Originally Posted by
Often1
All a matter of risk tolerance. A recent cash infusion assures operations through March. After that is reading tea leaves unless one has inside information. And even then.
This is a way of saying that there is no person on FT who can tell you what will happen with anything April or later. Brexit, US interest rates, China trade, weather, and volcanic ash, may all combine to keep it afloat or sink it.
Recent cash infusion? Are you referring to leases/renewed leases on aircraft where they claim they got cash from? The problem there is that the leasing company that Norwegian uses is Arctic Aviation Assets. Arctic Aviation Assets is a wholly owned subsidiary of Norwegian Air. No cash injection, just moving money from one pocket to another.
Besides, their hedging losses are enormous for the size of their balance sheet. This is from December's traffic figures with respect to their fuel hedges:
The Group has entered into term contracts and options during the period. By the end of December, the Group estimates a quarter-to-date loss of NOK 1,836 million including losses of NOK 1,989 million related to unrealized hedge positions.
That's USD $233 million in unrealized hedging losses. When those losses are realized (assuming oil prices don't rise), that's enough to cause Norwegian to liquidate. I am waiting until the Q4 earnings call to see how they plan on resolving that shortfall.
According to a Jan 2019 presentation, they're 52% hedged for 1H 2019 and 22% hedged for 2H 2019.