Airlines in a Crisis

Latest they accounted as income nearly 500 million nkr worth of unused and expired bonus points they had booked as expenses when customers earned them before the pandemic and before old Norwegian went bust. This comes in addition to the couple of billion nkr of future discounts Boeing gave them as repatriation for earlier problems old Norwegian had with the Boeing planes. New Norwegian also booked this in as income for 2022. In quarter 4 with twice as much income as the year before they managed to only loose about the same as the year before. Is that good, bad, nah or neither. It does point to that they still have problem with growing in a profitable way. Then we come to the the 7,8 billion nkr they say they have in cash. How much of this is unearned payments from future customers. The current CEO Karlsen used to count that as cash when he was just chief of finance in old Norwegian. That went bad in 2020 when they couldn't fly those customers, they all wanted refunds and no new mon...

Of course not. Flyr could have been saved at many stages trough its short life. By getting in top management that new what to concentrate on and what was not important during startup. And who had experience in which functions are needed and how many are needed in each function at each stage of fleet expansion. The main blame lies with the Chairman who got in the wrong people to lead the company. People without any experience from the startup and/or growth of a profitable airline. Even though they are few and far between in Norway. First a spender that let themselves be blended by the role, went for to many fripperies and lured into to rapid sudden expansion and associated expences when there where at that stage not enough passengers to pay for it.  Then replacing that ceo with a person that had been there and had influence on the process the whole time and think that would make a difference. A person that stuck to the plan that hadn't worked so far, just with a few added token savi...

SAS new route announcements seems to be more of the same. More flights from airports in Sweden to the US. More airports around New York. They have added flights from Gothenburg and Jylland which is ok I guess since the hop via Arlanda or Copenhagen is a bit of an iritation. Specially with the troubles due to staffing Arlanda had last summer. They have added JFK in addition to Newark for New York. Big wup regarding destination. And more costs for SAS to a more expensive airport. Unless they would want to become just a longhaul and swedish connections airline they should rather go for more direct connecting within Europe. SAS closed a lot of them during the pandemic and they don't seem to be coming back. There are now no diret SAS Oslo to Dublin flights. That is no direct connection between a Scandinavian capital city and another capital city in Europe.  And there is still no direct flight whatsoever between Dublin and Trondheim. Connecting via Copenhagen or Arlanda will cost you a w...

Norwegian is stacking up with even more planes for the summer months taking on Flyr's 6 737-ExMax that will probably be parked again for next winter.  Last September Norwegian flew 1.9 million passengers with their planes. In January they flew 1.1 million with the same fleet and with a fill of nearly the ssame as in September. That means they winter parked about 40% of their fleet and/or possibly some of the left over capacity was used for flying longer routes. And now they are taking on even more planes that most likely also will be parked when winter again arrives. The litle drip Norwegian get of passengers from the demise of Flyr will be almost unnoticable. Not either helped by that 3/4 of the Flyr fleet was parked anyway. 186 seat planes are to large for high frequency trafic in and around Norway for 80% of the year. And if you have less than 100 planes you should not park more than max 10% of them during low-season.. Lets hope that Norwegian drop some of their older 737-800 wh...

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...

The extra cash burn to prepare for the leases did indeed end Flyr. Instead of doing what they could to make money immediately they put theit hope in a deal that was to bring income in a summer they never reached. The 250 million nkr they got in in new finances last autumn should have been seen as a possible last gasp for the company. Specially since its founder and chairman Braathen said that that was the last 10 million he would bring to the table. That was a signal the company should have known would make future planned founding rounds difficult. Instead of seeing it as a last chance and doing something radically different they continued as before with an internal promotion to CEO that gave none whatsoever rise in share price. A bit of saving where negated by extra spending months before any potential wet lease income would appear in the accounts. A desperate ploy to sell futures to the market that did not appease shareolders for the shareprice to go above the crucial 1 norwegian øre...