O’leary claims Norwegian “Running out of cash”. Scaremongering or a whiff of truth?

Michael O’Leary the CEO of RyanAir is no stranger to rash statements or controversy, Over the last couple of years his PR and management teams found they were better off if he kept quiet on passenger related issues – especially anything to do with RyanAir services, and RyanAir’s public image improved as a result. It hasn’t stopped him weighing in on industry issues in general.

Sometimes he’s right and often he’s wrong. But this time he may have seen what I’ve been saying all along; Norwegian’s business model and figures just do not add up.

The difference is when he says it Norwegian’s stock price falls 10% as it did September 5th when he said the were scrambling about for cash anywhere they could get it.

He also claimed Monarch was also at the brink – something hotly denied by its CEO. Monarch is owned by Greybull Capital. However, it’s about to write off a huge amount of money on old lease debts.

He also weighed in on the fact that massive consolidation was inevitable as more and more European Airlines struggle. He sees the three big Groups, Lufthansa Group, AF-KLM and IAG as the only survivors with RyanAir and possibly easyJet. However he forecast that they would end up bought out by AF-KLM. Seeing as AF-KLM had to get Delta to buy part of them to give them the money to buy prat of Virgin to work with Delta, I doubt they could even begin to work with that scenario.

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