Why Doesn't Ryanair Buy Norwegian?

f4f3a · Sat Apr 16, 2016 10:35 am

I was thinking that these two carriers would compliment each other quite well. Ryanair is very cash rich and
The acquisition would give them access to new markets not to mention Norwegians expanding long haul operation. I think
The result would be a real worry to the legacy carriers as the combined operation would be a formidable force.

richardw · Sat Apr 16, 2016 10:48 am

Other carriers should just be worried about ryanair's current growth as it is.

mjoelnir · Sat Apr 16, 2016 10:52 am

I would assume the main point being, that Norwegian is not for sale.

Mortyman · Sat Apr 16, 2016 10:57 am

Norwegian is not for sale and the ceo has'nt really been that very interested so far in buying or partnering with other airlines either. They want to run their own show.

and no Ryanair and Norwegian is not the same ...

Ryanair and Easyjet however would be a better match in terms of service.

Richard28 · Sat Apr 16, 2016 11:26 am

Quoting Mortyman (Reply 3):
Ryanair and Easyjet however would be a better match in terms of service.

I can't comment on Norwegian as have not flown them, but easyJet are much better in terms of service than Ryanair - although Ryanair are starting to improve...

Ryanair and Norwegian would make some sense, from a fleet perspective and route structure, would seem quite complimentary.. but if they are not for sale then there we go..!

f4f3a · Sat Apr 16, 2016 12:34 pm

Even if Norwegian are not for sale now I can definitely see in the future these two carriers coming together . I believe Norwegians biggest shareholder is the CEO so he would be unlikely to sell. However Norwegian do have a large debt so when times get difficult he might be forced to sell.

[email protected] · Sat Apr 16, 2016 12:41 pm

Reminds me of: http://www.irishtimes.com/business/t...partnership-with-ryanair-1.2502313

But this might come to nothing if FR's trial of online connections aren't adequately successful.

b747400erf · Sat Apr 16, 2016 12:52 pm

Quoting Mortyman (Reply 3):

and no Ryanair and Norwegian is not the same ...

No one said that. Compliment each other is a different phrase than the same. And FR has always looked to expand into long haul.

Q · Sat Apr 16, 2016 1:09 pm

No more merger please!!!!

Q

hOMSaR · Sat Apr 16, 2016 2:20 pm

Quoting B747400ERF (Reply 7):
Compliment each other is a different phrase than the same.

Quite different, indeed. Compliment each other means they say nice things about each other. Of course, I can't think of when FR has said anything nice about another airline, so I'm confused why that would be relevant.

Complement, on the other hand...

B777LRF · Sat Apr 16, 2016 3:07 pm

DY has seating, WIFI, flies to main airports and it's employees are hired by the airline, have paid vacations and sick days, don't pay for their own uniform, badge and training.

They have about as much in common as a VW and a Wartburg.

Besides, why would Björn Kjos sell? Unlike MoL he actually likes aviation!

Navigator · Sat Apr 16, 2016 3:56 pm

Quoting f4f3a (Thread starter):
I was thinking that these two carriers would compliment each other quite well. Ryanair is very cash rich and
The acquisition would give them access to new markets not to mention Norwegians expanding long haul operation. I think
The result would be a real worry to the legacy carriers as the combined operation would be a formidable force.

They dont have much in common if you look closely. Ryanair has no longhaul and flies mainly from secondary airports. Norwegian does the exact opposite. They also have very different service levels. Looking at this you certainly cannot merge the two.

And besides this norwegian national pride would forbid Ryanair coming anywhere close to Norwegian since it is regarded as a national treasure.

And by the way Norwegian is not for sale!!

[Edited 2016-04-16 08:57:20]

Navigator · Sat Apr 16, 2016 4:00 pm

Quoting Richard28 (Reply 4):
I can't comment on Norwegian as have not flown them, but easyJet are much better in terms of service than Ryanair - although Ryanair are starting to improve...

The difference between Ryanair and Norwegian is like night and day. I have been passenger many times on both and servicewise they are in different leagues. Norwegian being far far ahead!!

[email protected] · Sat Apr 16, 2016 4:04 pm

Quoting Navigator (Reply 12):
The difference between Ryanair and Norwegian is like night and day.

Yep: FR makes all the money and DY doesn't.

b747400erf · Sat Apr 16, 2016 4:05 pm

Quoting homsar (Reply 9):

Quite different, indeed. Compliment each other means they say nice things about each other. Of course, I can't think of when FR has said anything nice about another airline, so I'm confused why that would be relevant.

Complement, on the other hand...

You win this month's semantics award.

Navigator · Sat Apr 16, 2016 6:57 pm

Quoting [email protected] (Reply 13):
Yep: FR makes all the money and DY doesn't.

You are right but Ryanair has no norwegian oil money in a steady pour...

Mortyman · Sat Apr 16, 2016 7:20 pm

Quoting Navigator (Reply 15):
You are right but Ryanair has no norwegian oil money in a steady pour...

What has Norway's oil money to do with it ?

[Edited 2016-04-16 12:25:04]

AirPacific747 · Sat Apr 16, 2016 7:23 pm

Norwegian service definitely much better than Ryanair. I can't stand that ghastly yellow color that Ryanair uses everywhere.

[email protected] · Sat Apr 16, 2016 7:29 pm

Quoting AirPacific747 (Reply 17):
I can't stand that ghastly yellow color that Ryanair uses everywhere.

That's on the way out: http://www.dailymail.co.uk/travel/tr...nterior-new-Boeing-737-planes.html

Navigator · Sat Apr 16, 2016 7:39 pm

Quoting Mortyman (Reply 16):
You are right but Ryanair has no norwegian oil money in a steady pour...

What has Norway's oil money to do with it ?

You tell me

Where does all that money come from? Norwegian never makes a genuine profit. I doubt Kjos has all that money in his own

The norwegian financiak market is inflated by previous oil profits affecting wealth in the whole society...

[Edited 2016-04-16 12:41:18]

f4f3a · Sat Apr 16, 2016 7:44 pm

In terms of employment practice they operate similar practices. Fr. you work through agencies or self employed. Dy there are 4 separate companies with mostly short term or rolling contracts . Attitude towards staff are similar with both CEOs having been derogatory about their own staff in the past. This though is a different issue.

Ryanair used to focus on secondary airports but is changing their policy towards more primary ones . The onboard experience is also supposed to be being improved, I haven't been on either for a while but agree that in the past fr wasn't the nicest experience I have ever had. Norwegian was more like being on easyjet.
The fact is that the market seems to be changing with passengers expecting more of a service and the lcc are needing to become better to meet this demand. The problem though is that they don't necessarily want to pay for it either which makes life difficult for legacys.

At the moment this demand is being met by a recovering economy and cheap oil which means there is lots of competition which is good. As the oil price starts to climb again and conditions become more tricky for airlines, I expect there to be consolidation. Combining these two operaters would be mutually beneficial.

AirPacific747 · Sat Apr 16, 2016 8:09 pm

Quoting [email protected] (Reply 18):
That's on the way out: http://www.dailymail.co.uk/travel/tr...nterior-new-Boeing-737-planes.html

A small step in the right direction

B777LRF · Sat Apr 16, 2016 8:40 pm

Quoting Navigator (Reply 15):
You are right but Ryanair has no norwegian oil money in a steady pour...

Quoting Navigator (Reply 19):
You tell me Where does all that money come from? Norwegian never makes a genuine profit. I doubt Kjos has all that money in his own The norwegian financiak market is inflated by previous oil profits affecting wealth in the whole society...

History, it's a b1tch but it's the only way to learn. Norwegian didn't just spring into existence 5 years ago with a mega order for 737s and 787s. BK bought a small airline in 1993, operating F-50s. In 2002 SAS wants out of certain parts of the domestic Norwegian market, and hands the small airline around 20M NOK to run the same loss-making schedule with their F-50s for a few years. Except, that wasn't what BK used the money to do. He bought a couple of 737s instead and started more profitable, domestic, routes. Making a profit doing so. In 2003 they went public, and that's where the money comes from. So was the lady in waiting at the birth of Norwegian? SAS Norway was.

They posted a NOK 73M loss in '02, a 60M loss in '03 and another 152M loss in '04. In '05 they posted a profit of 39M, lost 32M in '06 and made a profit of 132M in '07. From '07 until '14 they have been consistently profitable, but lost almost a billion in '14. In '15 they very profitable again, to the tune of a quarter billion, and are expecting to be more, much more, profitable this year. Over they years they have made considerably more money than they've lost which, in turn, has made Björn Kjos a very rich man indeed.

Where are they getting their money from? From people like you and me, taking them up on their offer of a quality low-cost flight, to and from a centrally located airport, onboard a brand new aircraft offering free WiFi.

Mortyman · Sat Apr 16, 2016 8:41 pm

Quoting Navigator (Reply 19):
You tell me Where does all that money come from? Norwegian never makes a genuine profit. I doubt Kjos has all that money in his own The norwegian financiak market is inflated by previous oil profits affecting wealth in the whole society...

If it's the aircraft purchases you are wondering about, it's a well known that it's through the import / export banks in the US and EU .... and I think you already know that.

[Edited 2016-04-16 13:42:04]

Thunderboltdrgn · Sat Apr 16, 2016 9:05 pm

Even if FR wanted to buy DY andv DY was for sale, would the EU authorities approve it?

Planeflyer · Sun Apr 17, 2016 4:32 am

Pretty clear that very few of FR's extensive customer list are on a net. far. FR is doing a lot right. Buyin dy would not be a good move.

BestWestern · Sun Apr 17, 2016 4:43 am

In all honesty, someone like DL should buy 49% of Norwegian and get lowest costs across the Atlantic. Hardly much of a difference service wise. This could easily replace the higher cost AMS hub.

Quoting B747400ERF (Reply 7):
FR has always looked to expand into long haul.

Board have said no

Quoting B777LRF (Reply 10):
DY has seating

So does FR.

Quoting Planeflyer (Reply 25):
FR is doing a lot right.

Very profitable, fast growth, happy passengers.

[email protected] · Sun Apr 17, 2016 7:12 am

Quoting BestWestern (Reply 26):
happy passengers

Increasingly happy, given their seemingly excellently received AGB.

trent1000 · Sun Apr 17, 2016 7:43 am

How about Icelandair buys Norwegian??

I know that FI are doing well and expanding on their own, but just an idea...

mjoelnir · Sun Apr 17, 2016 8:49 am

Quoting trent1000 (Reply 28):
How about Icelandair buys Norwegian??

I know that FI are doing well and expanding on their own, but just an idea...

Icelandair would be a good example for a small airline earning money without the need to merge, be sold or buy another airline.
Net earnings 109.4 million USD, cash 194.6 million USD, equity ratio 47%, return on equity 23.97%, net profit in percentage of revenue 9,6 %, earnings per share 2.24 are the numbers for 2015.

parapente · Sun Apr 17, 2016 8:57 am

2thungs that have happened at approx the same time is Norwegian,s TATL services to the 3 key places in the US along with Easyjets European expansion out of Gatwick into Europe.Even though these 2 low cost airlines are not connected I would have thought that they will have mutually benefited by each other's services/routes.

Kiwirob · Sun Apr 17, 2016 12:10 pm

Quoting B777LRF (Reply 22):
They posted a NOK 73M loss in '02, a 60M loss in '03 and another 152M loss in '04. In '05 they posted a profit of 39M, lost 32M in '06 and made a profit of 132M in '07. From '07 until '14 they have been consistently profitable, but lost almost a billion in '14. In '15 they very profitable again, to the tune of a quarter billion, and are expecting to be more, much more, profitable this year. Over they years they have made considerably more money than they've lost which, in turn, has made Björn Kjos a very rich man indeed.

All those Millions are NOKs which are worth stuff all today, it's not like the company was making hundreds of millions of EUR in profit.

liffy1a · Sun Apr 17, 2016 1:17 pm

Quoting B777LRF (Reply 10):
DY has seating, WIFI, flies to main airports and it's employees are hired by the airline, have paid vacations and sick days, don't pay for their own uniform, badge and training.

Ryanair also have seats. Ryanair mostly do fly to primary airports with the exception of a few, they serve about 190 airports most of which are the primary airport serving that city or town. The employment practices of both are similar, Ryanair staff also have paid vacations and sick days, contractors don't, the same applies to Norwegian.

[email protected] · Sun Apr 17, 2016 2:04 pm

Quoting liffy1a (Reply 32):
Ryanair also have seats

Their assigned seating can make boarding seem excruciatingly slow, as last Wed when I flew them BCN-EMA. Still, most seem to like it as it's value-added and with the option of selecting your preferred seat for a fee, again value-driven and experience-enhancing.

And as for carry-on luggage, it did amuse, in a sad way, that a lady seated in row 1 had to put her roll-on in row 16 due to no available overhead space.

teahan · Mon Apr 18, 2016 8:28 am

Quoting [email protected] (Reply 33):
Their assigned seating can make boarding seem excruciatingly slow, as last Wed when I flew them BCN-EMA. Still, most seem to like it as it's value-added and with the option of selecting your preferred seat for a fee, again value-driven and experience-enhancing.

The problem is the use of jet bridges in BCN, which makes it all the more excruciating. FR should find a way to make boarding at BCN and other Spanish airports a bit more efficient.

Andy33 · Mon Apr 18, 2016 8:59 am

Quoting B777LRF (Reply 10):
DY has seating

I think all passenger airlines have seating!
If you mean assigned seating, so does Ryanair. Like many lowcost airlines around the world, they started off copying WN with self-selection of seats when boarding. However it became clear that in Europe at least passengers strongly prefer allocated seats, and once their competitors started gaining ground because they had always used, or switched to, assigned seating, so did Ryanair, in 2014.

eurowings · Mon Apr 18, 2016 9:54 am

Ryanair isn't so far removed from Norwegian after two years of the three year improvement programme. In terms of the product, it always has been the little things with Norwegian; their fairly high spec. 738s (Sky Interior, seat pockets, drop down screens, Wi-Fi), lack of additional charges for basic services (e.g. airport check-in) and a clean and simple booking interface. I was very pleased when Norwegian entered into competition with Ryanair on a 4h sector I fly regularly, you do start to appreciate these things on a longer flight, especially if the fare difference is minimal.

aviationaware · Mon Apr 18, 2016 12:17 pm

One of the main advantages of Ryanair is the simplicity of their business model, hence requiring very little overhead.

An acqusition of Norwegian would change that overnight, it would add an entire airline with a noticably different business model and exploding costs, a leasing business with a three digit backlog, a money bleeding long haul operation...

Also, looking at the two companies' balance sheets, much smaller Norwegian has huge amounts of net debt at 2.1bn€ or 62% of assets while Ryanair is virtually debt free in airline terms at 3.7bn€ or 32.5% of assets.

Norwegian is not an attractive partner for Ryanair at all - different strategy, mortgaged balance sheet.

bjorn14 · Mon Apr 18, 2016 12:26 pm

The screaming & cursing matches between O'Leary and Kjøs would be of such epic porportions that it would make a drunken sailor blush. MO'L would have to learn to be nimble on his feet to avoid the thrown chairs too.

Mortyman · Mon Apr 18, 2016 1:02 pm

Quoting aviationaware (Reply 37):
a money bleeding long haul operation...

Apparently Norwegian is making money off the long haul service

PavlovsDog · Mon Apr 18, 2016 8:06 pm

Norwegian is really popular with business travelers and corporate accounts. I can't even book Ryanair through our corporate booking system.

The airlines have radically different cultures and business models as well.

Norwegian has a very positive culture and gives customers free things like wi-fi. Norwegian has always been very strong at digital platforms and view it as a competitive advantage. Aircraft are stylish. Connections are a big part of their business. Their employees seem to really enjoy working for them and turnover is moderate.

Ryanair has an autocratic culture, charges for anything they can, and has low employee morale and high turnover. They are viewed as having a contemptuous relationship with their employees, customers and governments. Their digital platforms are not a strength and are perceived by many as just being a way to lure customers to pay substantially more than they originally expected to. Aircraft are basic and are highly focused on incremental sales. They consistently rank at the bottom of customer satisfaction and brand perception survey's although their recent focus on righting this seems to be paying off. Ryanair is also a pure point to point airline.

If Ryanair bought Norwegian they would either have to run a parallel operation or kill everything Norwegian is in order to integrate it. In that process they would lose a large portion of their customer base, me among them.

N1120A · Tue Apr 19, 2016 1:32 am

Quoting PavlovsDog (Reply 40):

Uh, Norwegian broke the law by trying to charge a thirsty flyer for water.

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