Norwegian Secures New Funding, But Plans "Extensive Cost Reductions" And Aircraft Deferrals

They also announced that they lost 330m usd in 2018 even before any interest payments (adjusted EBIT). It looks like the net loss margin excluding any extraordinary gains is around 10 percent of revenue, a huge number. Flybe's was just around 1 percent if I remember correctly.

Given these numbers, the cash infusion will just last one year UNLESS they make drastic cutbacks VERY QUICKLY.

Yeah this isn’t the optimistic news it’s being made to sound like - John Frederickson drives a hard bargain, and will gain a lot of influence over the board, on terms that will be almost certainly worse than whatever IAG was offering, from a shareholder’s perspective. This basically gets them through the winter without breaching their debt covenants, but as @Chris K points out, thy will have to make ruthless cuts to their network quickly to survive. I’d imagine any route that is not already profitable (which I imagine means a good deal of their longhaul flying) will prob need to be cut...

I wonder what this means for the BOS-FCO and MAD routes that start soon? Premium Econ seats direct to Rome for ~$1350 are a steal and they seem to be giving away seats in Economy. Alitalia charges around $7K for trips without a Saturday night stay. It will be a while before these routes are profitable, if ever.

"The problem is that the airline hasn’t actually been able to make any money."

Well, a five second google search told me that they made a profit in 2005, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2015 and 2016. The main reason why I (and seemingly very few others!) think they're a fundamentally strong airline that's merely expanded too quickly, and therefore has a good chance of getting through this and making a come back. Granted I'm no aviation analyst though.

Chris K/Kerry - See my caveat above, but how on Earth can you use those numbers to make any predictions whatsoever? The rapid expansion has cost them a huge sum of money - this isn't just their normal operating costs. Simply stopping the expansion will cut out a huge amount of expense. Perhaps not enough to make it profitable, but I really have no inclination to start analyzing financial reports to find out!

Added to the above, I do agree the long haul flying has been a huge problem though. They shouldn't have pushed that so hard, and it wouldn't surprise me if they have to drastically cut down those routes (or even stop long haul altogether).

Have an SFO-FCO trip booked for July. Any thoughts on what happens if they cancel that route or if they file for bankruptcy?

IAG could make a final offer before selling their stakes to buy the airline which is worth around 35% less than it was two weeks ago

I can't speak to the financial status, but as a customer...I just got smacked across the face, with their cost-cutting model. Purchased a Premium Ticket to FCO this May (our 2nd trip to Italy). My wife and I were so impressed with the service, the plane (787), the Lounge and the drinks...that we started planning our next trip (while we were on our first trip).

Today, as the same Premium-Class ticket holder, I was greeted with:
1) Flight changes 3 weeks after purchase (enough to disrupt our hotel schedules)
2) No lounge Access (only Premium Flex tickets)
3) No free drinks (wine and beer...yes....but a cocktail or two is nice?)
4) ????

I understand cost savings...but these cuts were not communicated very well (if at all).
I want them to stay in business, but they have certainly taken the "cool" out of flying with them. We are cattle, now.

@Callum

The thing is...the amount they lost in the 3 years they lost money is as much as they made in profit in all the other years. And in many of those years, it was a fairly small airline. Now things are much more complicated. If they cut long haul, they'll become another Ryanair ou Easyjet. Can they compete with them? I don't know.

Another Freddie Laker scenario.....