less. Perhaps that snippet of information might cause you to reevaluate your position.
Last edited by B777LRF on Wed Mar 21, 2018 10:21 pm, edited 1 time in total.
Signature. You just read one.
 
EvanWSFO
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:34 pm

sevenair wrote:
Absolutely disgusting to see the pleasure a.net would have at seeing people out of a job with no wages to feed their children, the stress of finding a new job and worrying about paying their mortgage especially when most of you probably don't even work for an airline let alone work for one who has been impacted by Norwegian's service. But this is the same a.net where Branson and MOL are now heroes due to their anti democratic views so it's to be expected!

Still, you can't put a price on a pretty picture of planes lined up with no work whilst each grounded craft represents dozens of shattered dreams, strained personal lives and financial ruin.

Bravo guys. Bravo.


I would never wish anyone to lose their jobs. I've flown Norwegians TATL and within Europe. My experiences were terrible. Bad attitudes of the front line employees usually indicates the treatment they are getting by management. Regardless of how cheap, I and my traveling companions at the time all agree - we'll never get on a Norwegian aircraft.
I have been on this site 15 years. A unrecoverable email account led me to starting over. Those of you who call me a rookie, you may stop ok?
 
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Richard28
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:37 pm

David_itl wrote:
How many of Norwegian's passengers would be covered through the ATOL scheme?


There will be some.

I for one have a Thomson/TUI holiday to Greece lined up in August, where the airline on one leg is Norwegian (and TUI on the way back) which is ATOL protected.

My sense is that on the long haul routes ATOL passengers may be much less, but I could be wrong.
 
lee757
Posts: 58
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Re: Norwegian profit warning, try to raise equity

Wed Mar 21, 2018 10:51 pm

David_itl wrote:

Weren't the Monarch repatriation flights only for those passengers with ATOL protection and therefore the CAA could use the levies raised in flying them home with passengers not covered making their own way back? How many of Norwegian's passengers would be covered through the ATOL scheme?


No the CAA brought everyone home
http://www.travelweekly.co.uk/articles/ ... ry-of-atol
https://www.caa.co.uk/News/CAA-launches ... customers/

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