No matter how you look at it Norwegian is desperately selling off the family silver to forestall a potentially disastrous winter as revenue drops.
With the forecast of a severe winter for Europe likely to impact flying and profits, the company has already sold its banking arm, its leasing arm is partly sold off and likely to go entirely. It’s also mortgaged its Gatwick airport landing slots to back up the debt bonds it’s supposed to repay in the next three years.
On top of that it’s 70 Airbus A320neo order is being slowly sold off to other airlines so they don’t have to pay for them. This week another 5 have been taken off Norwegian’s order list, though they’re not saying who bought them. It’s going to hold on to an additional 30 A321neoLR’s as it hopes to be able to use them one day.
The company is looking at $185m in losses from the Max saga, already posted losses of $170m for the first half of this year, and is unlikely to establish profitable trading through to the middle of 2020 if then.
Of course the Rolls Royce engine issue and the Max saga have been outside of the airlines control, but it’s indebtedness, it’s failure to expand in a structured and sensible way has been the core of its problems.
Add to that it’s bizarre financing, it’s random strategies and lack of cost control, it’s set itself up for potential failure.
Is it improving? The answer is overall, yes. But it’s slow and it’s minimal and I remain unconvinced it’s down enough to overcome its deep foundational issues.