Originally Posted by
iahphx
The cooling of speculation in the oil market is almost certain to help Norwegian get through the summer and, I suspect, the fall. Fuel is a huge expense for them, and a 15 cent decline in jet fuel prices (which we've seen in the past week) is a big deal for a struggling transatlantic airline. I also suspect the huge demand for summer transatlantic travel will result in more "spillage," as budget conscious consumers will balk at sky-high "last minute" fares from the "full service" carriers.
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Actually, lower oil prices might end up shutting them down quickly, as Norwegian is overhedged. Let's wait until we see how much they're carrying in unrealized hedging losses in the May traffic figures report which will be released in the next couple of weeks. Anything over a billion NOK in unrealized losses and they'll likely have blown through their minimum capitalization covenants.
In addition, Norwegian has been running nearly nonstop fare sales through the summer. This indicates to me that they are running very low on cash and are struggling to just meet payroll.
Someone's been selling the stock aggressively in the last few weeks.