Norwegian Air stability through summer?
Apr 23, 2020, 11:30 am
#631
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Norwegian Air Shuttle CEO writing an open letter on LinkedIn – “we are still fighting like dogs”
“Tuesday April 21 was a dark day in our history and I feel personally really sorry for all the great Red Nose Warriors we have disappointed. It is important for me to underline that we are still fighting like dogs and the extraordinary general meeting on the 4th of May is vital for our FINANCIAL RESTRUCTURE and to get access to the 3bNOK in liquidity from the Norwegian government.
At the same time we are constructing a stronger NEW NORWEGIAN that will continue after Covid-19. With this in place we will fight our way back so we can rehire the majority of our great colleagues that we lost yesterday. At the end it is all about ensuring our customers and Red Nose Warriors that Norwegian will live after Covid-19 and that we can return proudly to the sky as in the picture.”
Jacob Schram
CEO Norwegian
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Explainer: Why Norwegian Air matters to Norway
OSLO (Reuters) - Norwegian Air (NWC.OL), the budget carrier that changed the way people travel across the Atlantic, is fighting for survival as the coronavirus pandemic deepens the company’s financial straits, forcing it to furlough staff and cancel flights.
WHY DOES THE AIRLINE MATTER TO NORWAY?
While governments across the world are trying to shore up national airlines, Norwegian Air is particularly valuable to its home country because of Norway’s vast geography, which stretches more than 2,200 kilometres across fjords and mountains, with few train lines to transport locals and tourists.
Its capital Oslo is closer to Munich than to its own northernmost mainland town, Hammerfest. The journey would take 24 hours by car.
As a result, domestic flights by Norwegian and its rivals Wideroe and SAS (SAS.ST), play a more important role in Norway’s infrastructure than airlines in many other countries.
“Tuesday April 21 was a dark day in our history and I feel personally really sorry for all the great Red Nose Warriors we have disappointed. It is important for me to underline that we are still fighting like dogs and the extraordinary general meeting on the 4th of May is vital for our FINANCIAL RESTRUCTURE and to get access to the 3bNOK in liquidity from the Norwegian government.
At the same time we are constructing a stronger NEW NORWEGIAN that will continue after Covid-19. With this in place we will fight our way back so we can rehire the majority of our great colleagues that we lost yesterday. At the end it is all about ensuring our customers and Red Nose Warriors that Norwegian will live after Covid-19 and that we can return proudly to the sky as in the picture.”
Jacob Schram
CEO Norwegian
-------------------------------------
Explainer: Why Norwegian Air matters to Norway
OSLO (Reuters) - Norwegian Air (NWC.OL), the budget carrier that changed the way people travel across the Atlantic, is fighting for survival as the coronavirus pandemic deepens the company’s financial straits, forcing it to furlough staff and cancel flights.
WHY DOES THE AIRLINE MATTER TO NORWAY?
While governments across the world are trying to shore up national airlines, Norwegian Air is particularly valuable to its home country because of Norway’s vast geography, which stretches more than 2,200 kilometres across fjords and mountains, with few train lines to transport locals and tourists.
Its capital Oslo is closer to Munich than to its own northernmost mainland town, Hammerfest. The journey would take 24 hours by car.
As a result, domestic flights by Norwegian and its rivals Wideroe and SAS (SAS.ST), play a more important role in Norway’s infrastructure than airlines in many other countries.
Apr 23, 2020, 1:29 pm
#632
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Does anyone know whether they are announcing a new business plan at the meeting, or just trying to raise cash?
Apr 23, 2020, 1:55 pm
#633
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Apr 23, 2020, 4:33 pm
#634
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I am not Norwegian, though I can kind of get a feeling for what it would sound like in Norwegian. And I'd say, no it does not carry any better in Norwegian. But I'd yield the floor to someone Norwegian, rather than me being a Dane that have travelled a lot to Norway.
Apr 24, 2020, 10:34 am
#635
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I must say that every time I see a Norwegian airplane, it does not remind me of a red "nose" but rather another appendage of the anatomy. 
(and I will miss seeing them if they go down...)
(and I will miss seeing them if they go down...)
Apr 24, 2020, 10:45 am
#636
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I wonder what Freud would say: "A clear sign of overcompensating the bodily deficiencies by projecting his fantasies onto airplanes, in particular the front of the plane which is aptly named and colored coded for that to which the patient is most anxious about".
Apr 27, 2020, 6:30 am
#637
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Norwegian says aircraft likely to remain grounded until 2021
Richard Milne in Oslo 4 HOURS AGO
Norwegian Air Shuttle has warned that the bulk of its fleet is likely to remain grounded for the next 12 months and that a full recovery would not take place until 2022, laying bare the scale of the crisis engulfing the airline industry.
As part of a planned $1.2bn debt-for-equity swap to try to ensure the low-cost airline’s survival, Norwegian said on Monday that its base case was that its fleet would remain fully grounded until April 2021, apart from the seven aircraft currently flying in Norway.
https://www.ft.com/content/0b04ed8b-...8-f6068b995627
Edit: alternative link: https://thakoni.com/norwegian-warns-...ed-until-2021/
---------------------
Norwegian Air could soon run out of cash unless debt plan approved
Norwegian Air could run out of cash by mid-May unless its proposed financial rescue plan is approved by creditors and shareholders, the budget carrier warned on Monday.
If approved by bondholders, leasing companies and shareholders, the plan may help Norwegian survive the coronavirus outbreak, which has grounded 95 per cent of its fleet, leaving just seven aircraft in operation.
But the planned debt-to-equity swap will hand majority ownership of 53.1 per cent to the company’s lessors, while bondholders would own 41.7 per cent, leaving current shareholders with just 5.2 per cent, it said.
https://www.irishtimes.com/business/...oved-1.4238804
Last edited by WindowSeatFlyer; Apr 27, 2020 at 6:45 am
Apr 27, 2020, 11:13 am
#638
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The source for those news articles is presumably Norwegian Air Shuttle ASA presentation to bondholders.
Apr 27, 2020, 5:12 pm
#640
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The way I read this, the restructuring plan will pass from the bondholders and some of the lessors. This plan is all about getting another 2.7B NOK from the Norwegian gov't.
Those lessors that don't agree will get their planes back - which is fine with Norwegian, as they have too many planes anyway.
Norwegian will essentially go into hibernation for a year except for regional flights. This will allow them to get more of the Norwegian gov't's funding.
The shareholders will pretty much be wiped out and have no say in the matter.
Their plan calls for future widebody and long haul flying. I see neither in Norwegian's future. And Norwegian will not be able to do any future sale/leasebacks at market rates; they will have to pay a significant premium for sale/leasebacks - possibly to the point where it won't be profitable.
Norwegian's future access to funds through bond issuance will be at high junk bond rates.
They may be able to do more stock issuances, as there is a lot of dumb money out there among individuals thinking they'll get rich investing in low priced (penny) stocks.
So my guess is that Norwegian will limp through 2020 existing pretty much only on paper. Beyond that, I don't see them flying to anywhere outside of Europe.
Those lessors that don't agree will get their planes back - which is fine with Norwegian, as they have too many planes anyway.
Norwegian will essentially go into hibernation for a year except for regional flights. This will allow them to get more of the Norwegian gov't's funding.
The shareholders will pretty much be wiped out and have no say in the matter.
Their plan calls for future widebody and long haul flying. I see neither in Norwegian's future. And Norwegian will not be able to do any future sale/leasebacks at market rates; they will have to pay a significant premium for sale/leasebacks - possibly to the point where it won't be profitable.
Norwegian's future access to funds through bond issuance will be at high junk bond rates.
They may be able to do more stock issuances, as there is a lot of dumb money out there among individuals thinking they'll get rich investing in low priced (penny) stocks.
So my guess is that Norwegian will limp through 2020 existing pretty much only on paper. Beyond that, I don't see them flying to anywhere outside of Europe.
Apr 27, 2020, 7:00 pm
#641
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The way I read this, the restructuring plan will pass from the bondholders and some of the lessors. This plan is all about getting another 2.7B NOK from the Norwegian gov't.
Those lessors that don't agree will get their planes back - which is fine with Norwegian, as they have too many planes anyway.
Norwegian will essentially go into hibernation for a year except for regional flights. This will allow them to get more of the Norwegian gov't's funding.
The shareholders will pretty much be wiped out and have no say in the matter.
Their plan calls for future widebody and long haul flying. I see neither in Norwegian's future. And Norwegian will not be able to do any future sale/leasebacks at market rates; they will have to pay a significant premium for sale/leasebacks - possibly to the point where it won't be profitable.
Norwegian's future access to funds through bond issuance will be at high junk bond rates.
They may be able to do more stock issuances, as there is a lot of dumb money out there among individuals thinking they'll get rich investing in low priced (penny) stocks.
So my guess is that Norwegian will limp through 2020 existing pretty much only on paper. Beyond that, I don't see them flying to anywhere outside of Europe.
Those lessors that don't agree will get their planes back - which is fine with Norwegian, as they have too many planes anyway.
Norwegian will essentially go into hibernation for a year except for regional flights. This will allow them to get more of the Norwegian gov't's funding.
The shareholders will pretty much be wiped out and have no say in the matter.
Their plan calls for future widebody and long haul flying. I see neither in Norwegian's future. And Norwegian will not be able to do any future sale/leasebacks at market rates; they will have to pay a significant premium for sale/leasebacks - possibly to the point where it won't be profitable.
Norwegian's future access to funds through bond issuance will be at high junk bond rates.
They may be able to do more stock issuances, as there is a lot of dumb money out there among individuals thinking they'll get rich investing in low priced (penny) stocks.
So my guess is that Norwegian will limp through 2020 existing pretty much only on paper. Beyond that, I don't see them flying to anywhere outside of Europe.
Apr 28, 2020, 2:29 am
#642
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To keep all those aircraft on the ground for a year is also a substantial cost just from a MRO perspective. Some maintainance still needs to be done, at one point even the Boeing Gold package people will ask for cash to cover that ... I doubt NAS has that cash.
Apr 28, 2020, 2:50 am
#643
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But Norwegian Air doesn't want all of its current aircraft and is likely planning on lessors taking back a large number of those planes. This will make it much easier for Norwegian Air to downsize.
Of course with the way this plan is structured, Norwegian is doing financial scorched earth, burning the stockholders, the bondholders, the lessors, the employees, and anyone who has extended credit to Norwegian (they currently aren't paying their bills). I can't see anyone wanting to do business with Norwegian in the future without being paid up front or charging loanshark rates for borrowing money.
Apr 28, 2020, 11:23 am
#644
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Apr 28, 2020, 11:55 am
#645
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You can ask the lessors what is the best option, get zero income on their assets for the next year, and leave the control of the assets to Norwegian. Or potentially have no income on their assets for the next year but get control over the assets back from Norwegian? I would say the second options sounds better. The long haul flying of Norwegian is probably dead, but there may be companies wanting to try to fill some of the gap left by Norwegian in the Scandinavian/Nordic/European market.
I know that if I were a supplier to Norwegian, I'd never extend them credit again. Ever. And I'd charge them higher rates, even with advance payment.