Originally Posted by
iflyjetz
Wow. That was a very bloody quarter. Q4 2018 losses were ~35% higher than Q4 2017 - not a good trend. Cash/equivalents less than half of Q4 2017; definitely not enough to get through Q1 without breaching covenants.
If this rights issue doesn't go well (and I didn't like the statement about it in the slide deck),. Norwegian will be out of business in short order.
I missed the conference call (waiting for it to be posted on Norwegian's website) but the stock is sliding in trading which bodes poorly for the rights issuance. Bloomberg's quote (NAS:NO) indicates that the stock is above a 52 week low, but I don't see it. I expanded out the chart and it appears to be at, as a minimum, a 5 year low. More likely it's at an all time low. Issuing stock rights at this point is a huge share dilution.
In addition, the airline is now shrinking (deferred 2019 aircraft orders along with trying to get an Asian partner to take delivery of a lot of future deliveries and selling aircraft) which will increase their cost per seat mile.
This is what the end of a death spiral looks like in the airline industry. Caveat emptor.
I wouldn't say this is the end of a death spiral in the airline industry. But some may say that it's rather telling that Norwegian pilots are prime recruiting targets for airlines facing pilot shortages for even some equipment already in hand.