Airlines in a Crisis

In these CoVid19 times it is even more important to simplify the interior of your planes to create as few touch and other virus transfer points as possible. Norwegian still practices having a cloth piece where you lean your head on rather than just the leather seat. Leather is much easier to clean with disinfectant than cloth that ideally should be removed and washed after each flight, but ain't. They might look nice with the airline name on them but one would think that by the time the passengers find their seats they already know they are flying with Norwegian. The emergency procedures are still on a loose sheet, even if laminated. Sticking these permanently to the seatback in front removes the need of touching it. In all seat pockets is a contamination trap in these pandemic times. Away with them.  And while we are on the theme of seats. Leaning seatbacks. Away with them. They are an extra unnecessary cost and mostly a bone of contention that add very little to the comfort

Norwegian have tried to have a service level more like easyJet than Wizz, and that has not really worked out for them. Maybe they can never reach the really ULCC levels being based in a high cost country like Norway. But the loyalty from their core customer base is more based on regional belonging than a steadily eroding included service level through adapting the Ryanair way of everything is an additional extra. They should more try for bettering Ryanair by mimicking the early days of Ryanair when they where an ULCC Ultra Low Cost Carrier. There are definitely an alternative way forward for Norwegian with less frills freeing up many costs and more important removing distractions for the staff and management. Anything other than a single menu offering should sample be avoided. All cabin staff should serve the whole cabin that should be of a single type configuration even on long haul. Let other airlines take the premium segment and simplify the product offered. That would also give e

What some fresh airline ceo's with no relevant airline background don't seem to get is that airplane seats are fresh produce. When the plane have taken off the unsold seats are no longer sellable so spoilt. Actually even 2 hours before it takes off. That is why hibernation is a bad solution for an airline. You can hibernate the planes, at a cost, but not the potential seat kilometers those planes could have produced. Every day you have a potential for selling so and so many seats based on your resources available and they largely need to be sold before the day begins. It's like preselling strawberries you haven't picked yet. Every day you know there will be so and so many to sell and by the end of the day they are spoilt and thrown out. Even though fruit and veg are easier because some can be sold on sale tomorrow and in worst case sold as animal feed thereafter. Seats not sold and routes not flown, and where the plane haven't been utilized elsewhere, have no valu

The boardroom changes planned for Norwegian seems small compared to that the entire ownership structure have changed since the current board was chosen. Only 2 representatives from leasing companies that now owns a very large part of the airline. And only 1 other new board member. That is shockingly lazy work from the consultants hired in to assist in the process. But maybe not so unexpected since the same people where responsible for finding the new management just being put into action at the company. For an airline with only 8 planes flying they on the other hand certainly  have decided to reward the board handsomely for the coming year. One would hope the planned reduction from 3 to 2 weeks for notifications of emergency general meetings is a sign that other changes are planned in the near future by some of the soon to be elected members of either the board or the selection committee. Changes are needed, and quickly before the current management squanders on a hibernation mode

The Ryanair principle is all passengers are the same. However none of their basic principles seems so strong they can't be broken. Take the free seating. Fallen by the wayside. Single queueing always with families and they who needed help boarding first. Also gone. Anything to make an extra buck looks like their new way. Could this lead to a 2 or more class division of the cabin. After all full service airlines saw it as a cheap way of charging twice as much, or more, for the tickets. But when does it then stop to be a Low Cost and just becomes another full service with slightly lower fares. Norwegian is running a 2 class principle with more spacious seating in its premium cabin. But then it is more a Low Fare than a fully Low Cost competitor. Yes is tempting for those quite a few extra quid some are willing to pay for a little more be it space, food or service. But how much does it cost to have 2 sets of cabin standards, 2 types of meals and, 2 types of queues. And how distract

Most startups place their HQ at or near their main airport to keep a close eye on operations. It can also give combined advantages. Sample the DUB based flight crews used to meet up at the Ryanair hq and transport in a van directly to the planes, needing no extra office space within the terminal. Ryanair management used to walk or drive up to the airport complex frequently and many of their top management where known to be very hands on. Sample during the baggage handler strike of 98 they where all handling suitcases. In fact every male employee in the White House (nick name for then Ryanair HQ) was. And most of hq staff had airport airside passes hither and tither. Even after the move to larger premises the DUB airport main terminal is less than a 5 minute drive away. Airlines like Norwegian on the other hand seem to have missed that the Oslo airport have moved from Fornebu to Gardermoen at the opposit end of the city. Not only that but they are paying rent at what is rumoured to g

Norwegian came out with its may figures today. The only numbers was total flown in May and how many seat kilometers had been offered. That is like comparing grapes and melons. Airlines have somthing to learn from Trump. Instead of focusing on the total number of unemployed in todays press conference he was all about how many had gone back to work. That is a positive number and was taken positively by the stock market. Airlines should do something similar and get used to that this year is different. I'm sure in Europe May's numbers would have compared favourably with April and that is what should have been emphasised. How many more passengers in May than April. How was the load factor on the planes that did fly. How was the payment willingness among they who do fly. How many planes in use compared to total fleet and add to that the percentage number of earlier total staff brought back and what the production was in the same period last year to see the theoretical potential.

Even i a downturn, or a crisis, airlines need to keep looking and preparing for opportunities. An old saying is saving until bust, meaning keeps on saving and shrinking until there is nothing left. In these time airlines like Norwegian should instead of going into complete hibernation mode be constantly looking for opportunities. If pairs of countries open up for travelers from 14 days in the future they should schedule flights between these pairs today and sell them from tomorrow. Specially since all new(ish) routes need to be advertised and sold beforehand to build up a certain load factor even on opening day. Airlines should start by looking at all historical pairings they flew. Even if you home primary country is still restrictive don't mean that other scandinavian, european or world contries are. One should also be looking at expanding and capturing new marketshares from airlines that are more slow movers. Every crisis bring opportunities for they with the wherewithal and

It is disapointing that Norwegian as one of only a few airlines in the world have not made a success of flying cargo with the 787. In these CoVid19 times the demand for cargo flights have been immense and many airlines with belly holds capable of taking air containers have been grabbing the chance to get some hard needed cash into the business. Some have even manually loaded cargo in the seats or temporarily taken the seats out for easier loading of both bagged and palletized cargo. All loaded through the normal aircraft doors. Why not Norwegian. It is not like Norway or the other places it used to fly to and between don't have airfreight needs. All we hear from the company is they can't do it profitably. Have the way they layed off people made it to difficult or expensive to take some back for possibilities. Including also constantly new openings for passenger flights. Is their cargo department to unimaginative when it comes to spotting, utilizing and negotiating deals th

Norwegian came out with its plan to serve the norwegian market with norwegian package hollidays at the same day as the government opened up for travel within the Nordic countries. Only work related for now but this government have proved so wobbly when it comes to standing by its decisions that anything could happen. actually most countries governments have in this crisis proved that any reopening schedule tends to be fast forwarded as the lightest political pressure appear from all sorts of groups. This means an airline like Norwegian that have and still should serve an international market need to be planning far ahead to take advantage of all planned opening dates for borders and relaxation dates for quarantines. In addition to having contingency plans for when these move forward. As they also should have plans for if they get more restrictive again. If something is announced by any of the countries they could fly to Norwegian as an airline should within hours come up with a pla

Or is it hibernation for the year. They refused to hold a press conference when the first quarter results came out and issued just a written statement. There where no new plans for this year at a time when other airlines left, right and center come up with their back to business plans from June/July. Instead just what had happened from January to March, so pretty much pre CoVid19. A company like Norwegian should squander no time or opportunity getting a momentum going by presenting a basic timeline for coming back from the nearly dead. It can always be adjusted as more countries opens up, or closes down again, but get something up there you can sell and get those prepayments in. Something that will make the lease holder share owners happy that there is lights not only at the end of the tunnel but also in it. And a chance for some early payback also for the power by the hour deal. Not to mention that any positive news on more planes in the air can only lead to a real upswing in the s

The one part of Norwegian's top leaders that seems to be doing ok even in Corona times is Finance represented by Geir Karlsen. But then he was the CEO for a few months. On the other hand this concurrent story of delayed aand abandoned presentations of the current staate of affairs is wearing a litle on the mantle gained during the financial restructuring of the airline. Operations is not doing well in neither running an airline consiting of a fleet of 7 planes. Nor can they organize the and neither do they have a plan for how to expand and test the waters for other possiblilities. With that we can put a minus on the PR and press handling department because the way they have defended this shambles reminds us of the days of Comical Ali. Engineering also seems pretty distant if they think having only 7 planes in action instead of rotating the whole fleet to keep it current and avoid massive maintenance costs at the end. And what about that other Dreamliner fleet where nothing is m

One would think a price of 4.50 Nkr for Norwegian shares that with all the new shares values the company higher than when the share was worth 300 Nkr would scare of any buyers. But no. Institutional and experienced share owners sell while small savers buy in and think the share over some years will again rise to the 300. That would in case value the company at more than 9 times the value of Ryanair and probably more than all the other publicly traded airlines in the world combined. Norwegian should take advantage for this surge for the share and expand the share capital again. The last expansion was seriously oversubscribed. It seems like at every turn for some reason the company is issuing seriously fewer new shares than the market could swallow. Except that is for when it decided to force them on bond holders and leasing companies.

Hibernation is not the right path for any airline. Neither planes nor crew nor admin or financials benefits from it. They should: Start to rotate planes so all of them get an airing on a regular basis. Utilize freight opportunities so also 787's can get flight time. Start to rotate pilots so they are all ajour with license requirements and up to date on their flying skills. Negotiate with government for flexible utilization of percentage return to work schemes for all employees. Flexibly add additional later departures for those departures that fill up quickly. It is not like they don't have neither slots, planes or crew available an mass. Look for near future opportunities in other scandinavian countries where governments may not keep their travel advice for foreign travel as restrictive aw Norway. Prepare their spanish bases for Scandinavia to the sun as soon as that and other med countries opens up for summer seasonal travel. This would also placate possible lawsuits l

It have been suggested that Norwegian could give their (ex)pilots some at least simulator time so they can keep their licences current during the CoVid19 crisis. A pilot must have ompleted 3 take offs and landings in the last 90 days to be able to fly a jet with passengers without pairing with an instructor. Having decided to park most of its fleet for 12 months a lot of their pilots will become uncurrent. Keeping their certificates alive should be a very small outlay in a difficult situation. Think of it. Norwegian is flying no ne of their 787 fleet whatsoever as part of their 7 planes in the air program. That could lead them with no current pilots whatsoever, including instuctors/examiners, to start up again. That could be a massive headache. Not to talk about that parking planes outdoors in Europe without flying now and then is a maintenance nightmare. Pretending they don't know these pilots is the worst they could have done and places the company in a difficult and uncler

Over time Norwegian should be split in 2 units under an umbrella managments to purify the single aircraft type principe of a true Low Cost airline. There can be no profitable Low Fares without Low Costs. The short haul (NSH) 737 part should concentratte on servinf te scandi/nordic market where it can capitalize on its namerecognition and customer belongingness. with additional routes from there to sun destinations and other Norwegian long haul hubs. The long haul (NSL) 787 part should be based elshewhere like Dublin or London Gatwick. Together with overall management of both companies. From here it would become the only really independent Low Fares intercontinental airline. All others are just offspring of full service airlines where the core of the company are not really in it 100%. Both parts should initially during the pandemic offer a Sanitized class and a Couldn't Care Less class (see other post) to appeal to the broadest market and get more flying. As time goes on they

Did Schram forget that the world has changed when he today presented his new'ish senior managment for Norwegian. The plan from last winter should have been put out to pasture and a new one created more suited to corona and a return. Getting in old sales colleagues to sell more inflight stiff to passengers no longer existing is a bit to late. Will these new brooms first start in April next year when the company plans to have more than 7 planes in the air. The won't sell much aboard a plane where everyone wears a mask. And the experience is more about not getting infected rather than anything else. The position, in addition to Karlsen's, that is most of importance is Chief of Operations. And they haven't filled that. No wonder they have problemes handling even 7 planes. The CEO must have been in a hurry to present his plan before the new owners get control of their shares, get organized and come up with their own plan. Or person/team that will form that plan. Will th

What is the plan for the lenders new shareholdings in Norwegian. Why did they not just take the planes back and finished with it. A loss is a loss and better be over and done with it and move on. Are they just leaving the Dreamliners there hoping the Norwegian government through unsecured loans to Norwegian will pay for maintenance and parking for them until the market returns. Then take them back only at such a time when existing or new airlines make signals to move on the Transcontintal markets Norwegian left behind. Unless Norwegian's management in the near future quickly turns around and show they have a plan for all those aircrafts one would assume the planes real owners will take them back. In the meantime they can always make some extra cash by selling the billions of new Norwegian shares to upset norwegians. On the other hand would they not be better off getting in a new management with a vision for the company. A vision for how planes could be utilized whatever it take

Financing your airline by selling your planes on delivery at price+ to a leasing company against paying extra high rents for a contracted amount of years, is proving to be a bit of a trap in times when you can't make an icome from said planes. A company like Norwegian have proven that to all when they saw the necessity of handing over control to their lenders by converting some of the debt to shares and making the before 100% shareowners into mere 5% owners. This type of financing is more like the old fashioned cropholder, but on a company level. A practiche that ultimately lead to you becoming a pure tenant of your own holding, and possibly to eviction from it, the first time the harvest failed.

Norwegian worked up a good brand in Low Fares transatlantic and to parts of Asia. Now when they are retracting to the Norway and Scandinavia market, plus probably something to bring those customers to some sun like Spain, Italy, France and similar, it leaves a market, new fleet and crews ready for easy prickings for the right operator. London Gatwick could be losing some of its main operators on the transatlantic market with Virgin shrinking and BA retrenching to Heathrow. So there is an opportunity for a partial ready made market to be exploited when traffic returns. And chances of a head start for they willing to dip a toe in the water, with the potential of real returns. Many have tried and failed in Europe-US low fares. Few had such a chance that now exists to make it also a true Low Cost. Utilizing the worked up brand of Norwegian could give an instant ready supply of potential passengers. Combine that with a great opportunity for exceptional deals on leases, low price on fuel