Norwegian to fly between UK, Ireland and U.S. NE Coast cities. from Summer 2017.
#316
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Here's an interesting, detailed piece on Norwegian's situation. You may have to register (any email will do) to read it.
https://www.thetimes.co.uk/article/h...ying-kvl5jmttz
https://www.thetimes.co.uk/article/h...ying-kvl5jmttz
#317
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Here's an interesting, detailed piece on Norwegian's situation. You may have to register (any email will do) to read it.
https://www.thetimes.co.uk/article/h...ying-kvl5jmttz
https://www.thetimes.co.uk/article/h...ying-kvl5jmttz
With the one of the last paragraphs
“It’s either all a cunning plan and they are being bold and opportunistic, or they waded in without thinking it through and they’ve got this burden of aircraft orders and they’ve got to find ways out of it.”
I had an image of Baldrick standing next to Blackadder, "My Lord, I have a cunning plan"
#319
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Yup, it's increasingly likely that some passengers will be left "holding the bag" when Norwegian shutters some or all of its operations. That said, I'm not sure folks should book away. Yes, it would be dumb to book beyond summer on Norwegian now. But before then, it's significantly more probable than not that they will be flying. You do still risk irregular ops, and Norwegian has plenty of those, but the company should be in business.
It's all a question of risk v. reward. In the USA, I fly Frontier a few times a year. My average Frontier fare is about $20. It usually works fine. But not always. Like they stranded me in New Orleans last December because, unlike the other airlines flying there, they didn't bother to stock any de-icing fluid, so when there was a little ice, they shut down operations. I had to buy an award ticket on UA to get home (as a 1K, I fortunately didn't have to pay a last minute ticketing charge for the award ticket). So it was a much more expensive trip than I anticipated. Still, it was a much better option than most pax on their cancelled flights that day had. But you have to be willing to live with the risk. If you can tolerate the risk, I'd go for the Norwegian ticket this summer IF it was significantly cheaper than the alternatives.
It's all a question of risk v. reward. In the USA, I fly Frontier a few times a year. My average Frontier fare is about $20. It usually works fine. But not always. Like they stranded me in New Orleans last December because, unlike the other airlines flying there, they didn't bother to stock any de-icing fluid, so when there was a little ice, they shut down operations. I had to buy an award ticket on UA to get home (as a 1K, I fortunately didn't have to pay a last minute ticketing charge for the award ticket). So it was a much more expensive trip than I anticipated. Still, it was a much better option than most pax on their cancelled flights that day had. But you have to be willing to live with the risk. If you can tolerate the risk, I'd go for the Norwegian ticket this summer IF it was significantly cheaper than the alternatives.
Norwegian was 570M NOK ($71M USD) equity away from breaching bond covenants and between increased fuel costs and asset fire sales, I could see Norwegian burning through that small equity cushion by the end of this quarter. If you look at the routes that Norwegian is flying, you'll notice that there's been a lot of recently added competition on those routes which is driving down ticket prices so I don't see Norwegian as being able to achieve positive margins this quarter.
#321
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In a desperate attempt to remain solvent, Air Berlin sold and leased back all of their aircraft, but that wasn’t enough to save the company. Nor was their strategy to increase the number of routes to the United States successful.
Norwegian is currently doing what Air Berlin tried just a few years ago. Do you think they will have better luck with that strategy?
Last edited by DoTheBartMan; Apr 30, 2018 at 11:15 pm
#322
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I will say that IAG's reputation is on the line when they buy a share that actually gives them influence. Most people will not see Norwegian as being part of IAG. Heck most people don't really know what IAG is.
#323
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Ethiad didn't buy AB as an LCC, but as an opportunity to own a EU full service carrier. What killed AB was mainly EY trying to transform its charter business into full service legacy style.
#324
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As far as Norwegian's customers, I doubt that many are aware of Norwegian's very shaky financial position. And since very few people read these posts, I seriously doubt that any comments here will have any impact on Norwegian's bookings. For me, this is purely an academic discussion of an airline's finances. I wouldn't short the stock because it's too volatile and I can't sell naked calls nor buy puts on the stock because there is no options market in this stock.
When Norwegian closes its doors, it will be sudden and unexpected. At this point, I expect the equity requirements of the bond covenants to trigger Norwegian's shutdown because it ties Norwegian's hands on their asset sales ... if assets are priced significantly higher on Norwegian's books than what they can sell them for, any sales are going to result in reduced equity. And because Norwegian's financial problems are so well known within the industry, I doubt that they're getting full market value for their asset sales.
Norwegian can do a large secondary stock offering to raise equity, but they've just finished two tranches of private placement equity offerings. And a company can only do equity dilutions a finite number of times before their stock value plummets.
#325
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I also suspect that most travelers would be surprised if Norwegian shuts down. They have received far more "happy talk" media coverage than stories describing their perilous business strategy and troubling balance sheet. I would think that 95%+ of their customers have no idea what's going on. If they suddenly go belly up, it's going to be a mess -- especially if it happens during peak season.
#326
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I also suspect that most travelers would be surprised if Norwegian shuts down. They have received far more "happy talk" media coverage than stories describing their perilous business strategy and troubling balance sheet. I would think that 95%+ of their customers have no idea what's going on. If they suddenly go belly up, it's going to be a mess -- especially if it happens during peak season.
One would think that Norwegian could make it through the peak summer season, but if you go on a travel aggregator website, you can see that there are multiple airlines that are matching Norwegian right now. And for the truly cheap traveler, WoW Air can beat Norwegian's price as long as you don't mind a stop in Iceland. Add in the rising fuel prices and I think it's now a crap shoot as to the day that Norwegian closes its doors.
#327
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Yes think Norwegian will be around much longer than number of legacy carriers who are losing business to LCCs, who continue to grow. Recession means people will look for cheaper everything inc. airfares & legacies can't afford to sell a lot of seats at LCC prices or they'll go under fast. Their costs are just too high.
#328
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Yes think Norwegian will be around much longer than number of legacy carriers who are losing business to LCCs, who continue to grow. Recession means people will look for cheaper everything inc. airfares & legacies can't afford to sell a lot of seats at LCC prices or they'll go under fast. Their costs are just too high.
Norwegian's behaving more financially reckless than Johnny
It's not that other airline costs are too high; it's that Norwegian is pricing their tickets well below breakeven. The fuel costs alone are more than most are paying for tickets on Norwegian. Their prices are unsustainable and create unrealistic expectations in some consumers as to a reasonable airline ticket price.
As far as IAG's stock position in Norwegian, they are effectively taking away Norwegian's ability to do a secondary stock offering to raise equity. Why? Because as soon as Norwegian announces a secondary offering and prices it, all IAG needs to do is dump their shares and announce they're no longer interested in Norwegian. That would kill Norwegian's stock price and severely dampen interest in purchasing shares of the secondary offering.
#329
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plenty of LCCs & ULCCs are making money. Many people have realised you don't need 46kgs(100lbs) of checked luggage & if you don't why pay for it. Many other don't care where they sit & realistically, if you drink alcohol on a flight, you're going to arrive feeling very average. Even though airlines on international flights get booze duty free, it still costs & many problems on flights are caused by drunk passengers.
+ got this overnight
Norwegian adding more flights LGW/JFK - NOW UP TO 3/DAY
with prices starting at 155 pounds one way.
http://www.travelmole.com/news_feature.php?c=setreg®ion=2&m_id=s~Y!m_r_rn &w_id=34551&news_id=2032144
+ got this overnight
Norwegian adding more flights LGW/JFK - NOW UP TO 3/DAY
with prices starting at 155 pounds one way.
http://www.travelmole.com/news_feature.php?c=setreg®ion=2&m_id=s~Y!m_r_rn &w_id=34551&news_id=2032144
Last edited by southpac; May 2, 2018 at 7:03 pm
#330
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plenty of LCCs & ULCCs are making money. Many people have realised you don't need 46kgs(100lbs) of checked luggage & if you don't why pay for it. Many other don't care where they sit & realistically, if you drink alcohol on a flight, you're going to arrive feeling very average. Even though airlines on international flights get booze duty free, it still costs & many problems on flights are caused by drunk passengers.
+ got this overnight
Norwegian adding more flights LGW/JFK - NOW UP TO 3/DAY
with prices starting at 155 pounds one way.
Norwegian to add more flights to New York
+ got this overnight
Norwegian adding more flights LGW/JFK - NOW UP TO 3/DAY
with prices starting at 155 pounds one way.
Norwegian to add more flights to New York
When Monarch, a British LCC, went out of business last year, they left more than 100,000 passengers stranded abroad.
As far as 155 pounds one way, that is less than Norwegian's fuel costs.