Norwegian financial performance
03-26-2018, 11:31 PM
#31
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Joined APC: Mar 2007
Posts: 1,067
I am not a financial expert, but it does seem that every airline that goes through periods of rapid growth also experiences poor financial performance at the same time.
Back in 2009-2011 everyone predicted Virgin America would be gone shortly as they were posting massive losses which coincided with massive growth. When the growth slowed, the profits began. Pilots were warned not to go there because when Virgin America inevitably went out of business, having Virgin America on your resume would be a career killer. Virgin America is officially gone, but not because they went out of business, they became profitable and were sold. Now all the Virgin America pilots are ALPA members flying for a legacy airline.
Anyway, not really sure what will happen with Norwegian long-term as they have several divisions (some not even aviation related) and operating certificates, and the corporate laws of Norway and the EU are different than that of the U.S. I am more interested in what happens after the growth slows towards the end of this year. That will be the real indicator of whether they can sustain long term.
Back in 2009-2011 everyone predicted Virgin America would be gone shortly as they were posting massive losses which coincided with massive growth. When the growth slowed, the profits began. Pilots were warned not to go there because when Virgin America inevitably went out of business, having Virgin America on your resume would be a career killer. Virgin America is officially gone, but not because they went out of business, they became profitable and were sold. Now all the Virgin America pilots are ALPA members flying for a legacy airline.
Anyway, not really sure what will happen with Norwegian long-term as they have several divisions (some not even aviation related) and operating certificates, and the corporate laws of Norway and the EU are different than that of the U.S. I am more interested in what happens after the growth slows towards the end of this year. That will be the real indicator of whether they can sustain long term.
03-27-2018, 07:49 AM
#32
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Joined APC: Dec 2007
Position: 747 captain
Posts: 1,549
Originally Posted by Flytolive
Repeating nonsense doesn't making any less nonsensical.
03-29-2018, 07:35 AM
#33
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Joined APC: Nov 2010
Posts: 1,785
Originally Posted by Joachim
Combined with EasyJet, Europe's second largest LCC, it is fair to say that they have plenty of feed on the European side.
Originally Posted by Joachim
If you look at the focus cities in the US (e.g. FLL, EWR, OAK, IAH, DEN, SEA) it is not hard to see that they are aligning themselves with JB, Spirit, SW,AK, Frontier, et. al.
EasyJet expands connecting flights platform
by Ian Taylor Mar 28th 2018, 08:20
The budget carrier pledged to “sign up other airlines throughout 2018” and revealed it’s in “advanced talks” on further expansion with airlines in the Middle East and Far East.
EasyJet launched its connections platform at Gatwick last September allowing passengers to book connecting long-haul flights with Norwegian Air and WestJet of Canada, and it extended the service to Milan Malpensa this spring in partnership with Italian airline Neos.
It has now added connections to Thomas Cook Airlines’ long-haul flights from Gatwick to the US and Caribbean and connections to Corsair and La Compagnie flights from Paris Orly, plus Norwegian flights from Paris Charles de Gaulle.
The Worldwide platform allows the booking of connecting flights between partner airlines without a need for the ‘interline’ and codeshare arrangements required of network carriers.
EasyJet said connections to Norwegian flights from Amsterdam Schiphol will follow this summer, along with connecting flights on as yet unnamed carriers from Venice and Berlin Tegel.
The carrier will also add connections to Loganair flights from Edinburgh and Inverness, although no start date has been confirmed.
EasyJet said: “Over half the airline’s flights and 53 million easyJet customers a year will be able to connect to airline partner services and other easyJet flights in a single booking.”
Johan Lundgren, easyJet chief executive said: “We’ve been delighted with the appetite of partner airports and airlines to expand our Worldwide by easyJet connections platform.
“EasyJet will sign up other airlines throughout 2018, with talks already far advanced with middle and far-eastern carriers and we plan to expand to other easyJet airports across Europe.”
Thomas Cook chief airlines officer Christoph Debus said: “We have added an aircraft at London Gatwick, increasing capacity at the airport by 12% this summer to meet customer demand.”
03-29-2018, 11:03 AM
#34
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Joined APC: Jul 2017
Posts: 141
They're taking huge losses, yet still expanding annually by 40% in 2018 and their pilot labor costs are less than half of the US legacy airlines. That's pretty sad if you think about it. Taking away market share from the US legacy airlines and the international routes where the US legacy airline pilots earn the highest wages. NAI under cutting the legacy European airlines too.
It's one thing for companies like uber and lyft to take huge losses in the name of organically growing companies in a new untapped market. But what NAI is doing in an already well established and over saturated market with their cheap labor and undercutting the competition on ticket price is a shame. Essentially NAI is dumping their product into the US market below cost on the backs of under paid pilots.
It's certainly not fair and balanced competition and NAI is much worse for the US airline pilot career than the middle east airlines.
It's one thing for companies like uber and lyft to take huge losses in the name of organically growing companies in a new untapped market. But what NAI is doing in an already well established and over saturated market with their cheap labor and undercutting the competition on ticket price is a shame. Essentially NAI is dumping their product into the US market below cost on the backs of under paid pilots.
It's certainly not fair and balanced competition and NAI is much worse for the US airline pilot career than the middle east airlines.
03-29-2018, 11:15 AM
#35
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Joined APC: Jul 2017
Posts: 141
Originally Posted by NEDude
Back in 2009-2011 everyone predicted Virgin America would be gone shortly as they were posting massive losses which coincided with massive growth. When the growth slowed, the profits began. Pilots were warned not to go there because when Virgin America inevitably went out of business, having Virgin America on your resume would be a career killer. Virgin America is officially gone, but not because they went out of business, they became profitable and were sold. Now all the Virgin America pilots are ALPA members flying for a legacy airline.
03-29-2018, 11:55 AM
#36
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Joined APC: May 2017
Posts: 171
I have had several, overall very civil, discussions on here with NEDude and several others regarding the flags of convenience model, its effects on the maritime industry, and the similarities between the airlines and the Merchant Marines. The general response has been “yeah, but the airlines are different.”
I’ve worked in both industries, as licensed labor. Not many people have that in their background.
If nothing else scares you as a pilot, I would tell you to consider this:
When I left shipping, I was working as a 3rd mate on a US flag cargo ship built in the late 70’s. It was antiquated in every way. It was basically the El Faro. I made $15k/month take home when I was on it. I worked 6 months a year, and we had good union representation.
A Phillipino third mate I met in port on one of the last trips I did was on a brand new bulk carrier. He invited myself and a few of the other officers onboard for dinner. The ship was beautiful, spotless, and filled with modern technology. It was registered in Panama. My foreign compatriot made about $3k per month and worked 11 months out of the year.
The only difference between us was our nationality, and the registry of the ship.
I’ve worked in both industries, as licensed labor. Not many people have that in their background.
If nothing else scares you as a pilot, I would tell you to consider this:
When I left shipping, I was working as a 3rd mate on a US flag cargo ship built in the late 70’s. It was antiquated in every way. It was basically the El Faro. I made $15k/month take home when I was on it. I worked 6 months a year, and we had good union representation.
A Phillipino third mate I met in port on one of the last trips I did was on a brand new bulk carrier. He invited myself and a few of the other officers onboard for dinner. The ship was beautiful, spotless, and filled with modern technology. It was registered in Panama. My foreign compatriot made about $3k per month and worked 11 months out of the year.
The only difference between us was our nationality, and the registry of the ship.
03-30-2018, 09:56 AM
#37
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Joined APC: Apr 2015
Position: a cushy one with a forward facing window
Posts: 114
Originally Posted by joseolay
Virgin America only got off the ground because a billionaire wanted an airline and had plenty of cash to burn. Their profits haven't made up for their past losses. Their pilots were paid well below Legacy airline pilots. The legacy airlines would be larger overall with more total pilots on their lists and have a larger presence in SFO, LAX and JFK if it wasn't for the highly subsidized startup pet airline Virgin America.
04-05-2018, 11:38 AM
#38
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Joined APC: Aug 2015
Position: Captain
Posts: 1,559
Originally Posted by Flytolive
Norwegian lost almost twice as much in one quarter than it raised in its private offering and it is selling A320 NEOs. Yikes!
Norwegian raises $168 million to lift finances, warns of 1Q operating losses
Mar 21, 2018 Helen Massy-Beresford | ATW Plus
Norwegian Air Shuttle said it raised NOK1.3 billion ($168 million) in a private share placement as the LCC pushes ahead with its expansion amid rising fuel prices and currency effects, which are making for a “challenging” first quarter.
Norwegian has been shaking up the transatlantic travel market, using its rapidly growing fleet to launch new destinations and challenge legacy carriers on an important section of their networks with cheap tickets.
But on March 20, the LCC warned its first-quarter operating loss would be bigger than the same period last year at NOK2.3 billion, versus NOK1.7 billion, because of currency fluctuations and rising fuel costs.
“The average price for jet fuel in the first quarter 2018 is so far 12% higher than the assumption in the company’s current guidance, and the euro is 8% stronger than anticipated. Operations have also suffered from somewhat challenging weather conditions,” Norwegian said.
The carrier still expects capacity to increase 40% in 2018 and while it kept its prediction of unit costs excluding fuel unchanged for the full year, it said higher-than-expected fuel prices would lead to unit costs including depreciation rising to between NOK 0.415-0.42, up from a previous estimate of NOK 0.405 to 0.41.
Norwegian acting CFO Tore Ostby sounded a positive note about operational performance for the coming months on a conference call, during which the airline explained the proceeds of the placement would help fund its continued expansion: Norwegian launched flights between the UK and Argentina last month and plans to begin flying between Ireland and Canada this summer.
“We’re very comfortable on bookings and the market for the summer season,” Ostby said.
“We are very geared towards leisure and the summer season so with 100% growth in our long-haul operations at the same time as we have low season that is the explanation of our disappointing first quarter,” Ostby said. “Of course you will see that seasonality makes all the difference in the second and third quarters.”
He added: “2016 and 2017 were years of investment. This first half of 2018 is the final stage of the ramp-up of our long-haul operations so in the back-end of this year we will see that the growth of long-haul will gradually slow.”
Excluding fuel, the carrier is expecting unit costs to drop 10%-12% in 2018.
Norwegian is taking delivery of nine Boeing 787s in the first half of 2018, and expects to operate a fleet of 30 787s by summer, while capacity growth will slow in the second half with only two 787s scheduled for delivery. Ticket sales for intercontinental routes are growing faster than capacity, Norwegian said, adding that it expects single digit growth rates in the European short-haul network with stable demand growth.
The airline also said it is in discussions to sell up to five Airbus A320neos leased to HK Express with an estimated gain of $15-$20 million.
Norwegian has also initiated a review of strategic options for its frequent flyer program, Norwegian Reward, which has more than 7 million members and expected to rise to 9 million by the end of the year.
The airline will ask for approval to issue more shares with potential proceeds of up to NOK200 million at an extraordinary general meeting on or around April 4, it said.
Norwegian raises $168 million to lift finances, warns of 1Q operating losses
Mar 21, 2018 Helen Massy-Beresford | ATW Plus
Norwegian Air Shuttle said it raised NOK1.3 billion ($168 million) in a private share placement as the LCC pushes ahead with its expansion amid rising fuel prices and currency effects, which are making for a “challenging” first quarter.
Norwegian has been shaking up the transatlantic travel market, using its rapidly growing fleet to launch new destinations and challenge legacy carriers on an important section of their networks with cheap tickets.
But on March 20, the LCC warned its first-quarter operating loss would be bigger than the same period last year at NOK2.3 billion, versus NOK1.7 billion, because of currency fluctuations and rising fuel costs.
“The average price for jet fuel in the first quarter 2018 is so far 12% higher than the assumption in the company’s current guidance, and the euro is 8% stronger than anticipated. Operations have also suffered from somewhat challenging weather conditions,” Norwegian said.
The carrier still expects capacity to increase 40% in 2018 and while it kept its prediction of unit costs excluding fuel unchanged for the full year, it said higher-than-expected fuel prices would lead to unit costs including depreciation rising to between NOK 0.415-0.42, up from a previous estimate of NOK 0.405 to 0.41.
Norwegian acting CFO Tore Ostby sounded a positive note about operational performance for the coming months on a conference call, during which the airline explained the proceeds of the placement would help fund its continued expansion: Norwegian launched flights between the UK and Argentina last month and plans to begin flying between Ireland and Canada this summer.
“We’re very comfortable on bookings and the market for the summer season,” Ostby said.
“We are very geared towards leisure and the summer season so with 100% growth in our long-haul operations at the same time as we have low season that is the explanation of our disappointing first quarter,” Ostby said. “Of course you will see that seasonality makes all the difference in the second and third quarters.”
He added: “2016 and 2017 were years of investment. This first half of 2018 is the final stage of the ramp-up of our long-haul operations so in the back-end of this year we will see that the growth of long-haul will gradually slow.”
Excluding fuel, the carrier is expecting unit costs to drop 10%-12% in 2018.
Norwegian is taking delivery of nine Boeing 787s in the first half of 2018, and expects to operate a fleet of 30 787s by summer, while capacity growth will slow in the second half with only two 787s scheduled for delivery. Ticket sales for intercontinental routes are growing faster than capacity, Norwegian said, adding that it expects single digit growth rates in the European short-haul network with stable demand growth.
The airline also said it is in discussions to sell up to five Airbus A320neos leased to HK Express with an estimated gain of $15-$20 million.
Norwegian has also initiated a review of strategic options for its frequent flyer program, Norwegian Reward, which has more than 7 million members and expected to rise to 9 million by the end of the year.
The airline will ask for approval to issue more shares with potential proceeds of up to NOK200 million at an extraordinary general meeting on or around April 4, it said.
By 2020
NAI and the 787 flying will be history
Due to heavy losses, expect around 35 787s to look for a new home
On the other hand the low cost 737 will be there
My 2c
04-05-2018, 01:14 PM
#39
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Joined APC: Mar 2007
Posts: 1,067
Originally Posted by Sniper66
By 2020
NAI and the 787 flying will be history
Due to heavy losses, expect around 35 787s to look for a new home
On the other hand the low cost 737 will be there
My 2c
NAI and the 787 flying will be history
Due to heavy losses, expect around 35 787s to look for a new home
On the other hand the low cost 737 will be there
My 2c
04-05-2018, 03:19 PM
#40
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Joined APC: Feb 2006
Position: B-737NG preferably in first class with a glass of champagne and caviar
Posts: 5,903
Originally Posted by Sniper66
By 2020
NAI and the 787 flying will be history
Due to heavy losses, expect around 35 787s to look for a new home
On the other hand the low cost 737 will be there
My 2c
NAI and the 787 flying will be history
Due to heavy losses, expect around 35 787s to look for a new home
On the other hand the low cost 737 will be there
My 2c
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