[mkcol74]

@transtraxman Thanks for taking the time to do that for me, I clearly was quite lost 🙂

[transtraxman]

When the Spanish economical daily, Expansion, published the news about IAG and Norwegian on Monday last, I was surprised no other news media picked up on it.
This is the only comment I have found about IAG´s supposed third bid for Norwegian…
“Speculation over IAG bid for Norwegian cools”. (Travel Weekly 22-5-18)

http://www.travelweekly.co.uk/articles/304153/speculation-over-iag-bid-for-norwegian-cools

The comment after the article is worth reading too.

[AnthonyDunn]

FDOS: VMTs for the explanation of this and CLI.

[transtraxman]

In the light of Lufthansa’s interest in Norwegian some points need to be considered.
The Bloomberg chart used on the shareprice clearly indicates that the underlying value given to Norwegian, by the markets, is in the region of 180 kroner. After IAG’s interest was revealed the price shot up to about 250 kroner. Fromm there it has climbed further but has been gradually falling again to 240 kroner. Lufthansa’s interest has pushed up the price to 280 kroner,at least. Analysts have calculated that the company can go for up to 320 kroner / this seems a tad expensive for me.

The crunch will come in the autumn – as it already has for Monarch, Air Berlin and Alitalia – when the results for the spring and summer quarters are known. Norwegian has to make substantial operating profits in those periods for it to have a half chance of surviving or selling itself off at a high price. The prospects of high oil prices and intensive capital investment in new aircraft could still push the company into the arms of a white knight.

So what is happening. I think that Norwegian CEO, Bjorn Kjos, wants to talk up the price to ensure Norwegian sells out at a high price.On the other hand Lufthansa’s CEO, Carsten Spohr is playing the spoilers’ game knowing that Eurowings has few synergies to gain from merging withg Norwegian but wants to make the purchase expensive for IAG. Wille Walsh, CEO of IAG, knows that a waiting game is to his advantage especially with regard to the European/British competition-antimonopoly authorities when the ripe fruit could fall into his lap.

We will see.

[transtraxman]

So we have the results of the Norwegian group for the second quarter. The turn round is from a loss of NOK 691 million to a profit of NOK 300 million. That is quite an achievement. Now we have to see what happens in the third quarter and what effect the fuel price increases have on the results. After that IAG and its rivals have to decide what to do.

Norwegian emerges from the red to post second-quarter profit – Travel Weekly 12th July 2018
http://www.travelweekly.co.uk/articles/307522/norwegian-emerges-from-the-red-to-post-second-quarter-profit

The setting up of LEVEL in Vienna by IAG, as a short-haul LCC is all part and parcel in the chess game being played out in Europe for the uncommitted airlines.

[capetonianm]

Just a warning to anyone who might book Norwegian to double check what a/c you will be on, as I have heard that Norwegian have been leasing aircraft for some of their LGW-JFK services from a fourth rate Spanish airline called Wamos Air (used to be Pullmantur). They are using 747-400s which although ‘only’ about 21 years old are apparently in extremely poor shape internally, dirty, and uncomfortable, with crews and service to match.

It is clearly shown at the flight selection stage if the flight is operated by Wamos :
Outbound
London-Gatwick – New York-JFK
Thursday 19. Jul 2018 17:05
Terminal: S
Flight DI7015 – Flex
Operated by Wamos Air

1 user thanked author for this post.

FDOS_UK

[FDOS_UK]

Good ‘heaps up’ capetonianm.

[Tom Otley]

IAG boss Walsh says still interested in Norwegian deal

But won’t keep the shares if it can’t complete the transaction

IAG will not stay a shareholder in Norwegian if no takeover deal

[JJ]

Had a look at some flight reviews for the Wamos 747. Can’t say I’ve ever seen such bad reviews before. Sounds shocking…

[Tom Otley]

Yes, good summary here

Wamos: the maligned airline you may soon be flying with

1 user thanked author for this post.

mkcol74

[Flightlevel]

Good addition to IAG portfolio and improved investment will avoid weird charters.
WW says it will retain its well known name (& brand?) so things will Level out?

[transtraxman]

Norwegian is to be watched. This article has appeared in Travel Weekly – 7/9/18
“Norwegian seeks to re-sell aircraft orders”.

http://www.travelweekly.co.uk/articles/311222/norwegian-seeks-to-re-sell-aircraft-orders

Does this mean it has come to realise that it has bitten off more than it can chew? If it cannot sell the planes or at least get the price it wants, does that mean Norwegian will enter a cashflow crisis?

It should also be mentioned that Norwegian is starting its 6 domestic Argentinian services in October just as the country goes into crisis and has to ask for a loan to the IMF. Any thing to point out is that the domestic services fly into Buenos Aires Aeroparque while the long distance flights leave from Buenos Aires Ezeiza. That does not make for good connectability.

Is IAG still interested and just waiting for its opportunity?

[Tom Otley]

Looks like the bid is dead…. and problems for IAG

Times piece first

Hopes fading for BA-Norwegian deal amid transatlantic inquiry

Then the FT on the inquiry…

UK competition watchdog investigates impact of BA routes deal

CMA probes transatlantic agreement also featuring American Airlines, Iberia and Finnair

[canucklad]

The investigation is long overdue ……and it should extend to the LH group as well.
I’ve never fully understood how airlines can create cartels in such a flagrant way.
The AA/BA JVA just wouldn’t be allowed in any other business sector!

[transtraxman]

For those who do not have access to The Times and The Financial Times, this article writes about the same.
“Competition investigation opens into transatlantic route agreement,” (RoutesOnline 11th Oct.)

https://www.routesonline.com/news/29/breaking-news/280968/competition-investigation-opens-into-transatlantic-route-agreement/

One particularly relevant part of the article states, “As five of the six routes subject to commitments are from the UK, and to prepare for the time when the European Commission may no longer have responsibility for competition in the UK, the Competition and Markets Authority (CMA) said it has decided to review afresh the competitive impact of the agreement in anticipation of the expiry of the commitments.”

Is not the CMA getting ahead of itself? The original EU enquiry into the joint venture gave it a (renewable) life span of ten years which runs out in 2020. Also it should be pointed out that the UK is still inside the EU.

Furthermore, as CANUCKLAD points out the enquiry should not exclude other joint ventures — the Lufthansa group/ Star Alliance, the Air France/KLM /SkyTeam groupings. These however, are outside the remit of the UK authorities so cannot be looked into. That makes the enquiry rather one sided and discriminatory. On the other hand the Delta/Virgin Atlantic joint venture is within a UK remit but it has not been mentioned. Should it not be included? I do not know whether the joint ventures are beneficial to the customer or not. Others can decide that but at least it should be fair in its approach. This would call for the co-operation of the US authorities to look at all the joint ventures not just one.

As the Times and Financial Times point out this seems to be a maneuver to stop any takeover of Norwegian by IAG with rather a narrow approach.As I remember from one article about a possible merger IAG plus Norwegian is roughly equivalent in size to the whole Lufthansa group. That would make such a merger beneficial?

[Author]

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