Norwegian's tough winterBack to Forum
Norwegian is asking the holders of three bonds to convert about $350 million into equity, while aircraft lessors would swap at least $500 million of the 33.3 billion kroner ($3.1 billion) they are owed. The proposal would leave existing owners of the stock with 5.2% of the company — and that’s before a 400 million-krone equity issue that would dilute them further.
This seems an extremely high risk strategy, but then one wonders what alternative the bond holders had. Clearly it’s all been thought through, but the cost of keeping an airline grounded is punitive.
Good luck to them. They seem to have nine lives!28 Apr 2020
It is incredible. On Friday the board loses the vote to convert debts to equity so bankruptcy seems the only alternative, yet today they gain a victory in a repeat of the vote which lets Norwegian off the hook and permits it to gain access to their government´s subsidies.
“Norwegian Air To Be Kept Alive”, (simple Flying 4-5-20)4 May 2020
There must be something here I am missing completely. The article itself says that even after this operation there remains an enormous debt still to be paid.That is assuming that the airline can survive the pandemic. Is there very positive inside information concerning the future of Norwegian that I have not seen and recognised? Is it just wishful thinking on the part of investors because of the positive legacy left behind by the original airline? Or is it a great big scam to squeeze the investor dry for as long as the board can get away with it? The whole operation has no sense behind it. Or am I just too dumb to see what is going on?
Norwegian is basically closing down for twelve months flying only a few government subsidised routes within Norway. Does it not see that the best routes it did fly all over Europe will be cherry picked by the likes of WIZZ AIR or others. It did open some doors but others will now take advantage of Norwegian´s preparatory work.
Can anyone explain things to me,……….please?
“Norwegian Air pulls off equity sale”, (Travel Weekly, 15-5-20)16 May 2020
I check Norwegian Airlines online every so often and you can actually book transatlantic flights starting in June. I show CDG/SFO cancelled but there is a daily CDG/JFK flight, the only competitor to DL/AF on that route.16 May 2020
I check Norwegian Airlines online every so often and you can actually book transatlantic flights starting in June. I show CDG/SFO cancelled but there is a daily CDG/JFK flight, the only competitor to DL/AF on that route.
If I was cynical I would think that this is a good way to get cash in to a struggling business. They sell a ticket, receive cash, then, 15 days before departure, they cancel and offer a flight change or refund. A refund will possibly take 3 months so they have your cash, interest free, for 3 months. Of course they would not do this.16 May 2020
My understanding of the law is that Norwegian’s “operating licence” were specific to certain routes and once they had vacated or stopped using them, their Air Operating Licence and Air Operating Certificates to those routes had ceased to exist. Others, (vultures in waiting) could then come and cherry pick any one of those suspended routes and submit a fresh application expressing their interests and hopefully obtaining a route licence to fly on the more lucrative route. The Norwegian had voluntarily suspended and vacated those routes and under the capitalist system, another airline (with assets) has the liberty to pick up the left-over crumbs, and rise “like a phoenix from the ashes”!
This is an example of the capitalism as its best, dog-eat-dog! BTW that is what Virgin is doing against British Airways vis-a-vis competing with the BA on ONLY the most lucrative and profit making routes.
1 user thanked author for this post.16 May 2020
“This is an example of the capitalism as its best, dog-eat-dog! BTW that is what Virgin is doing against British Airways vis-a-vis competing with the BA on ONLY the most lucrative and profit making routes.”
Interestingly, although Virgin competed with BA only on their most profitable routes Virgin still failed to make money.
1 user thanked author for this post.16 May 2020
Looks like it fights another day, albeit under new ownership.
Another case of China flexing its financial muscle.20 May 2020
So the Chinese and the Irish own a minority interest in the airline. BTW, you can already book flights on their site for the remainder of the year depending on the destinations.20 May 2020
Another case of China taking over the rest of the world by stealth. This is what they are doing in Africa – offering ‘loans’ to poor nations for building railways and roads which will serve no useful purpose to the countries, purely in their own interest, and to keep those countries permanently indebted to them.
1 user thanked author for this post.20 May 2020
Another case of China flexing its financial muscle.
Not wanting this to become a political debate, so i’ll keep my comment reasonably neutral….
When foreign regimes display predatory behaviour , add to that the noises coming from westernised liberal democracies becoming louder and louder as they become increasingly alarmed , then it’s surely time for regulators to take action.
Money isn’t everything, being ethical and careful should be priceless19 Jun 2020
I see that Norwegian itself has answered the questions I raised in my last post (#998831, 15 May 2020). So it is not going to hibernate for twelve months but reopen routes on Mainland Europe from July. 76 routes from Oslo, Copenhagen and Stockholm.
“Norwegian to serve a wider European network from July”.
In fact if you look at the airline´s website you can see that in the coming months the number of routes will be doubled and tripled. From January next there will be a new tranche of flights including transatlantic ones from various points, not least London Gatwick as well as other non-Scandinavian airports.
for example: from Copenhagen in October: https://www.norwegian.com/en/route-map/Copenhagen-Alldestinations?D_Month=202010&IncludeTransit=False&ShowPrice=False
from Gatwick in January: https://www.norwegian.com/en/route-map/LondonGatwick-Alldestinations?D_Month=202101&IncludeTransit=False&ShowPrice=False
The explanation is either a) that Norwegian has just been living a big lie or b)the airline has seen the plans of its competitors developing into serious threats to its future. Did Norwegian see the vultures circling and realise that laying low for so long is not a wise policy? Understandable?- yes. But does Norwegian have the financial muscle to bring it off? – I doubt it.20 Jun 2020
So it is confirmed that Norwegian will be flying 7 transatlantic destinations from December; New York(JFK), Boston, Los Angeles, San Francisco, Miami, Tampa, Orlando.
Note: only Gatwick is mentioned as a starting point. There are 13 other European destinations mentioned from Gatwick in December according to Norwegian´s own website.
As far as I can see there are no other transatlantic flights in December, though I am surprised that anyone would want to fly to the USA awash with COVID-19 for some time yet.
There is a plethora of flights from the three Scandinavian capitals in December, but none transatlantic.
“Norwegian Eyes December Return To Long-Haul Flying,” (Simple Flying, 13 July 2020)14 Jul 2020
I do check the Norwegian Airlines flights from my gateway SFO and I have only noticed the LGW ones.
Meanwhile, Level Airlines is listing flights from BCN to SFO twice weekly starting on 29 October.14 Jul 2020