Tag: Norwegian (Page 4 of 5)

IAG Says New Norwegian Bid Unlikely, but ‘Never Say Never’

March 6, 2019 / WIL BALDWIN

BRUSSELS (Reuters) – British Airways owner IAG is unlikely to renew its interest in Norwegian Air after ruling out a new bid for the Scandinavian carrier earlier in the year, but “never say never”, IAG Chief Executive Willie Walsh said on Wednesday.

“I’d never say never, but I think it’s unlikely,” Walsh told reporters on the sidelines of the Airlines for Europe summit in Brussels.

IAG sold its stake in Norwegian when it ended its interest in the airline, which competes with IAG’s low-cost long-haul Level brand, earlier this year.

“If there was a case that we might have done that (renewed our interest), we probably would have retained the shares in Norwegian,” he added.

Norwegian Air Shuttle; 737MAX-8; Air to Air; K66675

Asked if Level could expand into Scandinavia, Walsh said: “It could, ultimately.”

“There are several significant markets that are underserved from a long-haul point of view and can be best served by a low-cost model,” he said.

He also said that, although he was still not interested in buying A380s, those who wanted to approach him with offers after Airbus said it was scrapping production of the superjumbo should do so.

“I’m not looking to buy A380s. If there are people looking to sell them, they should probably approach us, because we would be one of the few people who might be interested. But I’m not looking to buy,” he said. “Let’s see what happens.”

(Reporting by Alistair Smout; Editing by Jason Neely and Mark Potter)

Norwegian Air Owners Approve Discount Share Sale

February 19, 2019 / WIL BALDWIN

OSLO (Reuters) – Norwegian Air’s shareholders overwhelmingly endorsed on Tuesday the lossmaking airline’s plan for a deeply discounted cash call to help bolster its finances, Chairman Bjoern Kise said.

Norwegian Air said on Jan. 29 it would raise 3 billion Norwegian crowns ($348 million) in a rights issue, just days after British Airways owner IAG ruled out a bid for the budget carrier.

Norwegian is trying to replicate on transatlantic flights the low-cost model that dominates the short-haul market, exemplified by the likes of Ryanair and easyJet, but is struggling to make the business profitable.

The European airline sector faces overcapacity and high fuel costs, with several operators going out of business, the latest being British-based Flybmi which filed for bankruptcy on Sunday.

In the rights issue, Norwegian’s owners will get the right to buy two new shares at 33 crowns each for every share they own, compared with Monday’s closing price of 93 crowns.

Holders of more than 99 percent of Norwegian’s equity backed the proposal at a meeting on Tuesday, company officials said.

By selling new shares far below the market price, Norwegian will boost the value of each of the purchasing rights, which can be bought and sold.

This in turn allows Norwegian Air Chief Executive Bjoern Kjos and his business partner, the group’s chairman, to sell some of their subscription rights and reinvest the proceeds in new shares, thus limiting the dilution of their joint stake which stands at 24.66 percent.

Norwegian said last month that billionaire investor John Fredriksen was among those who had agreed to take part in the issue.

($1 = 8.6295 Norwegian crowns)

(By Terje Solsvik, Editing by Nerijus Adomaitis and David Holmes)

IAG Rules Out New Bid for Norwegian Air

January 24, 2019 / WIL BALDWIN

LONDON/OSLO (Reuters) – British Airways owner IAG (ICAG.L) said on Thursday it would not make a new bid for Norwegian Air (NWC.OL) and would sell its remaining stake in the budget airline, sending Norwegian’s shares sharply lower.

Shares in Norwegian, which has been under pressure over the past 18 months to control costs and shore up its balance sheet, dropped as much as 26 percent after IAG’s statement to hit their lowest since November 2012.

“International Airlines Group (IAG) confirms that it does not intend to make an offer for Norwegian Air Shuttle ASA and that, in due course, it will be selling its 3.93 percent shareholding in Norwegian,” IAG said in a statement.

IAG’s shares turned positive after its statement, and were up 1.5 percent at 1305 GMT.

Norwegian, which has shaken up long-haul rivals by offering cut-price transatlantic fares, said in May it had received two conditional proposals for a full takeover from IAG, but had rejected them because they undervalued the company.

IAG CEO Willie Walsh last year ruled out launching a hostile takeover approach for Norwegian, and also said he wouldn’t get drawn into a bidding war. In addition to British Airways, IAG also owns Iberia, Vueling and Aer Lingus.

A spokeswoman for IAG declined to give further details on the decision not to pursue Norwegian further, but said “we wish Norwegian every success in the future”.

NO MARGIN OF ERROR

“Norwegian’s plans and strategy remain unchanged. The company’s goal is to continue building a sustainable business to the benefit of its customers, employees and shareholders,” Chairman Bjoern Kise said in a statement.

Norwegian has quickly built its long-haul route network, and in October overtook IAG’s British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area.

But the Nordic carrier has had to take action to improve its financial position in recent months. In December, it announced a $230 million cost savings programme and refinanced one Boeing (BA.N) 787 Dreamliner as part of a series of steps it said would generate more than $30 million in liquidity.

“Norwegian’s finances are already under pressure, and a share sale (by IAG) will put pressure on the stock, making it hard for them to raise money,” analyst Per Hansen of brokerage Nordnet said in a note to clients.

“They no longer have any margin of error. If they were to need cash, and no alternative buyers emerge, the stock price could end up looking like a jetliner running out of fuel.”

(Reporting by Alistair Smout in London and Terje Solsvik in Oslo, additional reporting by Helen Reid in London and Stine Jacobsen in Copenhagen, Editing by Paul Sandle and Mark Potter)

Norwegian Air to Shut Bases & Axe Routes to Cut Costs

January 16, 2019 / WIL BALDWIN

OSLO, Jan 16 (Reuters) – Budget carrier Norwegian Air will axe a number of routes in Europe and to the U.S and the Middle East, shutting several bases as part of a cost-cutting plan announced last month.

The fast-growing carrier has been under pressure over the past 18 months to control costs and shore up its balance sheet as it looks to crack the transatlantic market by undercutting established rivals.

“The company has reached a point where it needs to make necessary adjustments to its route portfolio in order to improve the sustainability and financial performance in this very competitive environment,” Helga Bollmann Leknes, Norwegian Air’s Chief Commercial Officer, said in a statement to Reuters.

The airline will close its bases in Palma de Mallorca, Gran Canaria, and Tenerife in Spain, as well as in Stewart and Providence in the United States. It will also shut the 737 base at Rome’s Fiumicino airport, but keep its 787 Dreamliner base there.

The company did not give a specific number of jobs that would be cut, but said it would seek to minimise redundancies.

The flights affected are operated by Boeing 737-800 and 737 MAX 8 models. Flights operated by Boeing Dreamliner planes are not affected, Norwegian said.

“These aircraft are primarily used on European routes, but also some longer routes between Europe and the U.S. and Europe and the Middle East,” Norwegian Air said in the statement, adding that this would start in April and would continue “for the best part of 2019”.

The measures announced on Wednesday are part of a cost-saving programme of 2 billion crowns ($234 million) announced in December, Norwegian said.

($1 = 8.5325 Norwegian crowns)

(Written by Gwladys Fouche; Editing by Terje Solsvik & Elaine Hardcastle)

Unraveling The Boeing 737 MAX Lion Air Crash

November 15, 2018 / WIL BALDWIN

(Reuters) – The crash of a Boeing Co 737 MAX jet in Indonesia on Oct. 29 has raised questions on whether the manufacturer shared enough information with regulators, airlines and pilots about the systems on the latest version of its popular narrow-body plane.

The jet operated by budget carrier Lion Air crashed into the Java Sea shortly after take-off from Jakarta, killing all 189 people on board.

WHAT IS NEW ON THE 737 MAX?

The most hyped features of the 737 MAX compared with its predecessor, the 737NG, are more fuel-efficient engines.

But as a result of the larger engines, which are placed higher and further forward of the wing, the jet’s balance changed. To address that, Boeing put in place more anti-stall protections, Leeham Co analyst Bjorn Fehrm said in an online post.

An automated protection system called the Maneuvering Characteristics Augmentation System (MCAS) kicks in when the angle of attack is too high, when the plane’s nose is too elevated, threatening a stall.

WHAT IS ‘ANGLE OF ATTACK’?

On paper, it measures the angle between the air flow and the wing. But it is so fundamental to flight that historians say the only instrument on the Wright Brothers’ first aircraft was a piece of yarn designed to measure it.

If the angle of attack is too high, the airflow over the wing is disturbed, throwing the plane into an aerodynamic stall.

One of two angle of attack sensors on the Lion Air jet was faulty, according to Indonesian investigators.

The U.S. Federal Aviation Administration (FAA) last week warned airlines that erroneous inputs from those sensors could lead the jet automatically to pitch its nose down even when autopilot is turned off, making it difficult for pilots to control.

WHICH AIRLINES OPERATE THE 737 MAX?

Boeing has delivered 241 of the jets to customers since it entered service last year, according to its website.

Major operators include Southwest Airlines, American Airlines, Norwegian, Lion Air, Air Canada, China Southern, China Eastern and flydubai.

Another 4,542 have been ordered but not yet delivered.

WHAT DID AIRLINES AND PILOTS KNOW ABOUT THE SYSTEM?

Lion Air’s flight manual did not contain information about the new anti-stall system, according to investigators and an airplane flight manual seen by Reuters. U.S. pilots were also not made aware in training courses, pilot unions say.

American Airlines said it was “unaware” of some of the functionality of the MCAS system. [L4N1XQ23Q]

Boeing Chief Executive Dennis Muilenburg told Fox Business Network on Tuesday that Boeing provides “all of the information that’s needed to safely fly our airplanes”.

HOW WOULD A PILOT SHUT OFF THE SYSTEM?

Pilots can stop the automated response by pressing two buttons if the system behaves unexpectedly, the FAA says.

That action is set out in a checklist used by Lion Air pilots for in-air troubleshooting, an instructor said. It is also required to be committed to memory by pilots.

Pilots on a flight from Jakarta to Bali the day before the crash experienced a similar sensor issue but managed to land safely by turning off the system, the New York Times reported.

HOW WAS THE SYSTEM APPROVED?

The FAA holds the main responsibility for certifying Boeing jets and training programs for pilots, but local regulators also issue approvals for airlines based in their countries.

An unresolved question is how Boeing measured the system’s reliability and on what basis the FAA certified it as safe.

HOW ARE PILOTS TRAINED?

An FAA document on training requirements for 737 MAX pilots transitioning from the older 737NG has no reference to the new anti-stall system.

Lion Air says it followed a training regime approved by U.S. and European regulators. The training was restricted to three hours of computer-based training and a familiarization flight.

However, Brazil’s regulator told Reuters that it had required specific training for pilots on the anti-stall system.

WHAT HAS CHANGED SINCE THE CRASH?

Boeing last week issued a bulletin to airlines reiterating existing procedures and advising them to add information on the anti-stall system to flight manuals, which was quickly followed by an FAA directive making that mandatory.

The FAA and Boeing are studying the need for software changes, as well as revisions to training and operating procedures on the 737 MAX, the regulator said.

WHEN WILL THE FIRST REPORT ON THE CRASH BE RELEASED?

A preliminary report will be released on Nov. 28 or 29, according to Indonesian investigators. However, divers have yet to locate the airline’s cockpit voice recorder, which would shed light on pilot interactions that are important for gaining a fuller picture of the circumstances of the crash.

(Reporting by Jamie Freed in Singapore, Tim Hepher in Paris, David Shepardson in Washington, Eric M. Johnson in Seattle, Tracy Rucinski in Chicago and Marcelo Rochabrun in Sao Paolo; Editing by Dan Grebler)

Image from www.boeing.com

Norwegian Air Deal For Potential $1 bln Cash Infusion

October 25, 2018 / WIL BALDWIN

Oct 25 (Reuters) – Norwegian Air Shuttle ASA is closing in on a deal to provide a potential $1 billion cash infusion to help it navigate increasing fuel prices and the slow winter period, Bloomberg reported on Thursday, citing people familiar with the matter.

The company said it is in “advanced discussions” with an unnamed partner to create a fleet joint venture that would take over cash obligations on its large aircraft order book, according to reports.

The potential deal will include an initial 8 billion Norwegian krone injection to help the Oslo-based carrier cover for payments it has made for Boeing Co and Airbus SE aircraft, Bloomberg reported.

Norwegian Air declined to comment.

(Reporting by Rishika Chatterjee in Bengaluru; Editing by Shounak Dasgupta)

Megadeth Announces First-Ever Megacruise

October 11, 2018 / WIL BALDWIN

MEGADETH has announced its first-ever Megacruise will take place starting on October 13, 2019 aboard the Norwegian Jewel. The 5 night journey will depart from Los Angeles, California, with stops in both San Diego, California and Ensenada, Mexico. The ship will return to Los Angeles on October 18, 2019.

The official web site states: “While there are dozens of daily performances by our featured artists, that’s just the beginning of the fan experience. Quite simply, the Norwegian Jewel will become the home of artists and fans, interacting in many different ways throughout the five-night voyage.

“This interactive experience affords you a variety of events and activities that will put you front and center with metal icons that have been an integral part of your life. From Artist Photo Experiences to Intimate Morning Coffee Jams, Music Clinics to Fan/Artist Sporting Competitions and more, there’s always a way to get up close and personal with your favorite artists.

“You might happen to bump into one of your faves at one of the Jewel’s many watering holes, or possibly share a moment at the Charity Auction…this is truly a once-in-a-lifetime experience.

Confirmed bands joining Megadeth for the cruise so far includes Anthrax, Armored Saint, BeastO Blanco, Corrosion Of Conformity, Danko Jones, Devildriver, Doro, John 5, Metalachi, Metal Church, and Testament.

For more information visit: Megacruise.com

British Airways Loses New York Crown To Norwegian

October 8, 2018 / WIL BALDWIN

LONDON (Reuters) – Norwegian Air Shuttle (NWC.OL) has overtaken British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area, in the latest illustration of the low cost carrier’s move into British Airways territory.

Norwegian carried 1.67 million passengers to or from airports in the New York area in the 12 months to the end of July, compared with the 1.63 million carried by British Airways, data from the Port Authority of New York & New Jersey showed.

No-frills carrier Norwegian has been rapidly expanding in the transatlantic market over the last five years, prompting the owner of British Airways, IAG (ICAG.L), to try to buy it earlier this year.

The data showed four U.S. airlines, led by United, are the biggest carriers of international passengers out of the main airports in the New York area, which include John F. Kennedy International, LaGuardia and Newark Liberty International.

Air Canada is the biggest non-U.S. carrier of international passengers, but its dominance is on travel between the United States and Canada.

Norwegian, and other relatively recent entrants to the market such as Wow Air, have led a charge to shake up Europe’s long-haul flight market, offering ticket prices that can be as little as half those charged by traditional carriers.

The traditional airlines have responded by selling a new budget class of ticket, as well as setting up, in IAG’s case, new airline Level to compete directly with Norwegian on price.

Lufthansa has also started budget long-haul flights using its Eurowings brand.

Norwegian said in May it had rejected two approaches from IAG, which also owns the Iberia, Aer Lingus and Vueling brands, because they undervalued the company. IAG owns a 4.6 percent stake in Norwegian.

The pace of Norwegian’s growth – figures from July 2017 show it only carried 750,000 passengers into and out of the New York region – has weighed on its finances and it faces mounting pressure to control costs and shore up its balance sheet.

British Airways did not immediately respond to a request to comment on the figures.

(Reporting by Sarah Young; Editing by Mark Potter)

Norwegian Air To Possibly Sell Its Airbus Aircraft

September 4, 2018 / WIL BALDWIN

By Ole Petter Skonnord

OSLO (Reuters) – Norwegian Air (NWC.OL) expects to announce further aircraft sales by the end of the year including used Boeing 737s as well as some of the new Airbus planes it has on order to reduce it debt commitments.

Norwegian Air has committed to acquire 210 new aircraft from Boeing and Airbus by 2020.

“We have 90 neos (A320neo) from Airbus on order. The Airbus 320neos are for all practical purposes for sale. We have started a process where we will try to find a new home for those aircraft,” Chief Financial Officer Geir Karlsen told an investor presentation on Tuesday.

“The problem is not to sell them … but to get the price we want … Hopefully by the end of the year we should be able to disclose news on a transaction,” Karlsen said.

By the end of the year, Karlsen estimated Norwegian Air’s fleet of more than 150 planes to rise to 164-165. Taken into account planned aircraft sales, he said he expected a net increase in the fleet of 30-40 new Boeing 737 MAX aircraft by 2022-2023.

Of its Airbus aircraft on order, 33 of them are Airbus 321LR(long range) neos, which could be kept, depending on traffic development in Argentina.

“We are pretty excited about what we are doing in Argentina and depending on how that goes we will decide on the solution on the Airbus 321 and will possibly move some of them to Argentina,” Karlsen said.

ARGENTINA LAUNCH

He said Norwegian Air started to sell tickets in Argentina on Tuesday on two routes linking Buenos Aires with Cordoba and Mendoza.

The first flight is planned in mid-October and the plan is to have 4 aircraft in Argentina by year-end.

“We will look at ticket sales before we decide what to do,” Karlsen said.

Last week Norwegian Air announced the sale of six used aircraft and said as many as 140 planes could be sold over time as a part of the renewal of its fleet and to help reduce debt.

Karlsen said sales of used aircraft would continue.

Such sales would “probably to be sold plus/minus book value as it looks now. Hopefully a little bit above,” Karlsen said.

(Reporting by Ole Petter Skonnord; editing by Jason Neely)

Image from www.norwegian.com

Will IAG buy Norwegian

April 12, 2018 / WIL BALDWIN

Parked Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air are pictured at Stockholm Arlanda Airport March 6, 2015. REUTERS/Johan Nilsson/TT News Agency

By Sarah Young

LONDON (Reuters) – British Airways-owner IAG (ICAG.L) said it is considering making an offer for Norwegian (NWC.OL), a low-cost carrier worth about $1.2 billion, in a deal which would expand its budget offerings and give it control of a struggling rival.

IAG said on Thursday it had bought a 4.61 percent stake in Norwegian as a platform for starting talks, and that could lead to it making a full offer for the airline founded by former fighter pilot Bjorn Kjos.

“IAG confirms that no such discussions have taken place to date, that it has taken no decision to make an offer at this time and that there is no certainty that any such decision will be made,” IAG said in its statement.

Shares in Norwegian, a stock which this year has been pounded over worries about its profitability, surged 37 percent on the news. https://reut.rs/2qqcSn6

A trailblazer of low-cost long-haul flying in Europe, Norwegian has been leading the charge to eat into the trans-Atlantic market where traditional full-service carriers like British Airways have historically made most of their profits.

Norwegian has already made its impact felt: British Airways and others have recently tried to compete more directly with Norwegian by introducing basic economy fares.

But Norwegian’s fast expansion has left it under pressure to control costs and shore up its balance sheet.

That has provided IAG, formed in 2011 through the merger of traditional flag-carriers British Airways and Iberia and led by CEO Willie Walsh, with an opportunity, say analysts.

Seasoned deal-maker Walsh was much quicker than rival full-service airlines Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE) to embrace budget flying, buying short-haul carrier Vueling in 2015 and setting up IAG’s own long-haul low-cost carrier Level last year.

“Willie Walsh has long been interested in the low-cost long haul concept, long before the creation of Level. This may be an attempt to accelerate its development, while also adding to the scale and reach of Vueling in the intra-European market,” Liberum analyst Gerald Khoo said.

Adding Norwegian’s short-haul operations in Europe to Vueling would create a budget carrier better placed to compete against the continent’s two biggest low-cost airlines Ryanair (RYA.I) and easyJet (EZJ.L).

Bernstein analysts said a full takeover could be expensive but suggested a partnership deal would benefit both parties.

“A partnership that looks to maximize the synergies of the two networks, minimise duplications of capacity and investment on key routes, and use IAG’s travel management capabilities to improve Norwegian’s expertise in this area could all provide some of the benefits of consolidation without the likely high cost of a deal,” they said.

NORWEGIAN UNDER PRESSURE

Highlighting the difficult state of Norwegian’s finances, the airline last month raised $168 million in a share sale after warning of a larger than expected first-quarter loss.

Norwegian said in its statement on Thursday that it had no prior knowledge of IAG’s actions, but welcomed the investment.

“Norwegian believes that IAG’s interest in the company confirms the sustainability and potential of our business model and global growth,” it said.

Norwegian’s shares, temporarily halted after the IAG news, rose as much as 39 percent to 250 crowns when they resumed trading, valuing the company at 9.5 billion Norwegian crowns ($1.22 billion).

Whether it proceeds with an offer for Norwegian or not, through its new investment, IAG will at least be well-placed to influence its rival.

“If there is no imminent bid for Norwegian, IAG is just the first vulture to have landed that would like a say in how Norwegian’s long-distance fleet … is dismantled and sold,” Norne analyst Karl Johan Molnes said.

There will be no buying Norwegian on the cheap, however, said SEB analyst Jo Erlend Korsvold.

Even after Thursday’s rally, Norwegian’s founder and top owner, CEO Kjos who controls a quarter of the company’s shares, is expected to demand a significantly higher price before selling, said Korsvold.

Kjos was not available for comment when contacted by Reuters.

IAG’s interest in Norwegian would see a wave of consolidation in European air travel which started last year extend its reach to long-haul travel.

Lufthansa and easyJet expressed interest in Italy’s struggling Alitalia [CAITLA.UL] this week.

Ryanair last month agreed to buy a majority stake in a new Austrian leisure airline founded by Formula One former champion Niki Lauda, while easyJet bought a parts of failed airline Air Berlin last year.

Shares in IAG initially dropped 3.4 percent on the news before recovering to trade down 0.7 percent at 611 pence. The company has a market capitalisation of about 12.6 billion pounds ($17.89 billion).

($1 = 7.7844 Norwegian crowns)

($1 = 0.7043 pounds)

(Reporting by Sarah Young, additional reporting by Terje Solsvik and Ole Petter Skonnord in OSLO and Victoria Bryan in BERLIN,; editing by Kate Holton and Adrian Croft)

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