skipness1E
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 4:32 pm

PatrickZ80 wrote:
skipness1E wrote:
If you have ambitions to be a major player you need to be on core routes with high volume and yield


Wrong! High volume and yield don't go hand in hand, certainly not in markets with heavy competition like London. Norwegian may have high load factors out of London, but their yields are trash. The competition is crushing them.

Norwegian is a LCC, although they sometimes seem to forget that. Management for a LCC is very different from management for a legacy airline. The thing that attracts passengers to Norwegian is not convenience or service, it's the lowest ticket price. Therefor they should constantly ask themselves, where (and how) can that lowest ticket price be offered. Obviously it can't be offered in high-cost markets, those high costs are the reason they have to ask higher fares than they should. In low-cost markets, they can charge lower fares and still make a higher profit due to the absence of high costs.

If the fares are low enough, the passengers will come naturally. Of course they'll not all be locals, therefor a good feeder network is important. Not every route needs to be served non-stop, sometimes serving it one-stop makes more sense. That way you get one full plane instead of two half-full planes which reduces costs.

God this is painful. Again.

Patrickz80 it’s great to be an amateur enthusiast but at least school yourself in the basics before your next long post on the LCC market.
Europe to north america is intensely seasonal, the only way to try and pay off the costs of the new Dreamliners is to fill as many seats at a decent price as possible whilst keeping costs down. If the competition engages in your price war, you won’t make enough in high yield summer to get you through the depths of winter. This is where DY are now at, what many years ago killed Laker Airways in Feb 1982. In your model, the niche lesser served markets which you cannot name, cos they are usually unserved for very good reasons, won’t support 787s outwith summer peak even in good years. So you are advocating an unfocussed strategy of somehow feeding hubs with connections, at the lowest cost possible, remebering that hubbing is actually a substantial additional cost to a low-cost model. In your niche-hub, you have no 787s now, but 737/A321 models flying at the lowest possible cost, using a hubbing higher cost business model in unproven, low volume niche ling haul markets which won’t support a wide body and die a death fron Nov-Mar.
DY tried to balance out this by opening LGW-SIN, which has tanked very badly. EZE and South America remain underserved from London but the focus remains on N America cos they can at least fill an aeroplane, albeit at a loss.

As for yields being trash, well LCCs can make good yields. Try booking FR or EZY as departure date approaches. Ryanair are consistently VERY profitable. They also don’t hub, nor do EZY.

So my question to you is, given you cannot fill the 787s in your niche LCC business model, what do you do with 13+ LGW based wide bodies in 2019 to save the business?
You cannot double drop via the UK without rescreening the whole aeroplane btw, and any aircraft landing in the US needs everyone cleared at the first port of entry. Double drops are expensive and time consuming nowadays.
 
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SASViking
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 4:43 pm

davidjohnson6 wrote:
Typically when a major subsidiary or parent of a group of airline companies collapses, there is an attempt to ensure the remaining companies in the group survive

While this may occur in the strict legal sense, the reputational damage is usually too large to ensure ticket sales (and revenues) are unaffected and it often becomes a matter of time before other negative factors start to appear.

That said, Norwegian is a significant player in a country (perhaps Sweden as well as just Norway) which by virtue of a modest population spread over a large area whose geography (ie mountainous terrain and bad weather in winter) makes air transport a social and commercial necessity. Sure Wideroe performs the greatest and most immediate social function but the demise of Norwegian would likely be a non trivial event for Norway. To the people who praise only the free market who are reading this, please remember that Scandinavians may take a different view of the world. Ensuring SAS avoid the bad old days of being a monopolist with high fares may be sufficient reason for the Norwegian or Swedish Govts to take action to avoid uncontrolled implosion


Norwegians fares on domestic flights in Norway are generally high, often priced on the same level as SAS' and if they're cheaper it's only by ~$15-$30. None of the Scandinavian governments would care enough to safe Norwegian. If/when Norwegian go bankrupt there'll be plenty of other airlines ready to take over. SAS and Widerøe on domestic flights in Norway, SAS, Braathens Regional and SJ's high speed rail in Sweden and SAS and perhaps DAT in Denmark. On the international routes airlines such as Wizzair, Ryanair, EasyJet and Vueling would take over some og the nonstop intra-european flights (mainly the "sun" routes to the south but also some to the big European cities) and KLM/Air France, Lufthansa, BA and SAS would offer connections. LEVEL would likely pick up the longhaul routes from LGW, ORY/CDG, BCN etc. SAS would take some from CPH, OSL, ARN with the A350s arriving soon aswell as plenty of connections via AMS, LHR, FRA etc

Also us Scandinavians do not take a "different view of the world"...
Types flown: A319, A320, A32N, A321, A332, A333, A343, AT43, AT75, AT76, B717, B732, B735, B736, B737, B738, B752, B753, CRJ9, DC10, DH4D, DHC3, E135, E145, E175, E190, E195, F100, MD11, MD81, MD82, MD87, RJ1H
 
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PatrickZ80
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 4:49 pm

skipness1E wrote:
So my question to you is, given you cannot fill the 787s in your niche LCC business model, what do you do with 13+ LGW based wide bodies in 2019 to save the business?


As I said before, 13+ wide bodies at Gatwick is way too much. I would move them over to other bases. Oslo, Copenhagen, etc. From there new destinations can be opened up, perhaps destinations that were previously served from Gatwick. Of course the market between Copenhagen and Seattle is smaller than the market between London and Seattle, but so is the competition which in London is fierce and in Copenhagen non-existing. In London they can get perhaps 20% of the market if they're lucky, in Copenhagen they can get 100% of the market. What's more, 20% of a big market or 100% of a small market? And that small market in Copenhagen can be enlarged with their extensive feeder network they have there.
 
lhrsfosyd
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 5:12 pm

You cannot simply put all LCCs in one basket and say 'make it work, after all FR and U2 are very profitable'. Norwegian is a hybrid airline offering free wifi, connections, premium class as well as short and long haul network. DY's costs are further increased to cover crew accommodation expenses.

DY's current strategy has no future. It isn't significantly cheaper than competitors and it doesn't have an extensive network. I can only see DY becoming a seriously profitable business by cracking undeserved, not high volume routes. Cracking undeserved intercontinental routes is difficult due to overflight and air service agreements complexities.

Neither FR nor U2 face the challenges and expenses mentioned above.
 
skipness1E
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 5:22 pm

PatrickZ80 wrote:
skipness1E wrote:
So my question to you is, given you cannot fill the 787s in your niche LCC business model, what do you do with 13+ LGW based wide bodies in 2019 to save the business?


As I said before, 13+ wide bodies at Gatwick is way too much. I would move them over to other bases. Oslo, Copenhagen, etc. From there new destinations can be opened up, perhaps destinations that were previously served from Gatwick. Of course the market between Copenhagen and Seattle is smaller than the market between London and Seattle, but so is the competition which in London is fierce and in Copenhagen non-existing. In London they can get perhaps 20% of the market if they're lucky, in Copenhagen they can get 100% of the market. What's more, 20% of a big market or 100% of a small market? And that small market in Copenhagen can be enlarged with their extensive feeder network they have there.

No mate, you NEVER get 100% of a market. If you open up ARN-xyz at the cheapest price point you can, SAS will still offer ARN-EWR-xyz and hang onto much of the high yield traffic, leaving you with bucket shop fare levels to serve xyz at twice a week whereas SAS/United have a daily offering via EWR every day year round. Hence competitive advantage is with SAS. Your focus on only the cheapest fares possible does not work in that market. If you want to learn more, look at what BA did to Pan Am. Only 243 seats were filled on the Lockerbie B747 at peak Christmas travel, PA were reduced to chasing volume at low price, something fhey couldn’t make money on. BA matched the lowest price but maintained better product and frequency and poached the big spenders.

You ask is it better to have 20% of a big market or 100% of a smaller one. As I indicated above, you start from a false assumption. You can say “ok 100% of the non stop market” but the way niche markets are served is over hubs, pooling traffic to make frequency viable. There are options there for sure, but not with the year round volume of traffic that London has, not even close. You need to lose a lot of 787s and downsize to make that work.
 
BestWestern
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 5:41 pm

Breaking into the UK market is very difficult. Easy and Ryanair have such dominance of the Leisure market and have London fortress airports. Norwegian yield on same airport pairs vs EasyJet is starkly lower. With this problem, they don’t have the benefit of a strong home yield to make lower yield hub traffic work in the way other carriers can. A dozen 787s at Gatwick is a huge investment and rapid growth. Did VS ever make it to that size in Gatwick?

Norwegian should hub and grow ex Scandinavia where their brand is well known and their yields are profitable, rather than compete against IAG in London. Either that, they should select an underserved major airport such as Manchester or Cologne that they can make their fortress.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
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Mortyman
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 5:53 pm

AAR wrote:
The interest goes up - Hard Brexit ahead - not sold the 140 frames yet... Norwegian sees a hard time ahead... The Airbus order ?


i don't really think that a hard Brexit will be a problem. Norwegian has operation in both Scandinavia, the UK and the EU. The company has air licenses in all three, and thus does not need to apply for any new license.

Norwegian has also secured US permits for both its Norwegian, Irish and British companies, which would initially ensure that the company could continue to fly after brexit.

Because of a possible hard Brexit I believe they are also working on pilot and crew licenses both for UK and EU for all pilots and cew.


But no one really knows what will happen, but I don't think that Norwegian is the only one who will possibly have problems.
 
mcdu
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 6:12 pm

If this is the end there will be few in the industry to shed tears for their disappearance.

All they do is come into markets, operate at a loss. The established carriers have to compete with them and it puts downward pressure on all employees. In the end they cost the established carriers and employees millions and they vanish in the night after they collapse.
 
smartplane
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 6:13 pm

skipness1E wrote:
PatrickZ80 wrote:
Wrong! High volume and yield don't go hand in hand, certainly not in markets with heavy competition like London. Norwegian may have high load factors out of London, but their yields are trash. The competition is crushing them.

Norwegian is a LCC, although they sometimes seem to forget that. Management for a LCC is very different from management for a legacy airline. The thing that attracts passengers to Norwegian is not convenience or service, it's the lowest ticket price. Therefor they should constantly ask themselves, where (and how) can that lowest ticket price be offered. Obviously it can't be offered in high-cost markets, those high costs are the reason they have to ask higher fares than they should. In low-cost markets, they can charge lower fares and still make a higher profit due to the absence of high costs.

If the fares are low enough, the passengers will come naturally. Of course they'll not all be locals, therefor a good feeder network is important. Not every route needs to be served non-stop, sometimes serving it one-stop makes more sense. That way you get one full plane instead of two half-full planes which reduces costs.

God this is painful. Again.

Patrickz80 it’s great to be an amateur enthusiast but at least school yourself in the basics before your next long post on the LCC market.
Europe to north america is intensely seasonal, the only way to try and pay off the costs of the new Dreamliners is to fill as many seats at a decent price as possible whilst keeping costs down. If the competition engages in your price war, you won’t make enough in high yield summer to get you through the depths of winter. This is where DY are now at, what many years ago killed Laker Airways in Feb 1982.

Wasn't a key factor in the demise of Laker Airways was manipulation of airline owned electronic booking systems, which resulted in load factors at peak periods being artificially reduced by bogus bookings, as well as market price manipulation? Well after the event, multiple airlines made court sanctioned and / or out of court settlements, and also had to divest ownership of bookings systems.

The final blow was lobbying by competitors to stop a financial rescue going ahead. Air frame and engine rescue and/or support packages are more common today. Ironically, some of those who were so anti, have been on the receiving end themselves, though not all successfully.

Are you saying history is being repeated?
 
YIMBY
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 6:44 pm

Mortyman wrote:
AAR wrote:
The interest goes up - Hard Brexit ahead - not sold the 140 frames yet... Norwegian sees a hard time ahead... The Airbus order ?


i don't really think that a hard Brexit will be a problem. Norwegian has operation in both Scandinavia, the UK and the EU. The company has air licenses in all three, and thus does not need to apply for any new license.

Norwegian has also secured US permits for both its Norwegian, Irish and British companies, which would initially ensure that the company could continue to fly after brexit.

Because of a possible hard Brexit I believe they are also working on pilot and crew licenses both for UK and EU for all pilots and cew.


But no one really knows what will happen, but I don't think that Norwegian is the only one who will possibly have problems.


Sure, Hard Brexit will be a Big Problem for every carrier flying to, from or in the UK. While the new Open Skies agreements with the US and some other countries do not restrict ownership, have such agreements made for all relevant countries? There is no UK-EU agreement on aviation for hard brexit, only released plans that EU may unilaterally allow EU-UK flights for a limited time, i.e. until end of the year. There is no guarantee that flights will continue as usual and people can pass the border without visas. Have the issues with national air safety organizations and all incompatibilities with certifications been solved? Even in case of free travel, what happens with the passenger numbers if the economy of UK slows and the sterling weakens? Who wins, who loses?

Norwegian may not be hit the hardest from Hard Brexit, but it may be the last hole to sink it. Otherwise it still have odds to survive.

I hope very much there will be no Hard Brexit nor Collapse of Norwegian, but both are too probable to be ignored.
 
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Mortyman
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 7:01 pm

mcdu wrote:
If this is the end there will be few in the industry to shed tears for their disappearance.

All they do is come into markets, operate at a loss. The established carriers have to compete with them and it puts downward pressure on all employees. In the end they cost the established carriers and employees millions and they vanish in the night after they collapse.


Come on now mcdu … where is your Christmas spirit ? :biggrin:
 
skipness1E
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 7:34 pm

BestWestern wrote:
Norwegian should hub and grow ex Scandinavia where their brand is well known and their yields are profitable, rather than compete against IAG in London. Either that, they should select an underserved major airport such as Manchester or Cologne that they can make their fortress.

I disagree that MAN is underserved, especially for the US. They'd be up against AA, UA as well as based Thomas Cook and a local Virgin base.
Thomas Cook and Virgin already have a huge presence here, regional though it is, it's home loyalty for the local airline(s).
Also worth noting Singapore operate to IAH from MAN.
 
Cunard
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:02 pm

skipness1E wrote:
BestWestern wrote:
Norwegian should hub and grow ex Scandinavia where their brand is well known and their yields are profitable, rather than compete against IAG in London. Either that, they should select an underserved major airport such as Manchester or Cologne that they can make their fortress.

I disagree that MAN is underserved, especially for the US. They'd be up against AA, UA as well as based Thomas Cook and a local Virgin base.
Thomas Cook and Virgin already have a huge presence here, regional though it is, it's home loyalty for the local airline(s).
Also worth noting Singapore operate to IAH from MAN.



Exactly you tell em Skip and btw enjoy the holidays :-)

Manchester has a fairly substantial network to the USA and it's definitely not an underserved market such as Cologne no comparison whatsoever.

AMERICAN AIRLINES

MAN-PHL

SINGAPORE AIRLINES

MAN-IAH

THOMAS COOK AIRLINES

MAN-BOS
MAN-LAS
MAN-LAX
MAN-MCO
MAN-SEA
MAN-SFO

UNITED AIRLINES

MAN-EWR

VIRGIN ATLANTIC/DELTA

MAN-ATL
MAN-BOS
MAN-JFK
MAN-LAS
MAN-LAX
MAN-MCO

Ten destinations to the USA from Manchester Airport from five different airlines although that figure is less than it previously was as in the past the airport also used to have service to,

CLT
DFW
ORD
Last edited by Cunard on Sun Dec 23, 2018 8:11 pm, edited 1 time in total.
94 Countries, 327 Destinations Worldwide, 32 Airlines, 29 Aircraft Types, 182 Airports, 335 Flights.
 
ZuluTime
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:05 pm

I think you need to do some more reading up on Laker. GDS manipulation was nothing to do with it.

Basically it had a massive order book that it could not finance and the US dollar exchange rate went the wrong way against them. The other airlines were dumping capacity but also objected to GE and McDD about a proposed deal to help Laker with its finances.
Last edited by ZuluTime on Sun Dec 23, 2018 8:08 pm, edited 1 time in total.
 
ryanov
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:07 pm

It would seem to me that Christmas Spirit would involve being good to employees, not hurting them. Maybe I haven't seen A Christmas Carol recently enough.
 
Cunard
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:28 pm

ZuluTime wrote:
I think you need to do some more reading up on Laker. GDS manipulation was nothing to do with it.

Basically it had a massive order book that it could not finance and the US dollar exchange rate went the wrong way against them. The other airlines were dumping capacity but also objected to GE and McDD about a proposed deal to help Laker with its finances.


YOUR ABSOLUTELY SPOT ON WITH YOUR ANALYSIS REGARDING THE COLLAPSE OF LAKER AIRWAYS IN FEBRUARY 1982.

I typed it in capital letters for a reason to reinforce the point.

I'm glad that you replied as it saved me doing so and your facts are entirely correct regarding the collapse of LAKER and it absolutely nothing to do with the manipulation of the airlines GDS.

I remember that whole saga as if it was yesterday with Sir Freddie Laker stood on the steps outside of the Lonrho Groups Head Office in London with Lord Lonrho himself alongside him who was intending to be Lakers saviour which ultimately failed eventually bringing down the airline on Friday 05 February 1982.
94 Countries, 327 Destinations Worldwide, 32 Airlines, 29 Aircraft Types, 182 Airports, 335 Flights.
 
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PatrickZ80
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:36 pm

Cunard wrote:
Manchester has a fairly substantial network to the USA and it's definitely not an underserved market such as Cologne no comparison whatsoever.


But Cologne-Bonn is the main long haul hub for EuroWings, which is a competitor to Norwegian. Just like Norwegian, EuroWings also offers low-cost long haul in a pretty similar product. It might also not be a good idea to go up against them, specially since EuroWings is backed by the Lufthansa group. Norwegian is guaranteed to lose on that one. Of course Manchester and Cologne-Bonn were just examples, but they weren't the best examples.

What if Norwegian were to make a deal with Wizzair? The largest Wizzair base is Budapest, from there they cover just about all of Europe. What if Norwegian would base a couple of 787s in Budapest and get Wizzair to feed them? Local Budapest passengers might be low-yielding, but all the passengers that Wizzair can haul to Budapest from the rest of Europe would be a lot higher yielding. Both Wizzair and Norwegian would profit from this.
 
JBLUA320
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:42 pm

LGW isn't the problem for Norwegian - the loads are high and the Premium cabin is full, with good yield-generating fares. Of course, the competition is stiff, but Norwegian can hold its own. There are only 2 787-9s left in LGW with the 35/309 configuration. The rest are 56/282 and are quite full up front. The MAX flights are also above breakeven.

The Nordic long haul network for Norwegian is the biggest problem. It's highly seasonal and commands less of a premium fare in the slow periods. The same problem exists with markets like BCN and CDG - they are highly seasonal. The former CCO has stated multiple times that the Nordic LH market makes only 1/3rd of the revenue that the other long haul markets made. Step one is to condense as much of the Nordic LH operation into 1 airport, not CPH, OSL and ARN.

Norwegian's long haul operation can work, but they need to find a way to offset the seasonality of their markets and improve off-period yields. They are starting to do it, the question is just whether or not they have the money to hold on until they get it together.
 
787Driver
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:44 pm

If Norwegian is to be sold, I just pray that it won’t be bought by IAG or another British company. The Scandinavian attitude and atmosphere in Norwegian makes it a much better airline both for the employees and the customers.

I know that in companies such as easyJet, employees get promoted quicker for reporting other colleagues. This way of rewarding people for backstabbing fellow colleagues is downright gross and doesn’t improve safety
Last edited by 787Driver on Sun Dec 23, 2018 9:00 pm, edited 1 time in total.
 
jfk777
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 8:59 pm

Cunard wrote:
ZuluTime wrote:
I think you need to do some more reading up on Laker. GDS manipulation was nothing to do with it.

Basically it had a massive order book that it could not finance and the US dollar exchange rate went the wrong way against them. The other airlines were dumping capacity but also objected to GE and McDD about a proposed deal to help Laker with its finances.


YOUR ABSOLUTELY SPOT ON WITH YOUR ANALYSIS REGARDING THE COLLAPSE OF LAKER AIRWAYS IN FEBRUARY 1982.

I typed it in capital letters for a reason to reinforce the point.

I'm glad that you replied as it saved me doing so and your facts are entirely correct regarding the collapse of LAKER and it absolutely nothing to do with the manipulation of the airlines GDS.

I remember that whole saga as if it was yesterday with Sir Freddie Laker stood on the steps outside of the Lonrho Groups Head Office in London with Lord Lonrho himself alongside him who was intending to be Lakers saviour which ultimately failed eventually bringing down the airline on Friday 05 February 1982.



There was a man named Tiny Rowland who was CEO, Managing Director, of LONRHO. LonRho stands for London Rhodesia trading company, this firm had lots of operations in Africa. There was never "Lord LonRho", Tiny Rowland was a controversial man who had better contacts in Africa then the British Government. Westminster hated this and often made Rowland's life miserable as they could. When Rowland died Lonrho's assets were sold and the firm name died, sadly. This was one english firm that was created from colonial times but survived them. Today Swire and Jardine's in Hing Kong are such companies. Long may they live in Hong Kong, China.
 
a350lover
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:04 pm

80% of the posts here talk about long haul operations as the main cause for Norwegian weakness in finances.

What if they just get rid off them all, grab the money and re-focus on being an ultra-low-cost-Pan-European operator? They’d still be “pretty” at the eyes of IAG, plus I am pretty sure they could find a way to be profitable.

The thing is Norwegian didn’t have enough with just being a Pan-European operator. They wanted a bigger cake, a rather “PanAm” cake. Hopefully story ends in a different way this time.
 
PlanesNTrains
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:08 pm

mcdu wrote:
If this is the end there will be few in the industry to shed tears for their disappearance.

All they do is come into markets, operate at a loss. The established carriers have to compete with them and it puts downward pressure on all employees. In the end they cost the established carriers and employees millions and they vanish in the night after they collapse.


True.

Having said that, it’s all about who’s coming out ahead in the moment. While DL (for example) might take a hit on their transatlantic fares, losing money and perhaps reducing their presence, Boeing and Airbus (and suppliers) are busy building hundreds of brand new planes, airports are getting millions more in landing fees, concessions and suppliers are selling more product, and more people are able to travel. Hotels fill more rooms, restaurants are busier, etc.

It sucks for the legacy airlines, their shareholders, and sometimes their employees. At the same time, plenty of other people are quite happy.
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
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Faro
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:17 pm

There are many measures to assess the risk of bankruptcy of a given company. Most are monetary or legal like loan covenants and the lot but one important measure is not. And that is the number and frequency of press articles addressing the company’s illiquidity and/or risk of bankruptcy.

Articles on the theme of DY’s potential bankruptcy keep coming, and many are from reputable press outlets.

The risk may or may not be imminent, but it is real.


Faro
The chalice not my son
 
a350lover
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:35 pm

I feel Norwegian is quite stubborn. They were convinced on the thought they were doing something absolutely revolutionary. That’s a bit “snob” in my opinion. Norwegian has often been appreciated as a start-up business, compared with other “projects” like Amazon. The difference probably has to do with “frequency of use”. While Amazon is used worldwide, and even on a daily basis for many people, traveling isn’t exactly the same thing. Long time ago investors should have asked Norwegian what were the signs in order to believe in such a start-up project.

Even if they wanted to keep part of the MAX operation, that would still be quite reasonable compared to the amount of problems, sub-fleets and sub-companies that the whole long-haul section of the company has created. They could try to fly some TATL routes with the MAX, either the current network, or some new places if they could feed a bigger hub to Dublin from strategic places in Europe – hard to believe when Ryanair is there.

London is a huge market, and the competence is fierce – I agree. It’d be cool if Norwegian could deploy its presence in markets like the ones you commented before, namely MAN or CGN, but is there enough market there like to build brand-awareness from zero? I’d remain committed to Scandinavia and Gatwick/Ireland. Would the 737MAX have the range like to reach some US East Coast cities from LGW?

Extensively discussed here has been Norwegian and its AOCs. I’d keep Norwegian Air International, Norwegian Air Shuttle and Norwegian Air UK. I would make them equally big so that none of them becomes less effective in the operation. Many people have said this is strength for Norwegian. I believe they haven’t been strict enough in the way they have developed them all, especially for the long-haul flights. For instance, NUK (DI) flights out of LGW for Singapore and BAires can only be flown by specific aircrafts and crews. When a couple of days ago LGW closed after the “drones’ issue” and all airlines needed to reorganize all of their operations, Norwegian might have spare 787s sitting there, but those registered under the NAS certificate would not be able to be used neither in SIN or EZE routes. Mixing up several AOCs in the same base means they are duplicating structures and “messing” the whole idea of cost control. Fly only where you can, and fly there as much as you can.

They have another big problem with the length of their flights. I bet Norwegian is the low cost carrier with the average longest flights. The whole long-haul operation per se plays a big part on this, but most of the short-haul network is the same. That’s fine, for obvious reasons it’ll always be like that due to most of the operations originating in Scandinavia, but that decreases aircraft utilization. Most of Norwegian’s rosterings in short haul are 4-sectors per day. Many low-cost players in Europe tend to operate 6am-till midnight in a 8-sector basis. Norwegian should find ways to improve this in order to be able to fit at least 2 extra sectors per aircraft per day. Being a leisure airline should help on this.
Last edited by a350lover on Sun Dec 23, 2018 9:42 pm, edited 2 times in total.
 
Kikko19
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:37 pm

PlanesNTrains wrote:
mcdu wrote:
If this is the end there will be few in the industry to shed tears for their disappearance.

All they do is come into markets, operate at a loss. The established carriers have to compete with them and it puts downward pressure on all employees. In the end they cost the established carriers and employees millions and they vanish in the night after they collapse.


True.

Having said that, it’s all about who’s coming out ahead in the moment. While DL (for example) might take a hit on their transatlantic fares, losing money and perhaps reducing their presence, Boeing and Airbus (and suppliers) are busy building hundreds of brand new planes, airports are getting millions more in landing fees, concessions and suppliers are selling more product, and more people are able to travel. Hotels fill more rooms, restaurants are busier, etc.

It sucks for the legacy airlines, their shareholders, and sometimes their employees. At the same time, plenty of other people are quite happy.

legacies have all the countermeasures needed to fight low costs, they are already selling bare bones tickets with no bags and miles for peanuts. people are travelling more every year so only an economical bust will hit them. and hard. and it's coming soon. the donald, brexit, eu crumbling, china slowing down are not good signs for the 2019.
 
aviationaware
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:40 pm

oslmgm wrote:
aviationaware wrote:
Norwegian is toast. I expect their domestic Norwegian core operations will continue in some form (they are rather vital to the Norwegian government) and IAG to purchase some of the distressed assets. The rest will go under.

How are they "rather vital to the Norwegian government"? As a Norwegian citizen, this is news to me.


Are you kidding me? You can't get around Norway without an aircraft, and with DY gone there would be monopolies all over the place.
 
ZuluTime
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:47 pm

A set of fare monitoring and airline route profitability figures published on line recently showed Norwegian losing 80 Euros per passenger on LGW long haul. Are you really sure it’s not the problem ? I suspect it is at least part of the problem and yields are poor.
 
BestWestern
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:57 pm

Cologne would be building a brand from scratch for. norwegian, but as Eurowings heads to Düsseldorf with long haul, to replace Air Berlin, the market is wide open. The airport is about an hour from Frankfurt, by train and has a huge catchment area to take pax from.
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 9:59 pm

a350lover wrote:
80% of the posts here talk about long haul operations as the main cause for Norwegian weakness in finances.

What if they just get rid off them all, grab the money and re-focus on being an ultra-low-cost-Pan-European operator? They’d still be “pretty” at the eyes of IAG, plus I am pretty sure they could find a way to be profitable.

The thing is Norwegian didn’t have enough with just being a Pan-European operator. They wanted a bigger cake, a rather “PanAm” cake. Hopefully story ends in a different way this time.


The main reason why Norwegian has gotten so popular in Norway is that when SAS insisted on doing long haul from Denmark and Sweden, but not Norway, Norwegian made a point that they would start longhaul from Norway and more generally take up the competition with SAS. SAS basically had monopoly in Norway at the time and had forced many other airlines in Norway out of business thanks to government financial backing and favourability etc. At the time, the Norwegian and long haul part of SAS were the only parts of SAS that had a surpluss and the surpluss from the Norwegian part, payed for the debt in the Swedish and Danish parts of SAS. Needless to say, Norwegians in Norway got frustrated with this. SAS Norway made the most money, but Norway got little in return for it. Sweden had the main office, Denmark had the main hub, while the Norwegian part got less and less. No long haul, the technical facilties wich was the best got moved from Norway, Norwegians were forced to transfer through either Arlanda or Copenhagen especially when going longhaul etc etc. In the end the hatred toward SAS got so big, that when Norwegian announced that they would take up the competition and promised long haul from Norway, they got very popular.

Norwegian might have to let go of the long haul part and maybe close all together, but giving up the long haul. part is most likely the part that the ceo Bjørn Kjos wants to give up the least.
 
ZuluTime
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 10:09 pm

Starting a whole new set of routes such as from CGN or MAN (regardless of how sensible or not) is hardly the answer for an airline which seems to be burning cash it hasn’t got. It’s an academic debate as to whether it would be good or bad.

And for Norwegian domestics, I am sure Wideroe would and could gear up. It’s not as though there is a worldwide shortage of Q400s as a good vehicle for such operations.
 
CeddP
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 10:14 pm

Hey guys, just click once again on the link on the first post of this thread. Please admire the headline change since this morning !!
Come one, there’s absolutely nothing new in there, no tangible figure or financial report, just the opinion of a guy who heard someone saying something, but hey, “opinions expressed by Forbes contributors are their own” !! It was just a clickbait from the start...

Edit : and thinking about it, we might aswell do the same as Forbes, and change the title of this thread...
 
Cunard
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 10:20 pm

jfk777 wrote:
Cunard wrote:
ZuluTime wrote:
I think you need to do some more reading up on Laker. GDS manipulation was nothing to do with it.

Basically it had a massive order book that it could not finance and the US dollar exchange rate went the wrong way against them. The other airlines were dumping capacity but also objected to GE and McDD about a proposed deal to help Laker with its finances.


YOUR ABSOLUTELY SPOT ON WITH YOUR ANALYSIS REGARDING THE COLLAPSE OF LAKER AIRWAYS IN FEBRUARY 1982.

I typed it in capital letters for a reason to reinforce the point.

I'm glad that you replied as it saved me doing so and your facts are entirely correct regarding the collapse of LAKER and it absolutely nothing to do with the manipulation of the airlines GDS.

I remember that whole saga as if it was yesterday with Sir Freddie Laker stood on the steps outside of the Lonrho Groups Head Office in London with Lord Lonrho himself alongside him who was intending to be Lakers saviour which ultimately failed eventually bringing down the airline on Friday 05 February 1982.



There was a man named Tiny Rowland who was CEO, Managing Director, of LONRHO. LonRho stands for London Rhodesia trading company, this firm had lots of operations in Africa. There was never "Lord LonRho", Tiny Rowland was a controversial man who had better contacts in Africa then the British Government. Westminster hated this and often made Rowland's life miserable as they could. When Rowland died Lonrho's assets were sold and the firm name died, sadly. This was one english firm that was created from colonial times but survived them. Today Swire and Jardine's in Hing Kong are such companies. Long may they live in Hong Kong, China.


Your absolutely correct it was Tiny Rowland Chairman of the former Longhro Group rather than the person being called Lord Longthro.

Tiny Rolland was indeed a character who had all those contacts in Africa and was on the steps with Sir Freddie Laker, he was supposed to be the saving grace for Laker as he and Freddie were long time friends but as we all know it never worked out in the end.

Tiny Rolland was rather prominent man at the time because a lot of people in the media as well as highly society at the time looked upon him with disdain with some accusations of dirty dealings in Africa a continent as you've rightly pointed out where he had more connections than HM Government.

The points that you mention regarding the similarities between the Longhro Group and the John Swire Group are quite apt.

I was a 16yo lad at the time and I can remember thinking what a strange name TINY was!

On a side note am sure that your aware that the LONGHRO GROUP once owned the Gatwick based British cargo airline TRADEWINDS AIRLINES which at one time had a lot of flights to and from the African continent and in particular Uganda.
Last edited by Cunard on Sun Dec 23, 2018 10:24 pm, edited 1 time in total.
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oslmgm
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 10:21 pm

aviationaware wrote:
oslmgm wrote:
aviationaware wrote:
Norwegian is toast. I expect their domestic Norwegian core operations will continue in some form (they are rather vital to the Norwegian government) and IAG to purchase some of the distressed assets. The rest will go under.

How are they "rather vital to the Norwegian government"? As a Norwegian citizen, this is news to me.


Are you kidding me? You can't get around Norway without an aircraft, and with DY gone there would be monopolies all over the place.


I'm not kidding you. What makes you think other airlines won't move in if Norwegian collapses?
 
Cunard
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 10:29 pm

PatrickZ80 wrote:
Cunard wrote:
Manchester has a fairly substantial network to the USA and it's definitely not an underserved market such as Cologne no comparison whatsoever.


But Cologne-Bonn is the main long haul hub for EuroWings, which is a competitor to Norwegian. Just like Norwegian, EuroWings also offers low-cost long haul in a pretty similar product. It might also not be a good idea to go up against them, specially since EuroWings is backed by the Lufthansa group. Norwegian is guaranteed to lose on that one. Of course Manchester and Cologne-Bonn were just examples, but they weren't the best examples.

What if Norwegian were to make a deal with Wizzair? The largest Wizzair base is Budapest, from there they cover just about all of Europe. What if Norwegian would base a couple of 787s in Budapest and get Wizzair to feed them? Local Budapest passengers might be low-yielding, but all the passengers that Wizzair can haul to Budapest from the rest of Europe would be a lot higher yielding. Both Wizzair and Norwegian would profit from this.


But aren't EUROWINGS moving their long haul flights from CGN to DUS?

I thought that was the plan, if so it would give NORWEGIAN an ideal airport with no long haul competition and I think that's why SKIP and myself mentioned CGN as being an ideal candidate for NORWEGIAN to possibly expand in Germany.
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senatorflyer
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 10:38 pm

PatrickZ80 wrote:
Cunard wrote:
Manchester has a fairly substantial network to the USA and it's definitely not an underserved market such as Cologne no comparison whatsoever.


But Cologne-Bonn is the main long haul hub for EuroWings, which is a competitor to Norwegian. Just like Norwegian, EuroWings also offers low-cost long haul in a pretty similar product. It might also not be a good idea to go up against them, specially since EuroWings is backed by the Lufthansa group. Norwegian is guaranteed to lose on that one. Of course Manchester and Cologne-Bonn were just examples, but they weren't the best examples.

What if Norwegian were to make a deal with Wizzair? The largest Wizzair base is Budapest, from there they cover just about all of Europe. What if Norwegian would base a couple of 787s in Budapest and get Wizzair to feed them? Local Budapest passengers might be low-yielding, but all the passengers that Wizzair can haul to Budapest from the rest of Europe would be a lot higher yielding. Both Wizzair and Norwegian would profit from this.


No it isn’t, they have moved or will move it to DUS.
 
senatorflyer
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 10:56 pm

For those who think Norwegian isn’t having any major issues. The balance sheet as of September 30th says something different.

The short term liabilities (bills needing to be paid realativly quickly) are at 23b NOK. Money available and funds to be received relatively quickly, including the investments are 13b NOK. And that’s not even talking about their long term commitments. So clearly there is a problem.
 
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SuperTwin
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 11:23 pm

Kikko19 wrote:
PlanesNTrains wrote:
mcdu wrote:
If this is the end there will be few in the industry to shed tears for their disappearance.

All they do is come into markets, operate at a loss. The established carriers have to compete with them and it puts downward pressure on all employees. In the end they cost the established carriers and employees millions and they vanish in the night after they collapse.


True.

Having said that, it’s all about who’s coming out ahead in the moment. While DL (for example) might take a hit on their transatlantic fares, losing money and perhaps reducing their presence, Boeing and Airbus (and suppliers) are busy building hundreds of brand new planes, airports are getting millions more in landing fees, concessions and suppliers are selling more product, and more people are able to travel. Hotels fill more rooms, restaurants are busier, etc.

It sucks for the legacy airlines, their shareholders, and sometimes their employees. At the same time, plenty of other people are quite happy.


people are travelling more every year so only an economical bust will hit them. and hard. and it's coming soon. the donald, brexit, eu crumbling, china slowing down are not good signs for the 2019.


I entirely agree that clouds are forming for 2019.

The amazing thing is that this basket case can't even get its act together during a prolonged period of solid economic performance. There will be no hope for them when the economy begins to dive.

The big players have the finances to ride it out the next storm, this outfit definitely does not.
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SuperTwin
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Sun Dec 23, 2018 11:30 pm

Mortyman wrote:
a350lover wrote:
80% of the posts here talk about long haul operations as the main cause for Norwegian weakness in finances.

What if they just get rid off them all, grab the money and re-focus on being an ultra-low-cost-Pan-European operator? They’d still be “pretty” at the eyes of IAG, plus I am pretty sure they could find a way to be profitable.

The thing is Norwegian didn’t have enough with just being a Pan-European operator. They wanted a bigger cake, a rather “PanAm” cake. Hopefully story ends in a different way this time.


The main reason why Norwegian has gotten so popular in Norway is that when SAS insisted on doing long haul from Denmark and Sweden, but not Norway, Norwegian made a point that they would start longhaul from Norway and more generally take up the competition with SAS. SAS basically had monopoly in Norway at the time and had forced many other airlines in Norway out of business thanks to government financial backing and favourability etc. At the time, the Norwegian and long haul part of SAS were the only parts of SAS that had a surpluss and the surpluss from the Norwegian part, payed for the debt in the Swedish and Danish parts of SAS. Needless to say, Norwegians in Norway got frustrated with this. SAS Norway made the most money, but Norway got little in return for it. Sweden had the main office, Denmark had the main hub, while the Norwegian part got less and less. No long haul, the technical facilties wich was the best got moved from Norway, Norwegians were forced to transfer through either Arlanda or Copenhagen especially when going longhaul etc etc. In the end the hatred toward SAS got so big, that when Norwegian announced that they would take up the competition and promised long haul from Norway, they got very popular.

Norwegian might have to let go of the long haul part and maybe close all together, but giving up the long haul. part is most likely the part that the ceo Bjørn Kjos wants to give up the least.


Ah. So that's the underlying reason for the love affair with these guys.
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SASViking
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 12:00 am

Mortyman wrote:
a350lover wrote:
80% of the posts here talk about long haul operations as the main cause for Norwegian weakness in finances.

What if they just get rid off them all, grab the money and re-focus on being an ultra-low-cost-Pan-European operator? They’d still be “pretty” at the eyes of IAG, plus I am pretty sure they could find a way to be profitable.

The thing is Norwegian didn’t have enough with just being a Pan-European operator. They wanted a bigger cake, a rather “PanAm” cake. Hopefully story ends in a different way this time.


The main reason why Norwegian has gotten so popular in Norway is that when SAS insisted on doing long haul from Denmark and Sweden, but not Norway, Norwegian made a point that they would start longhaul from Norway and more generally take up the competition with SAS. SAS basically had monopoly in Norway at the time and had forced many other airlines in Norway out of business thanks to government financial backing and favourability etc. At the time, the Norwegian and long haul part of SAS were the only parts of SAS that had a surpluss and the surpluss from the Norwegian part, payed for the debt in the Swedish and Danish parts of SAS. Needless to say, Norwegians in Norway got frustrated with this. SAS Norway made the most money, but Norway got little in return for it. Sweden had the main office, Denmark had the main hub, while the Norwegian part got less and less. No long haul, the technical facilties wich was the best got moved from Norway, Norwegians were forced to transfer through either Arlanda or Copenhagen especially when going longhaul etc etc. In the end the hatred toward SAS got so big, that when Norwegian announced that they would take up the competition and promised long haul from Norway, they got very popular.

Norwegian might have to let go of the long haul part and maybe close all together, but giving up the long haul. part is most likely the part that the ceo Bjørn Kjos wants to give up the least.


It makes perfect sense for SAS to mainly focus on ARN and CPH on longhaul. Last month there were about twice as many international pax from CPH than OSL and about 50% more from ARN. ARN and CPH also have significantly larger catchment areas than OSL. These numbers are not new, it has been like this for ages. SAS' main focus is business travellers, this means that frequency and deparure times are important. It's easier to fill up a daily A330/A340 with pax to somewhere from CPH or ARN than OSL. Norwegians main focus is leisure travellers, for those price is the most important thing. So they can get away with a few weekly flights to leisure destination, often with awful flight times. That wouldn't work for SAS.

Also is Norwegian really that popular in Norway? I don't know a single Norwegian, actually talking positively about them, well except you. They all say that Norwegian are very unreliable, have dirty planes, not really that cheap on routes from Norway etc.
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GalebG4
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 12:32 am

It is extremely hard for airline to die. If we look at Air Berlin they were flying in red for nearly 10 years before they went bankrupt. So Norwegian probably has more time than analysts actually expect. 787 is killing them, unfortunately. :cry:
 
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Mortyman
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 12:34 am

SASViking wrote:
Mortyman wrote:
a350lover wrote:
80% of the posts here talk about long haul operations as the main cause for Norwegian weakness in finances.

What if they just get rid off them all, grab the money and re-focus on being an ultra-low-cost-Pan-European operator? They’d still be “pretty” at the eyes of IAG, plus I am pretty sure they could find a way to be profitable.

The thing is Norwegian didn’t have enough with just being a Pan-European operator. They wanted a bigger cake, a rather “PanAm” cake. Hopefully story ends in a different way this time.


The main reason why Norwegian has gotten so popular in Norway is that when SAS insisted on doing long haul from Denmark and Sweden, but not Norway, Norwegian made a point that they would start longhaul from Norway and more generally take up the competition with SAS. SAS basically had monopoly in Norway at the time and had forced many other airlines in Norway out of business thanks to government financial backing and favourability etc. At the time, the Norwegian and long haul part of SAS were the only parts of SAS that had a surpluss and the surpluss from the Norwegian part, payed for the debt in the Swedish and Danish parts of SAS. Needless to say, Norwegians in Norway got frustrated with this. SAS Norway made the most money, but Norway got little in return for it. Sweden had the main office, Denmark had the main hub, while the Norwegian part got less and less. No long haul, the technical facilties wich was the best got moved from Norway, Norwegians were forced to transfer through either Arlanda or Copenhagen especially when going longhaul etc etc. In the end the hatred toward SAS got so big, that when Norwegian announced that they would take up the competition and promised long haul from Norway, they got very popular.

Norwegian might have to let go of the long haul part and maybe close all together, but giving up the long haul. part is most likely the part that the ceo Bjørn Kjos wants to give up the least.


It makes perfect sense for SAS to mainly focus on ARN and CPH on longhaul. Last month there were about twice as many international pax from CPH than OSL and about 50% more from ARN. ARN and CPH also have significantly larger catchment areas than OSL. These numbers are not new, it has been like this for ages. SAS' main focus is business travellers, this means that frequency and deparure times are important. It's easier to fill up a daily A330/A340 with pax to somewhere from CPH or ARN than OSL. Norwegians main focus is leisure travellers, for those price is the most important thing. So they can get away with a few weekly flights to leisure destination, often with awful flight times. That wouldn't work for SAS.

Also is Norwegian really that popular in Norway? I don't know a single Norwegian, actually talking positively about them, well except you. They all say that Norwegian are very unreliable, have dirty planes, not really that cheap on routes from Norway etc.


Yet millions of Norwegians keep on flying them and the numbers of domestic and international passengers keeps growing yearly. Me being the only positive passenger s ? Seriously ?!

Then you know / speak to very few Norwegians … I find Norwegian to generally be cleaner and more modern looking than SAS. When that is said, SAS is a company I hope will continue to have sucess. It was a very pioneering airline in the old days and have a grat history. But I don't like the fact that they have had basically had monopoly in Norway and has been backed up by the government in such a large way financially for many years, allowing SAS to put all competition out of business. It's only been in the last few years that SAS has lost the backing of the Scandinavian governemnts.

Yes CPH has more international passengers, because SAS has focused on CPH for many decades as their main hub and far less on OSL and the former FBU.
 
Varsity1
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 1:35 am

Europe has too many airlines.

It isn't reasonable or practical to have every tiny little nation state with an airline. Imagine if all 50 states had their own airline? Unsustainable.
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skipness1E
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 2:07 am

Varsity1 wrote:
Europe has too many airlines.

It isn't reasonable or practical to have every tiny little nation state with an airline. Imagine if all 50 states had their own airline? Unsustainable.

It is and they do, to the extent the local market has specific needs and wants. Luxair does quite well at one end and Lufthansa Group, IAG and KLM are the majors at the other end. I see no need to merge Finnair with Aer Lingus, it makes no sense. Even IAG, hardly one for soft management, have left Iberia, BA and Aer Lingus maintain their own strong brands.

Who remember Deutsche BA? Or TAT? Doesn’t work at that level, at the loco end, easyJet and Ryanair are the only two genuine pan European airlines, with Vueling and Norwegian some way behind. Eurowings has an Austrian AOC but remains German IMHO. Europe, for better or worse, remains a continent of nation states, the tide may have turned against the Macrons and Merkels of the world at last.
 
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PatrickZ80
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 7:13 am

SuperTwin wrote:
The amazing thing is that this basket case can't even get its act together during a prolonged period of solid economic performance. There will be no hope for them when the economy begins to dive.

The big players have the finances to ride it out the next storm, this outfit definitely does not.


Somehow I doubt that. I'm not talking specifically about Norwegian here, but more general. LCCs always perform better in times of crisis, while the legacy carriers suffer. During a crisis people keep buying the stuff they need, but they watch the prices more. That's why cheaper products sell better and more expensive products sell less. During the last crisis Ryanair was able to make a significant growth, and all along they were profitable. While all the legacies were making losses for being too expensive, the LCC business model proved itself.

Now that the crisis is over and the economy is booming, the LCCs face their issues. Not enough cheap staff, people paying more to fly a legacy airline because they can afford it (and therefor not flying an LCC), etc. The question with LCCs is not if they can sustain a crisis, they can. The question is if they can sustain booming times.
 
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 7:15 am

SASViking wrote:
Also us Scandinavians do not take a "different view of the world"...


As a non Scandinavian living in Norway this is one of the least accurate comment I’ve ever read on a.net. I haven’t laughed so hard all year’
 
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PatrickZ80
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 7:17 am

skipness1E wrote:
Varsity1 wrote:
Europe has too many airlines.

It isn't reasonable or practical to have every tiny little nation state with an airline. Imagine if all 50 states had their own airline? Unsustainable.

It is and they do, to the extent the local market has specific needs and wants. Luxair does quite well at one end and Lufthansa Group, IAG and KLM are the majors at the other end. I see no need to merge Finnair with Aer Lingus, it makes no sense. Even IAG, hardly one for soft management, have left Iberia, BA and Aer Lingus maintain their own strong brands.

Who remember Deutsche BA? Or TAT? Doesn’t work at that level, at the loco end, easyJet and Ryanair are the only two genuine pan European airlines, with Vueling and Norwegian some way behind. Eurowings has an Austrian AOC but remains German IMHO. Europe, for better or worse, remains a continent of nation states, the tide may have turned against the Macrons and Merkels of the world at last.


I absolutely agree, however I can see where this is coming from. Varsity1 is thinking from an American point of view, which is very different from a European point of view. An American may find Europe has too many Airlines, a European would never think that way.

By the way, I would call Wizzair a pan-European airline too. Along with Ryanair and EasyJet, they're about the only ones who made it to that position. Legacy airlines in Europe still remain a strong connection to a country. This is something that every European understands, but Americans will never understand.
 
senatorflyer
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 7:32 am

PatrickZ80 wrote:
SuperTwin wrote:
The amazing thing is that this basket case can't even get its act together during a prolonged period of solid economic performance. There will be no hope for them when the economy begins to dive.

The big players have the finances to ride it out the next storm, this outfit definitely does not.


Somehow I doubt that. I'm not talking specifically about Norwegian here, but more general. LCCs always perform better in times of crisis, while the legacy carriers suffer. During a crisis people keep buying the stuff they need, but they watch the prices more. That's why cheaper products sell better and more expensive products sell less. During the last crisis Ryanair was able to make a significant growth, and all along they were profitable. While all the legacies were making losses for being too expensive, the LCC business model proved itself.

Now that the crisis is over and the economy is booming, the LCCs face their issues. Not enough cheap staff, people paying more to fly a legacy airline because they can afford it (and therefor not flying an LCC), etc. The question with LCCs is not if they can sustain a crisis, they can. The question is if they can sustain booming times.


Your theory is somewhat incorrect.
 
787Driver
Posts: 458
Joined: Fri Aug 04, 2017 9:05 pm

Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 7:42 am

Now the headline of the article was changed to something less alarming. Shame on the journalist for initially using the sensationalist approach even though he works for what is normally considered a serious media.
 
Boeing74741R
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 8:22 am

Cunard wrote:
Manchester has a fairly substantial network to the USA and it's definitely not an underserved market such as Cologne no comparison whatsoever.

AMERICAN AIRLINES

MAN-PHL

SINGAPORE AIRLINES

MAN-IAH

THOMAS COOK AIRLINES

MAN-BOS
MAN-LAS
MAN-LAX
MAN-MCO
MAN-SEA
MAN-SFO

UNITED AIRLINES

MAN-EWR

VIRGIN ATLANTIC/DELTA

MAN-ATL
MAN-BOS
MAN-JFK
MAN-LAS
MAN-LAX
MAN-MCO

Ten destinations to the USA from Manchester Airport from five different airlines although that figure is less than it previously was as in the past the airport also used to have service to,

CLT
DFW
ORD


IAD is also missing from that list, initially served by bmi and then later United at the expense of double-daily EWR. Also MIA which AA ran for one winter and Thomas Cook until about a year ago.

There are new route opportunities at MAN for new/existing airlines to serve, but I think Norwegian may have missed the boat at MAN. Look at how VS and MT have tinkered some of their US routes to pull out of one but become the sole airline on a particular route, I suspect the market can only sustain what it has already at this time, but there’s room for improvement (e.g. more BOS frequencies, VS reverting to year-round daily ATL/JFK once the RR 787 issues are sorted).
 
[email protected]
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Re: Reuters/Norwegian Media: DY at Risk of Collapse

Mon Dec 24, 2018 8:28 am

Always amusing that plane geeks think they can do a better job of running large companies when many stand by a fence writing down numbers or taking photos. ;-)
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."

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