Norwegian digging deeper into its hole instead of taking opportunities offered

The language in their lawsuit against Boeing in connection with their termination of the contracts for ExMax and Dreampliner deliveries is not sparing the expetives.

A company in such a precarius position should be more careful when it comes to handling its in reality only supplier that it for a good while into the future still will be dependant on for the maintenance and value of its entire existing fleet.
Could it be that top management of Norwegian do not really know what it entails to change from Boeing to Airbus, or the risk of going Chinese or Russian. After all they are lacking indepth airline experience between them, coming more from a finance and retail background. The pilot retraining and dual engineering maintenance and double parts storge costs alone would stop the company from being a Low Cost. And a Low Fares airline without corresponding Low Costs will be a loss making business no matter how many routes you cut or how much you shrink, or how many extra candybars you sell onboard or extra experiences to go with it.

5 free Dreamliners is not a bad offer from Boeing as compensation for a plane which faults mainly are with the 3'rd party supplied engines. They may only be able to fly them 80% of what they originally thought, for now. But that isn't really aproblem anyway for the next few years. And at some time in the near future their engine supplier will have produced enough spares for quick swaps to compensate for the downtime.
If not for own use Dreamliners is a hot commodity at the moment. Look what is being flown and what is being parked in the rebound from CoVid19. Airlines are getting writh of their 747's, A380's and A330's for the more efficient and economic 787's and A350's.
Let set the 5's value at 200 million USD each. That is 10 000 million Norwegian krona, equal to the entire stock market value of the 3 billion Norwegian shares at the moment. And more than 3 times the value of the CoVid19 loans the government guaranteed for the company.
One would think Norwegian could turn those 5 787's into a regular inflow of cash from some leasing company. Think of all those lowly stagepayments coming in as they are built. Or alternatively nulling some of the lease payments for the rest of their fleet they themselves are due to pay leasing comanies over the coming years.

Comments

Post a Comment

Popular posts from this blog

Flyr aftermath

The cleanup after Flyr has brought to the front a number of ways the airline wasted its investors money. A number of staff had fancifull titles whcih point to an overflow of staff that wasn't completely necessary for a small startup company. Lots of VP's under the Chief level. Maybe some of the urge to comit to more planes was due to an overhiring of well titled staff that needed someone to manage which could only be justified by becoming a larger airline.  Where the ex-Norwegian managmenet building the backoffice of the new airline Flyr based on what the much larger airline Norwegian had. An airline that also went under unable to manage its debt or comitments, before being resurrected. A plane needs sa certain amount of pilots and cabinstaff to fly a certain schedule. It is the backoffice saving are to be had. Just as many staff in the back as flying staff seems excessive. Specially when one knows large parts of its ground handling and maintenance were outsourced A lot of effo
Read more

FareAutoCalc for calculating airline seat prices for a profitable result

Helpfull for airline pricing teams, actually just one person needed now, FareAutoCalc is an Android app that helps you set prices to rech profit on all your routes.  In its simplest form you enter the costs per flight, number of seats, how many fare classes (different price levels) you would like and at what load in percent you want to break even. Then it calculates the prices for each fareclass and the number of seats in same. You can manually enter the price rise scale for how much in percent you want the fare to rise between each fare clas. Or the app can do this for you using an even step in percent scale. It also has a Cost Detail page where you can enter detailed costs. This allows you to enter a number of set costs that could be the same for all flights, and some variable costs that varies by example flight distance. In principle its for a low cost carrier that don't have different seat classses and only differs in fare classes with different price levels where the price go
Read more

The Flyr wet leases where not the saviour but possibly what breakes it

Flyr has had extra costs over the winter to prepare for possible wet leases of halve it's fleet of 12 aircrafts. They where desperate for these as they tought the news of them would bring the share price over 1 norwegian øre (0.001 Euro) so they could get some more financing according to a desperate plan. However the deal inclided paying for preparation cost up front. Money Flyr didn't have the finances for. They should relly not have gone for any wet leasing that didn't include at least a 10% payment up front and the rest of the money for each flight paid at least 1 week before it took place. After all the charter companies customers pays it all up front. Another tell tale sign of poor management is that none of the 12 planes actually have any flights scheduled for tomorrow Tuesday 31/1-2023. So we are now awaiting whether they will still be in the skies on Wednesday. A poor sign is also that on the Oslo - Trondheim route, that has a total air-passenger trafic comparable w
Read more