LongHaul101
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IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 12:13 am

After the first move by IAG for Norwegian back in April 2018 there was a huge explosion of interest in both ends of the negotiations. After the dust settled the IAG end has remained fairly quiet as opposed to Norwegian constantly flying high and then crashing back down again with major issues (cough Iran cough) Nearly a year later we're still waiting on an answer. So I thought I'd give my own opinion.

Everyone wants Norwegian to remain independent in order to keep everyone else on their toes. However I have flown Norwegian a couple of times and I found the experience to be completely s**t. I'm also a loyal British Airways passenger so I would very much like to see Norwegian join IAG. Here's my reasoning

BA are viewed as pretty rubbish nowadays compared to what they were a couple of decades ago. But if you look at what they're doing they are slowly clawing their way back up the rankings. Such as new (and much better) catering and amenities in all classes and the incoming new Club World and first class seats. Whereas Norwegian seems to be seen as a bit of a White swan. However they have had to begin a dramatic cost cutting campaign in order to start chiselling away at their huge debt, already we've seen leg room in premium economy and some of the (very few) complimentary amenities being cut. IAG have refused to enter into a bidding war however if Lufthansa made a move for Norwegian they would not simply rollover and take it. They would definitely do everything in their power to prevent Lufthansa from sneaking into BA turf through the backdoor at Gatwick.

I believe that the Norwegian brand would be kept running if IAG did secure Norwegian because it is a very strong brand but I would definitely expect some big changes. I remember hearing in December 2018 that IAG would keep Level as the low cost long haul airline and move Norwegian up in to a medium service airline. I assume this would give you a complimentary meal and drinks but anything else is extra. I would also expect to see most slots and routes out of Gatwick would be transferred to British Airways with Gatwick finally returning to it's former glory as a major BA hub. I would guess that it would be organised into mainly business at Heathrow and mostly leisure at Gatwick.

As I said earlier I would like to see Norwegian become part of IAG for one major reason. British Airways. Back in 2006 BA were the world's best airline by a long way. They started to turn a loss after this point. With £292 million 2009. After cost cutting a lot, which has resulted in many very unpopular decisions but there was no where else for BA to go other than down. So they cut back and are now known as BA (Bloody Awful) again. Now they have turned huge profits and have recovered from their heavy losses a decade ago. In that time of cost-cutting competitors swooped in on the floundering airline. Norwegian was one of them. Now that BA coupled with other oneworld airlines and IAG have a very large number of seats across the Atlantic. If they do secure Norwegian they will be invulnerable across the Atlantic compared with Air France-KLM and Lufthansa Group. So what I believe we would see is British Airways innovating far more to keep themselves as the go to transatlantic airline. And return to their former glory as the glittering jewel in the crown of the aviation industry.

So there you have it. If Norwegian is bought out I believe we will see BA at least start to return to their former position as the undisputed king of the skies. Anyway that's what I want and hope for. I am slightly biased due to my gold BA executive club status but I still love BA even if they have gone down hill, they still hold an incredibly special place in my heart.

Let's wait and see what happens
 
sonicruiser
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 2:46 am

You make many good points but I think when the rubber meets the road, Brexit is the bigger problem for IAG right now. Also, merging two completely different brands shorts a ton of cash and usually ends in disaster. US mergers worked because more or less because ideologically they weren't that different. But BA/DY are completely different beasts and have literally nothing in common. They are about as similar as apples are to oranges in that both are very tasty, round, and colorful fruits. Mergers are good for expansion but that's historically been one of the few problems that BA doesn't have so really all they'd be doing is eliminating a competitor that can be easily replaced instead of doing the real work to elevate their own brand for a sustainable long term outlook in order to compete and return to the top and then stay there which takes time. As Alaska just learned, spending a ton of money just to kill a competitor costs a ton of money and not at much gain. So BA should tread cautiously and think twice. They're already suffering death from a thousand cuts, taking on the debt from a competitor will only accelerate and worsen the cost cutting situation even more than today. Consumers will pay the price for it in one way or another. Be careful what you wish for.
 
speedbird52
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 3:02 am

To be frank I see BA becoming only worse if IAG acquires Norwegian. Even less competition.
 
jetwet1
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 3:38 am

Just a little thing to note, I've flown Norwegian a few times on a couple of routes, LAX-LGW and LAX-CDG, in premium, I have noticed over the last 6 months or so that the prices in the premium cabin is slowly rising, could they be gaining traction and improving yields on their long haul routes ? I can't speak for the economy cabin, but if they can actually fly planes at a profit, why sell to IAG ?
 
YIMBY
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 7:42 am

I think they are glad that they could not buy Norwegian last year, as Brexit has got complicated and completely unpredictable and will take all their strategic resources. They can return to it when Brexit has been firmly settled and all relations have been stabilized, unless something else happens with Norwegian in the meanwhile.

I hope Norwegian to stay independent, but I recognize it might need bigger muscles to cope with all the challenges.
 
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AAR
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 8:23 am

Norwegian has made a brand paid by the shareholders and equity is gone. I received Monday a report on the financials expected on the 4Q and equity will be gone unless they will receive more money from the shareholders or hard core norwegians again. Norwegian has 215 planes in firm order to be delivered before end of 2020.
IAG can risk to be splitted caused by 2 factors, first the need to secure that Iberia, Aer Lingus, Vueling and Level will be owned by someone in EU, if a hard Brexit comes British Airways must renegotiate a new UK - US open skies and here prove they are British and not owned by someone in EU. IAG do not have economical problems but do have problems who owns what in IAG.

Norwegian long haul can earn money maybe 4 months in the year the rest of the year will bring in a deficit... note Norwegian do still have 15 Dreamliners in order. Where should they let them fly
there are speculations in Norway right now they want access to the Russian corridor over Siberia this negotiation was made in the Fall between Russian - Norway, Sweden,Denmark and will remain as it is... I have a report on Norwegian it is very bad.. the bank ABG Sundal Collier said 2 weeks ago the equity is gone in the first Q - I have a report from another bank which cover Norwegian few days old ... the money is gone.

Norwegian need to get bankrupt and after few months time be started again solely in the Nordic countries with around 45 airplanes.

Norwegian made a brand paid by the shareholders... Everyone can make a brand with selling tickets under production price..
 
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Richard28
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 8:53 am

speedbird52 wrote:
To be frank I see BA becoming only worse if IAG acquires Norwegian. Even less competition.


I agree.

the OP's posts conclusion is not quite right in my opinion.

BA/IAG need competition to keep them on their toes.

Without competition there is less innovation and higher prices... not great from a customers perspective.
 
a350lover
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 9:03 am

I see Lufthansa still quite far from making any move towards Norwegian. Let's not forget that they own kind of a big group, which has its own lowcost operator for both short-haul and long-haul routes (Eurowings). Although through DY they could gain access to a very strategic marketplace (Scandinavia), they have already a better position there than IAG does, so I suspect that won't happen just yet.

I agree IAG must be thinking in all the lobbying necessary in order to secure their traffic rights from to the UK, and for all of their EU airlines (IB, VY and EI). Like I have said in the past in this forum, I believe politics and all administrations should be moderate, adaptable and fast enough in order to secure the benefit of the businesses at both ends of this issue. Considering it's all about politics, I am not too optimistic though, that's right. Brexit may have some consequences for the economies at first, but it's hard to believe that Brexit will stop people flying to/from the UK, or between the States and the UK. London for instance is maybe the busiest air market in the world. So... why don't we all just accept the new scenario and move forward?

Norwegian has played its cards. They got an offer, which in their eyes did not valued the company rightly. They got a chance to decide whether they wanted to become part of a bigger group, even at the cost of loosing some independence in decision-make (of course!), and they DID NOT want that. Now they seem to be quite alone in making it through the toughest months of the winter season. As much as I like the product (who doesn't?), I can't understand what sort of marketing and economies of scale are beneath all the business plan to support the idea that it can be viable. Weaknesses to me stay in so many points:

-Dispersion of a focus. Scandinavia? Gatwick? Southern Europe (i.e Spain)? USA?
-Complexity of the organization. They first opened up bases in Spain to try and cut costs down by sending them to Scandinavia on endless trips for flying domestic routes. They opened up the BKK base to fly Thai crews across the globe on endless trips... the amount of AOCs they operate with. They all were treated as good moves to sneak in every possible market. It all turned into them eventually.
-Lack of a bigger group behind. By the time IAG made the bid and acquired the stake it had/has in Norwegian, we all had admitted they desperately needed some partnership, at an industrial not just financial level.
-Much of a "personalist" plan behind: Bjorn Kjos, as a former aviatior, he probably had many good ideas to start with. However, I believe he is quite stubborn on defending a viability which it isn't just disputed by some. FT, Forbes, many of the investment agencies around the globe have all made their warnings. All the long-haul plan I believe represents very well this Kjos's obstinacy. It may came from the historical weakness position of OSL as a long-haul player within Scandinavia, and he probably wanted very much to come up with the ultimate long-haul plan. If only it worked...
 
Boeing74741R
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 9:16 am

LongHaul101 wrote:
As I said earlier I would like to see Norwegian become part of IAG for one major reason. British Airways. Back in 2006 BA were the world's best airline by a long way. They started to turn a loss after this point. With £292 million 2009.


2009 was the height of the global economic recession. BA weren't unique as a lot of their rivals would have also made losses around that time.
 
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readytotaxi
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 9:55 am

All the signs are there again for another deeper recession, by the summer it might well be grim.
you don't get a second chance to make a first impression!
Growing older, but not up.
 
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AAR
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 10:14 am

NAS reported total equity of NOK5.277m at the end of Q3 18. We estimate a loss of NOK2.696m in Q4 18 and a loss of NOK997m from the NOFI share price drop, bringing total equity at the end of Q4 18 to NOK1.584m


NAS' current aircraft orders
A320 NEOs 65
A321 LRs 30
B737 MAX 104
B787-9 15
 
armchairceonr1
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 10:36 am

AAR wrote:
NAS reported total equity of NOK5.277m at the end of Q3 18. We estimate a loss of NOK2.696m in Q4 18 and a loss of NOK997m from the NOFI share price drop, bringing total equity at the end of Q4 18 to NOK1.584m


NAS' current aircraft orders
A320 NEOs 65
A321 LRs 30
B737 MAX 104
B787-9 15

What you mean by we?

I estimate that their Q4 EBT is -1500mNOK -2000mNOK, without hedge losses which are around 1800mNOK. NOFI share price drop come mostly to equity, but 1000mNOK kis quite good guess. So I think that their equity is around +/ - 1000mNOK, before deferred tax bookings. BTW they have already booked deferred tax to their balance sheet over 1000mNOK, to which I don't see much value right now.
 
Galwayman
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 12:40 pm

BA was never the best airline anywhere at anytime but it possibly had the best marketing back in the 1980s
 
Someone83
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 12:43 pm

According to IAG, today, they will not bid for Norwegian. Share is down 20% today

https://www.londonstockexchange.com/exc ... 45896.html
 
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AAR
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 12:51 pm

Willie Walsh announced already in the weekend they are not interested in NAS... The count down for NAS has started... when the traffic figures for January comes early February all banks will predict the end .. Jyllands Posten a national newspaper of Denmark made an article in the spring last year NAS has a deficit of 30millNOK per day.. the fleet has gone bigger since and more people employed add Argentina flying with ½ filled planes.
 
armchairceonr1
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 1:04 pm

It wasn't very clever move from IAG to buy Norwegian shares last year, but now they really made big grave to Kjos. Price for next share issue will be around 100 NOK, let's see if mr. market is interested or not. :)
 
jetwet1
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 1:20 pm

AAR wrote:
NAS reported total equity of NOK5.277m at the end of Q3 18. We estimate a loss of NOK2.696m in Q4 18 and a loss of NOK997m from the NOFI share price drop, bringing total equity at the end of Q4 18 to NOK1.584m


NAS' current aircraft orders
A320 NEOs 65
A321 LRs 30
B737 MAX 104
B787-9 15


Thank you for that, it certainly puts a different view on my post above, I have tried to be optimistic when it comes to DY, but I just don't know if they can make it.
 
armchairceonr1
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 2:11 pm

AAR wrote:
Norwegian has made a brand paid by the shareholders and equity is gone. I received Monday a report on the financials expected on the 4Q and equity will be gone unless they will receive more money from the shareholders or hard core norwegians again. Norwegian has 215 planes in firm order to be delivered before end of 2020

Where you get these numbers? What I know, they have 62 planes to be delivered before end of 2020(40 MAX, 10 787 and 12 321LR). They have deferred their A321LR deliveries, they not take any of those this year, before their plan was take 4.
 
Kikko19
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 4:32 pm

well IAG sold all the shares. hard times for Norwegian
 
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PatrickZ80
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Re: IAG Norwegian: my views 9 months on

Thu Jan 24, 2019 6:08 pm

Kikko19 wrote:
well IAG sold all the shares. hard times for Norwegian


Hard times indeed and it might eventually lead to bankruptcy. My prediction is that, once that moment comes, Ryanair will step in and place a bid for Norwegian. Since it's their only option, they have to accept. Norwegian will then be integrated into Ryanair just like they did with LaudaMotion.

Under Ryanair management a number of changes will take place at Norwegian, making it even more low-cost than it already is. They'll lower the cost base and increase ancillary revenue. A good number of routes will be scrapped or moved to other airports. I can see them terminate Norwegian Argentina since it's too distant and they got no market there.

This would get Ryanair access to the Scandinavian market, where currently they hardly got access. Also it would get them a good number of slots at Gatwick. Slowly the Norwegian brand will be replaced by the Ryanair brand, starting with the short haul flights and eventually long haul too. The fact that both Norwegian and Ryanair fly the 737 makes this an easy process.
 
speedbird52
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 12:12 am

Richard28 wrote:
speedbird52 wrote:
To be frank I see BA becoming only worse if IAG acquires Norwegian. Even less competition.


I agree.

the OP's posts conclusion is not quite right in my opinion.

BA/IAG need competition to keep them on their toes.

Without competition there is less innovation and higher prices... not great from a customers perspective.

If I was a billionaire, and Heathrow T6 went ahead, I would become a millionaire by buying as many slots as possible, then creating a new "legacy carrier" at Heathrow, and watch BA slide into bankruptcy. Unfortunately, I am not a billionaire.
 
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Rajahdhani
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 1:52 am

PatrickZ80 wrote:
I can see them terminate Norwegian Argentina since it's too distant and they got no market there.


https://www.lonelyplanet.com/news/2018/03/26/ryanair-long-haul-air-europa/After launching their partnership last year, Ryanair has extended its deal with Air Europa, which allows travellers to connect from 15 European cities through Madrid, and fly onward to 16 countries in North, Central and South America.


Sell off the 787s to Air Europa (and/or wet lease from them if necessary - a specialty of theirs) and it becomes a decent short-medium term solution.

Backing to Argentina directly - keeping the LCC there might just be what might attract RyanAir even further. VivaAerobus (Mexico), VivaColombia and the proposed VivaCan all demonstrate that they are capable of operating in the market and perhaps the same can be done with an already existing base in Argentina. The tracks are already there, why not capitalize in another market?
 
jomur
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 2:12 pm

Just because IAG have/are selling thier current shares there is nothing stopping them buying more at a later date when it will cost them a lot less or just buy the whole business straight up if conditions are right. Some would say its a good move by IAG by getting the most they can now for the shares before the crash even move.
 
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AAR
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 3:03 pm

SEB Bank has today said a new buyer could be interested Delta Airlines ....
 
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PatrickZ80
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 4:34 pm

AAR wrote:
SEB Bank has today said a new buyer could be interested Delta Airlines ....


That could be interesting, however as a non-EU airline they'd not be allowed to have a majority share. This could be solved by having the rest of the shares bought by Air France-KLM. Norwegian could then become the long haul LCC that they wanted to have for some time, but never succesfully started. The short haul division of Norwegian could be integrated into Transavia.
 
BrianDromey
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 5:12 pm

PatrickZ80 wrote:
however as a non-EU airline they'd not be allowed to have a majority share. This could be solved by having the rest of the shares bought by Air France-KLM. Norwegian could then become the long haul LCC that they wanted to have for some time, but never succesfully started. The short haul division of Norwegian could be integrated into Transavia.


Norwegian is already a non-EU airline. It is, however, an EAA and EFTA airline, but the not quite the same. I don't think there are any rules in respect to aviation which differ significantly, but it is possible.
 
evomutant
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 5:14 pm

jomur wrote:
Just because IAG have/are selling thier current shares there is nothing stopping them buying more at a later date when it will cost them a lot less or just buy the whole business straight up if conditions are right. Some would say its a good move by IAG by getting the most they can now for the shares before the crash even move.


Having declared they have no intention to make an offer, they are prohibited by UK takeover rules from doing so for 6 months.

A lot can happen in that time.
 
jomur
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 5:58 pm

But IAG are Spanish not British... so it would be Spanish rules not UK rules?..
 
TWA85
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Re: IAG Norwegian: my views 9 months on

Fri Jan 25, 2019 7:48 pm

What's the possibility that IAG walking away from NAS, is their way of putting pressure on NAS. By walking away IAG can find out just how desperate NAS is. If NAS asks IAG to come back to the negotiating table then it shows IAG they are becoming desperate. If NAS allows IAG to walk away without asking them to come back, then IAG hasn't lost anything. It's a low risk, high reward action by IAG.
 
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PatrickZ80
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Re: IAG Norwegian: my views 9 months on

Sat Jan 26, 2019 5:12 pm

TWA85 wrote:
What's the possibility that IAG walking away from NAS, is their way of putting pressure on NAS. By walking away IAG can find out just how desperate NAS is. If NAS asks IAG to come back to the negotiating table then it shows IAG they are becoming desperate. If NAS allows IAG to walk away without asking them to come back, then IAG hasn't lost anything. It's a low risk, high reward action by IAG.


But even if they are desperate, before returning to IAG they'd turn to other possible investors first. Delta has been mentioned as a possible buyer, along with Air France-KLM and possibly Virgin Atlantic. Other possibilities are Lufthansa and Ryanair. On the other hand we might see one of the gulf carriers (Etihad, Qatar) invest in Norwegian like they do or did with other European airlines.

Let's say it's Qatar that buys Norwegian. They also own Air Italy, could we possibly see a merger between Norwegian and Air Italy?

One investor I forgot to mention, but might be an option, is Indigo Partners. The parent company of Frontier and Wizzair and known as the most likely buyer of WOW Air. If they can buy WOW Air, can they buy Norwegian as well? Could we perhaps see a merger between Wizzair, WOW Air and Norwegian?
 
Jerry123
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Re: IAG Norwegian: my views 9 months on

Sat Jan 26, 2019 7:27 pm

AAR wrote:
Norwegian has made a brand paid by the shareholders and equity is gone. I received Monday a report on the financials expected on the 4Q and equity will be gone unless they will receive more money from the shareholders or hard core norwegians again. Norwegian has 215 planes in firm order to be delivered before end of 2020.
IAG can risk to be splitted caused by 2 factors, first the need to secure that Iberia, Aer Lingus, Vueling and Level will be owned by someone in EU, if a hard Brexit comes British Airways must renegotiate a new UK - US open skies and here prove they are British and not owned by someone in EU. IAG do not have economical problems but do have problems who owns what in IAG.

Norwegian long haul can earn money maybe 4 months in the year the rest of the year will bring in a deficit... note Norwegian do still have 15 Dreamliners in order. Where should they let them fly
there are speculations in Norway right now they want access to the Russian corridor over Siberia this negotiation was made in the Fall between Russian - Norway, Sweden,Denmark and will remain as it is... I have a report on Norwegian it is very bad.. the bank ABG Sundal Collier said 2 weeks ago the equity is gone in the first Q - I have a report from another bank which cover Norwegian few days old ... the money is gone.

Norwegian need to get bankrupt and after few months time be started again solely in the Nordic countries with around 45 airplanes.

Norwegian made a brand paid by the shareholders... Everyone can make a brand with selling tickets under production price..

Isn't one of those shareholders the Norwegian government oil wealth fund? Which is worth trillions of dollars? If it is i doubt they would let one of Norways biggest airlines go bust.
 
Jerry123
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Re: IAG Norwegian: my views 9 months on

Sat Jan 26, 2019 7:34 pm

PatrickZ80 wrote:
AAR wrote:
SEB Bank has today said a new buyer could be interested Delta Airlines ....


That could be interesting, however as a non-EU airline they'd not be allowed to have a majority share. This could be solved by having the rest of the shares bought by Air France-KLM. Norwegian could then become the long haul LCC that they wanted to have for some time, but never succesfully started. The short haul division of Norwegian could be integrated into Transavia.

If they integrated Norwegian into Transavia i wonder if they would keep the Norwegian name? Also could Norwegian UK be folded into Virgin Atlantic expanding it's presence at Gatwick and giving it more Dreamliners to expand? Interesting times ahead for Norwegian!
 
kiowa
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Re: IAG Norwegian: my views 9 months on

Sat Jan 26, 2019 7:51 pm

Galwayman wrote:
BA was never the best airline anywhere at anytime but it possibly had the best marketing back in the 1980s


sorry Galwayman, the original post said this is "undisputed". :)
 
VZLA787
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Re: IAG Norwegian: my views 9 months on

Tue Jan 29, 2019 4:24 pm

 
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Channex757
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Re: IAG Norwegian: my views 9 months on

Tue Jan 29, 2019 4:50 pm

PatrickZ80 wrote:
TWA85 wrote:
What's the possibility that IAG walking away from NAS, is their way of putting pressure on NAS. By walking away IAG can find out just how desperate NAS is. If NAS asks IAG to come back to the negotiating table then it shows IAG they are becoming desperate. If NAS allows IAG to walk away without asking them to come back, then IAG hasn't lost anything. It's a low risk, high reward action by IAG.


But even if they are desperate, before returning to IAG they'd turn to other possible investors first. Delta has been mentioned as a possible buyer, along with Air France-KLM and possibly Virgin Atlantic. Other possibilities are Lufthansa and Ryanair. On the other hand we might see one of the gulf carriers (Etihad, Qatar) invest in Norwegian like they do or did with other European airlines.

Let's say it's Qatar that buys Norwegian. They also own Air Italy, could we possibly see a merger between Norwegian and Air Italy?

One investor I forgot to mention, but might be an option, is Indigo Partners. The parent company of Frontier and Wizzair and known as the most likely buyer of WOW Air. If they can buy WOW Air, can they buy Norwegian as well? Could we perhaps see a merger between Wizzair, WOW Air and Norwegian?

The above is just guesswork and throwing out names. The truth of the matter looks much less palatable.

Reading between the lines, IAG walked away after what I would assume was some serious due diligence. DY and its group are riddled with toxic debt and desperately trying to raise enough cash to get them through the summer. It also seems like there could be a strong possibility of DY folding around the end of the summer, as longhaul is only one part of the operation and they have a bucket and spade business.

None of the above companies can move with all this debt, which would read across onto their own balance sheets. IAG bought sufficient shares to trigger the Due Diligence process of an agreed offer and has now walked away The financial equivalent of shouting "Hell NO!!!" to the City and Wall Street.

DY may struggle through the summer but Winter 2019-20 will see them off in a declining market heading into recession.
 
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PatrickZ80
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Re: IAG Norwegian: my views 9 months on

Tue Jan 29, 2019 5:18 pm

Channex757 wrote:
The above is just guesswork and throwing out names. The truth of the matter looks much less palatable.


Indeed it was just guesswork at the time, but it doesn't seem too far from the truth. After all, this news article (in Dutch) was released today.

https://www.luchtvaartnieuws.nl/nieuws/ ... -norwegian

It says Lufthansa is looking to buy either Alitalia, Wizzair or Norwegian. Right now their eyes are on Alitalia, but with Air France-KLM and Delta also interested in Alitalia it remains to be seen if they will succeed.

Their next option is Wizzair, but that'll be tough to acquire since Wizzair is profitable and therefor the owners (Indigo Partners) might not be willing to sell. It says Lufthansa is looking envious at the extreme low cost base of Wizzair, something their own LCC, EuroWings, can learn a thing or two from.

Their third option is Norwegian, which seems like an easy prey. Once Norwegian runs out of cash they're forced to sell and Lufthansa will be ready to buy them.
 
reality
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Re: IAG Norwegian: my views 9 months on

Tue Jan 29, 2019 5:33 pm

It does seem likely that someone will buy Norwegian, doesn't it? Rather than just fold into oblivion. They have great planes and good, established routes. Their labor costs are probably lower than most others. Bjorn Kjos has been brilliant in building the airline--though not the bottom line. Hard for me to imagine that it will just disappear. But you never know.
 
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LuxuryTravelled
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Re: IAG Norwegian: my views 9 months on

Tue Jan 29, 2019 5:56 pm

As well as Indigo, I have seen a Norwegian analyst also mention David Neeleman and Qatar as possible suitors, of either the whole business or part thereof.
 
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Channex757
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Re: IAG Norwegian: my views 9 months on

Tue Jan 29, 2019 7:12 pm

Again this is all just Aviation Analyst type guesswork. As it stands, DY is a soup of toxic debt and anyone taking it over will need to assume all that high APR debt or refinance the entire operation.

IAG has seen it from inside and couldn't run away fast enough! Why do you think they are dumping their shares so quickly just as Norwegian stock is due to be diluted?

Taking it over in bankruptcy is another non-starter as all that happens is lessors will snatch back their planes. What is left? Less than nothing. DY is left with a few owned aircraft and a ton of debt way in excess of any asset value.

DY is a dead man walking. Expect it to follow similar operations Air Berlin and Monarch, after the summer season the whole lot collapses. Just because someone else might want to look at the books doesn't mean anything has changed from IAG and their investigations. DY is saturated with unsustainable debt and scrabbling for gas money.
 
LongHaul101
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Re: IAG Norwegian: my views 9 months on

Sat Feb 02, 2019 4:40 pm

Of course the day after I post this IAG offload their shares. :D

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