Go Back  FlyerTalk Forums > Miles&Points > Airlines and Mileage Programs > Other European Airlines
Reload this Page >

Norwegian Air stability through summer?

Norwegian Air stability through summer?

Reply

Old Feb 14, 19, 10:01 am
  #61  
 
Join Date: Dec 2013
Posts: 5
You are worrying about a week from now? I have Tampa to London May 29th and Rome to Newark June 7th. I'm giving myself a 60% chance of those flights ever happening....
fox13weather is offline  
Reply With Quote
Old Feb 14, 19, 10:10 am
  #62  
 
Join Date: Sep 2004
Location: YUL
Programs: BAEC, Priority Club, Fairmont Presidents Club
Posts: 469
Originally Posted by fox13weather View Post
You are worrying about a week from now? I have Tampa to London May 29th and Rome to Newark June 7th. I'm giving myself a 60% chance of those flights ever happening....

Didn't say I was worrying, but I am 100% aware of what could happen, and what will inevitably happen. Insure yourself well, and have a plan B in case you get stranded abroad. I have been due to both Icelandic volcanoes, that taught me to be way more proactive when things go wrong.
Bogwoppit is offline  
Reply With Quote
Old Feb 14, 19, 5:00 pm
  #63  
Original Poster
 
Join Date: Jan 2013
Posts: 28
Any updates from the Q4 earnings call today?
Daedalus7 is offline  
Reply With Quote
Old Feb 14, 19, 6:32 pm
  #64  
FlyerTalk Evangelist
 
Join Date: Mar 2000
Posts: 15,654
Originally Posted by MSPeconomist View Post
Never? Generations of students flew Icelandic to LUX for their European adventures. I don't know how you qualify success, but this LCC seemed to last for a long time, although I guess we can quibble about whether it was a charter operation.
Well, they don't exist anymore. It was certainly a different era, though. There are many smart low fare airlines that don't think the model will work so they don't try. I'd personally equate this to the Airbus A380. Boeing always said it would be a financial disaster, but there were people who thought differently. Boeing was right. I'm virtually certain the naysayers on Norwegian will be right, too.

Originally Posted by fox13weather View Post
You are worrying about a week from now? I have Tampa to London May 29th and Rome to Newark June 7th. I'm giving myself a 60% chance of those flights ever happening....
No guarantees, but I like your odds for June. Not that I'd buy a ticket (well, maybe for $99) but I like your odds. It's beyond summer when I'd have more worries. FWIW, I flew Air Berlin transatlantic about 2 months before they went belly up. The flight was fine. And then they were gone. It will likely be the same.
iahphx is offline  
Reply With Quote
Old Feb 14, 19, 7:51 pm
  #65  
 
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,006
Originally Posted by Daedalus7 View Post
Any updates from the Q4 earnings call today?
It was released on Feb 7.
Report: https://www.norwegian.com/globalasse...018-report.pdf

Slide deck presentation: https://www.norwegian.com/globalasse...esentation.pdf

Q4 Earnings Call video: https://video.qbrick.com/play2/embed...&sharing=false

You can find these on the Norwegian Air website under Investor Relations then 2018 reports and presentations
iflyjetz is offline  
Reply With Quote
Old Feb 14, 19, 10:51 pm
  #66  
 
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,006
Originally Posted by iahphx View Post
No guarantees, but I like your odds for June. Not that I'd buy a ticket (well, maybe for $99) but I like your odds. It's beyond summer when I'd have more worries. FWIW, I flew Air Berlin transatlantic about 2 months before they went belly up. The flight was fine. And then they were gone. It will likely be the same.
The stock has dropped ~20% since the earnings call. Norwegian needs a successful $300 million secondary stock offering in order to meet bond covenants.
If the secondary offering goes poorly, they could violate bond covenants on March 31st. That should trigger liquidation. If they're able to get past that hurdle, they're likely good for the summer.
Bogwoppit likes this.
iflyjetz is offline  
Reply With Quote
Old Feb 15, 19, 12:07 am
  #67  
Original Poster
 
Join Date: Jan 2013
Posts: 28
Originally Posted by iflyjetz View Post
The stock has dropped ~20% since the earnings call. Norwegian needs a successful $300 million secondary stock offering in order to meet bond covenants.
If the secondary offering goes poorly, they could violate bond covenants on March 31st. That should trigger liquidation. If they're able to get past that hurdle, they're likely good for the summer.
Any thoughts on when we might know if the secondary offering is met?
Daedalus7 is offline  
Reply With Quote
Old Feb 15, 19, 6:27 am
  #68  
Original Poster
 
Join Date: Jan 2013
Posts: 28
https://www.usatoday.com/story/trave...er/2873389002/

Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Daedalus7 is offline  
Reply With Quote
Old Feb 15, 19, 9:04 am
  #69  
 
Join Date: Jun 2018
Posts: 525
Originally Posted by Daedalus7 View Post
https://www.usatoday.com/story/trave...er/2873389002/

Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
"Pride goeth before destruction, and an haughty spirit before a fall" - Proverbs 16:18
GFrye is online now  
Reply With Quote
Old Feb 15, 19, 9:13 am
  #70  
A FlyerTalk Posting Legend
 
Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 40,683
Originally Posted by Daedalus7 View Post
https://www.usatoday.com/story/trave...er/2873389002/

Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Or it is an act of desperation. How many shares did you purchase on the secondary offering?
Often1 is offline  
Reply With Quote
Old Feb 15, 19, 11:51 am
  #71  
 
Join Date: Oct 2018
Location: SFO
Programs: UA
Posts: 99
Originally Posted by Daedalus7 View Post
https://www.usatoday.com/story/trave...er/2873389002/

Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
I imagine Delta will put up some stiff competition on ATH and BCN. I imagine yields will be depressed for both parties, but Delta can afford it.
bman1002 is offline  
Reply With Quote
Old Feb 15, 19, 2:44 pm
  #72  
 
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,006
Originally Posted by Daedalus7 View Post
Any thoughts on when we might know if the secondary offering is met?
March 31 is the key upcoming financial date for Norwegian; it's the date I've seen mentioned with respect to bond covenants.

As far as the secondary offering, page 22 of the Q4 presentation has the details, here: https://www.norwegian.com/globalasse...esentation.pdf

Here's a few bullet points from page 22:
Key dates:
Key terms of the rights issue to be set: On or about 18 February 2019
EGM: 19 February 2019
Shares traded exclusive of subscription rights: On or about 20 February 2019
Subscription period: Expected 22 February 2019 - 8 March 2019
Final result/allocation: On or about 11 March 2019


EGM = Extraordinary General Meeting this is for the secondary offering (rights issue)

On the earnings call, they said they had commitments for 1 Bn of the 3 Bn offering. However, the stock has dropped (as of today) 25% since the earnings call. With each drop, that means they have to issue even more shares to net 3B NOK. This is looking like a massive stock dilution. It should be noted that they did this same thing - issuing more stock - in 2018.
iflyjetz is offline  
Reply With Quote
Old Feb 15, 19, 5:06 pm
  #73  
Original Poster
 
Join Date: Jan 2013
Posts: 28
Originally Posted by iflyjetz View Post
March 31 is the key upcoming financial date for Norwegian; it's the date I've seen mentioned with respect to bond covenants.

Final result/allocation: On or about 11 March 2019
Right so this is the part I'm interested in. If the secondary offering "ends" (if I'm reading this right) on 8 March, and results on 11 March, won't we know by then if the airline can continue operations through summer?
Daedalus7 is offline  
Reply With Quote
Old Feb 15, 19, 7:03 pm
  #74  
 
Join Date: Dec 2011
Location: DTW
Programs: TK E+, DL, WY, Radisson R
Posts: 1,888
Originally Posted by vincewy View Post
I have booking of 1 way ticket during the summer (KEF-BGO) and I'm considering buying another FI ticket and try to get the taxes and bag fee back from Norwegian booking ... or simply outright abandoning the ticket. Given FI flight will save me money on car rental during stay in Reykjavik.

If I sit back and watch the airfares (FI) will rise significantly, I barely got the W fare on another FI flight which next bucket is T (fares doubles).
In the end I just bought another FI ticket for the peace of mind, given the late departure time from KEF, any delay (let alone going bust) would cost me even more in other areas.
vincewy is offline  
Reply With Quote
Old Feb 19, 19, 7:18 am
  #75  
FlyerTalk Evangelist
 
Join Date: Mar 2000
Posts: 15,654
Originally Posted by iflyjetz View Post
March 31 is the key upcoming financial date for Norwegian; it's the date I've seen mentioned with respect to bond covenants.

As far as the secondary offering, page 22 of the Q4 presentation has the details, here: https://www.norwegian.com/globalasse...esentation.pdf

Here's a few bullet points from page 22:
Key dates:
Key terms of the rights issue to be set: On or about 18 February 2019
EGM: 19 February 2019
Shares traded exclusive of subscription rights: On or about 20 February 2019
Subscription period: Expected 22 February 2019 - 8 March 2019
Final result/allocation: On or about 11 March 2019


EGM = Extraordinary General Meeting this is for the secondary offering (rights issue)

On the earnings call, they said they had commitments for 1 Bn of the 3 Bn offering. However, the stock has dropped (as of today) 25% since the earnings call. With each drop, that means they have to issue even more shares to net 3B NOK. This is looking like a massive stock dilution. It should be noted that they did this same thing - issuing more stock - in 2018.
So I'm no expert on European financial markets, but it does seem hard to believe you could get folks to buy into this secondary offering. I mean, let's look at reality. Their business model doesn't work. Who's going to invest in that? This is not a situation where "giving them a little more time" could work. I would think they'd need a radical change in that model for investors to have enough hope to invest.
iahphx is offline  
Reply With Quote

Thread Tools
Search this Thread