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Bongodog1964
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 3:44 pm

Mortyman wrote:
It would surprise me if the ceo who is the majority owner and controls the company is interested in selling. Certainly not for the sum that is presented today.


My understanding is that the CEO is the largest shareholder and have seen a figure of 20.5% stated for his holding, that however is nowhere near a majority. if he were the majority holder IAG wouldn't be doing this as there would be zero chance of a hostile bid succeeding.

This seems to be another instance of the IAG vulture circling a potential corpse, last year it was the slots at LGW belonging to the defunct Monarch, previously it was the remains of BMI. Just recently they were unsuccessful in their bid for Lauda. They seem to prefer undervalued/poorly performing assets, rather than paying top price. Norwegian's well documented shortage of cash due to rapid expansion will put them into play, many investors will be happy to bank a profit on their holdings, certainly if they see little prospect of an imminent recovery of the share price.

Meanwhile IAG are in a win/win situation as they have already doubled their investment.
 
CX747
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 3:46 pm

Moves and counter moves. IF this were to occur, where would Norwegian and its fleet of 737-800s, 737-8s and 787-8/9s best fit? Dare I say a massive BA expansion?!?! The 787s fit right in and the 737 fleet is large enough to operate/grow a long side BA's A32X stable in a similar fashion to AA. Let's not forget the inbound A321s.
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dtw2hyd
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 3:50 pm

leghorn wrote:
I'm guessing that Norwegian LCC LH has hurt BA .


If I may rephrase, asking FSC fares for LCC service hurt BA. Also while everyone else trying to fend off ME3, WW was drinking their kool-aid and singing ME tunes.

Now reality set in and WW is looking for an LHLCC.

Also if IAG ever bids for Norwegian, both Lufthansa Group and SkyTeam will outbid.
 
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Mortyman
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 3:52 pm

Bongodog1964 wrote:
Mortyman wrote:
It would surprise me if the ceo who is the majority owner and controls the company is interested in selling. Certainly not for the sum that is presented today.


My understanding is that the CEO is the largest shareholder and have seen a figure of 20.5% stated for his holding, that however is nowhere near a majority. if he were the majority holder IAG wouldn't be doing this as there would be zero chance of a hostile bid succeeding.

This seems to be another instance of the IAG vulture circling a potential corpse, last year it was the slots at LGW belonging to the defunct Monarch, previously it was the remains of BMI. Just recently they were unsuccessful in their bid for Lauda. They seem to prefer undervalued/poorly performing assets, rather than paying top price. Norwegian's well documented shortage of cash due to rapid expansion will put them into play, many investors will be happy to bank a profit on their holdings, certainly if they see little prospect of an imminent recovery of the share price.

Meanwhile IAG are in a win/win situation as they have already doubled their investment.


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azz767
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 3:52 pm

[quote="ahj2000"]IF, however unlikely, the EU competition authorities approve a deal for total control over DY, I could see IAG, after scaling back the model a bit in the home markets of UK/Spain/Ireland, actually expanding the Norwegian model a bit further. Let's face it, Level is unnecessary, and Norwegian and\or Vueling takes over the longhaul at BCN/PAR.
A few other things they'd want to do: Spanish domestic market is scaled back to just IB/VY, PAR LCC operations combined at either ORY or CDG, scale-down of BA on lower-market routes like LGW-FLL/OAK while maintaining a presence on LGW markets they need to be in for colonial reasons, like BGI and NAS.
I also wonder how AY would react, as DY has a few dozen routes out of HEL, including domestic routes like Rovaniemi and Kittilä and money-making routes to the south.

Maybe Norwegian could teach IAG something about what shorthaul Y should look like ... :stirthepot:[/quote="ahj2000"]

NAS won't be leaving LHR. That route and the tag on the GCM always see's the front end full. Even since the 767's left and it got up-gauged to the 772, it has had no problem filling the front end. Although both in the Caribbean I wouldn't count either as mainly leisure destinations, especially GCM because we all know what goes on there.
 
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JetBuddy
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 3:59 pm

This acquisition would result in various benefits for IAG:

- Access to brand new aircraft - both widebody and narrowbody
- Elimination of LCC TATL competition, meaning increased revenue on existing long haul network which is the bread and butter for IAG
- Establishing a foothold in the lucrative Scandinavian and Nordic market
- Taking over troublesome competition in the Iberian market and possibly Iberia - LatAm
- Gain the means to fight Ryanair throughout Europe

If this goes through, I wonder if Lufthansa Group would become more interested in SAS again.
 
pabloeing
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:03 pm

¿How many B787 on order and options for Norwegian?
 
aviationaware
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:04 pm

Not a surprise. Norwegian is back to the wall financially and a nasty thorn in IAG's side in LGW and BCN. Not considering a takeover would be negligent by IAG management.
 
Arion640
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:06 pm

ro1960 wrote:
Arion640 wrote:
Would the competition commission of the EU allow a full merger?

This will not go down too well with LH group/Air france-KLM.


They're both currently bidding for AZ takeover...


So? They'll still cry out about it regardless of what's going on with AZ.
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WaywardMemphian
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:08 pm

Isn't it about time for Norwegian to start announcing new routes for 2019. I recall the likelihood of DEN and SEA to either MAD or BCN.

The Norwegian A321LRs due in 2019 would also help out any planned Aer Lingus TATL expansion. The 787s could be spread out. Some for contiued branding for Scandinavian mainland Western Europe flights, a switch to BA for more smaller market expansion in North America. It also helps with gaining any spoils to be had in Italy. Any tie in with new Air Italy possible?
 
mcdu
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:14 pm

WaywardMemphian wrote:
Isn't it about time for Norwegian to start announcing new routes for 2019. I recall the likelihood of DEN and SEA to either MAD or BCN.

The Norwegian A321LRs due in 2019 would also help out any planned Aer Lingus TATL expansion. The 787s could be spread out. Some for contiued branding for Scandinavian mainland Western Europe flights, a switch to BA for more smaller market expansion in North America. It also helps with gaining any spoils to be had in Italy. Any tie in with new Air Italy possible?


They serve DEN and SEA already. If this acquisition takes place the name NOrwegian and brand will disappear
 
f4f3a
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:23 pm

Could there be other bidders coming in ?
Would anyone else interested in buying the airline ?
 
WaywardMemphian
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:25 pm

mcdu wrote:
WaywardMemphian wrote:
Isn't it about time for Norwegian to start announcing new routes for 2019. I recall the likelihood of DEN and SEA to either MAD or BCN.

The Norwegian A321LRs due in 2019 would also help out any planned Aer Lingus TATL expansion. The 787s could be spread out. Some for contiued branding for Scandinavian mainland Western Europe flights, a switch to BA for more smaller market expansion in North America. It also helps with gaining any spoils to be had in Italy. Any tie in with new Air Italy possible?


They serve DEN and SEA already. If this acquisition takes place the name NOrwegian and brand will disappear


New destinations and it's hard to take any post from you on this subject seriously as you are very biased.
 
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JerseyFlyer
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:50 pm

Does Norwegian actually own any aircraft or are they all leased?
 
Andy33
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 4:52 pm

Bongodog1964 wrote:
Meanwhile IAG are in a win/win situation as they have already doubled their investment.


And if they see no prospect of obtaining outright control, they sell the shares they already own (having made further purchases on a "subject to obtaining outright control and regulatory approval" basis which is quite normal). Once it becomes known they have done this, the share price will likely fall back to below where it was before IAG started buying, and that might trigger a complete collapse of confidence in Norwegian in financial circles. If you can't control it, destroy it?
 
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Mortyman
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 5:06 pm

JerseyFlyer wrote:
Does Norwegian actually own any aircraft or are they all leased?



it's a mix of owned and leased aircraft, but yes they own alot of aircraft
 
DarthLobster
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 5:06 pm

evank516 wrote:
downdata wrote:
If in doubt, buy out your competition :)


See AS/VX ;)


Dead wrong as usual. VX wasn’t enough of a competitor to AS to justify the price.
 
mcdu
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 5:38 pm

WaywardMemphian wrote:
mcdu wrote:
WaywardMemphian wrote:
Isn't it about time for Norwegian to start announcing new routes for 2019. I recall the likelihood of DEN and SEA to either MAD or BCN.

The Norwegian A321LRs due in 2019 would also help out any planned Aer Lingus TATL expansion. The 787s could be spread out. Some for contiued branding for Scandinavian mainland Western Europe flights, a switch to BA for more smaller market expansion in North America. It also helps with gaining any spoils to be had in Italy. Any tie in with new Air Italy possible?


They serve DEN and SEA already. If this acquisition takes place the name NOrwegian and brand will disappear


New destinations and it's hard to take any post from you on this subject seriously as you are very biased.


And you are unbiased?
 
mcdu
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 5:39 pm

Mortyman wrote:
JerseyFlyer wrote:
Does Norwegian actually own any aircraft or are they all leased?



it's a mix of owned and leased aircraft, but yes they own alot of aircraft



The huge asterisks * to the “owner” aircraft is that they are leveraged to the hilt. They all are pledged as collateral for loans to the keep the lights on.
 
armchairceonr1
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 5:41 pm

mcdu wrote:
The huge asterisks * to the “owner” aircraft is that they are leveraged to the hilt. They all are pledged as collateral for loans to the keep the lights on.

Yeah, they "own" about half of their fleet but all of those owned is collateral for loans. I think they own even one pen, which is not collateral to someone. :D
 
Nola
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 5:49 pm

Arion640 wrote:
ro1960 wrote:
Arion640 wrote:
Would the competition commission of the EU allow a full merger?

This will not go down too well with LH group/Air france-KLM.


They're both currently bidding for AZ takeover...


So? They'll still cry out about it regardless of what's going on with AZ.


Reports indicated that LH was bidding for AZ but that AF/KLM were not.

Would KLM be interested in DY, though? The AF side would of the company would probably be blocked from doing anything by union contracts, but would KLM be able to act? Or would some new entity need to be created (likely owned by DL, AF/KLM and China Eastern?)
 
WaywardMemphian
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 5:50 pm

mcdu wrote:
WaywardMemphian wrote:
mcdu wrote:

They serve DEN and SEA already. If this acquisition takes place the name NOrwegian and brand will disappear


New destinations and it's hard to take any post from you on this subject seriously as you are very biased.


And you are unbiased?


I've got zero skin in the game. I want choices and opportunities for all income earners to see the world and it be as easy as possible(more direct travel to starting points) I could care less about union loyalties or airline loyalties or aircraft manufacturer loyalties, just opportunities.

You are outright hostile.
 
Airlinerdude
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:26 pm

Such an acquisition could make strategic sense for IAG. I could see IAG consolidating the Norwegian Long Haul operation with Level, and expanding its presence to other airports within Spain & the UK where BA/Iberia's cost structure would be too high to consider operating from. Greater expansion from BHX, EDI, MAN, STN, NCL are all airports that come to mind, where an effective lower cost long haul model could be used to stimulate traffic, and regain marketshare lost to competitors. Inevitably BA would then give up a couple of its routes, OAK/LAS/... that it directly competes with Norwegian and use freed planes to expand elsewhere. BA/DY/DI could then upgrade from the cheaper brand DY/DI to the more premium brand BA, as traffic grows or business traffic is stimulated; think a la AC/RV in Canada.

Admittedly I briefly skimmed the consolidated (unaudited) Norwegian financials for FY2017, and noticed that the Norwegian brand does generate an operating profit, while its largest expenses that contribute to is net loss are both non-cash: depreciation and impairment. Without much investigation this suggests to me that it must own a significant bunch of its aircraft, causing the large depreciation expense. With an IAG ownership, this non-cash expense will be swallowed up in the rest of the brand and future financing structures, perhaps operating leases, could be looked at in the future. Norwegian's cash flow position is also not as bad as I had been lead out to believe as well, they have a positive operating cash flow, but a large deficit in the investing activities of the business - notably due to aircraft acquisitions.

If nothing else from this expansion, IAG could gauge the rate of Norwegian's expansion, erase any competing routes driving down yields, and repurpose future 787 deliveries into the BA brand. Also, this gives IAG a huge (supposedly profitable? &) well-known LCC operating within Europe to take on Ryanair/EasyJet/etc. which the importance of is something I don't think needs to be elaborated on much.
Last edited by Airlinerdude on Thu Apr 12, 2018 6:25 pm, edited 3 times in total.
 
f4f3a
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:30 pm

I think DY and U2 or FR could be very interesting combination that could provide a real challenge to the big three in Europe
 
travelhound
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:32 pm

DL747400 wrote:
travelhound wrote:
Norwegian, if sold will go for a premium. It has scale, a strong presence in key growth markets, a very competive cost base and a strong mix of good quality aircraft. It would take years for an airline to create an airline of this size


Funny how you left out the fact that Norwegian is not generating a profit.

My first thought would be let them run out of cash, cease operations and strand thousands of people to (further) ruin the brand reputation.

But this latest move by IAG may be the smarter move. Acquire Norwegian, dismantle their network, redeploy their fleet and all the while prevent a LCC / ULCC competitor from acquiring Norwegian to continue to expand their business model.


Norwegian is suffering in the same way the Asian LCC's suffered in the 2010's. Too much capacity, too quickly!

If we look back now, we know the market was there. It was just a matter of the market need ing to catch up with the change that was happening.

As such this could be an issue of time rather than business model.
Last edited by travelhound on Thu Apr 12, 2018 6:41 pm, edited 1 time in total.
 
airzona11
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:32 pm

What if IAG is bidding because there are other parties that have bid and BA wants to throw a wrench in those plans?
 
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flyingclrs727
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:35 pm

So if IAG is going to buy Norwegian, will Norwegian still be flying LGW-AUS when British Airways is flying a 747-400? LHR-AUS?
 
travelhound
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:39 pm

armchairceonr1 wrote:
mcdu wrote:
The huge asterisks * to the “owner” aircraft is that they are leveraged to the hilt. They all are pledged as collateral for loans to the keep the lights on.

Yeah, they "own" about half of their fleet but all of those owned is collateral for loans. I think they own even one pen, which is not collateral to someone. :D


Typically a narrow body aircraft will generate enough profits to pay for itself within a 3-7 year timeframe.

As such, and we have seen this before (VA), there is more value in having a segment in the market, than owning the aircraft that flies it!

In this instance, from a liquidity perspective, Norwegian is flying fairly close to the wind! They may have pushed the boundaries too far!
Last edited by travelhound on Thu Apr 12, 2018 6:43 pm, edited 1 time in total.
 
Andy33
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:41 pm

flyingclrs727 wrote:
So if IAG is going to buy Norwegian, will Norwegian still be flying LGW-AUS when British Airways is flying a 747-400? LHR-AUS?


BA are flying a 747 on LHR-AUS for this summer. It goes back to a 787 for winter 2018/19. Who knows how long it would take for IAG to acquire control of Norwegian, and indeed if they'll succeed in doing so. We can be quite certain that route changes wouldn't affect this summer's timetable which has after all already started.
 
Oykie
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:41 pm

JetBuddy wrote:
This acquisition would result in various benefits for IAG:

- Access to brand new aircraft - both widebody and narrowbody
- Elimination of LCC TATL competition, meaning increased revenue on existing long haul network which is the bread and butter for IAG
- Establishing a foothold in the lucrative Scandinavian and Nordic market
- Taking over troublesome competition in the Iberian market and possibly Iberia - LatAm
- Gain the means to fight Ryanair throughout Europe

If this goes through, I wonder if Lufthansa Group would become more interested in SAS again.


I have been asking myself the same question. If IAG are successful in buying Norwegian, then Lufthansa may be more interested in buying SAS.

Then we have AF/KLM with partner Delta. Suddenly Scandinavian and Nordic marked may be bought up.
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JerseyFlyer
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:54 pm

travelhound wrote:
armchairceonr1 wrote:
mcdu wrote:
The huge asterisks * to the “owner” aircraft is that they are leveraged to the hilt. They all are pledged as collateral for loans to the keep the lights on.

Yeah, they "own" about half of their fleet but all of those owned is collateral for loans. I think they own even one pen, which is not collateral to someone. :D


Typically a narrow body aircraft will generate enough profits to pay for itself within a 3-7 year timeframe.

As such, and we have seen this before (VA), there is more value in having a segment in the market, than owning the aircraft that flies it!

In this instance, from a liquidity perspective, Norwegian is flying fairly close to the wind! They may have pushed the boundaries too far!


If IAG translate this initial move into a full blown acquisition, it does not follow that they will need all Norwegian's aircraft. They may return some to lessors, or sell others to pay down debts.
 
WaywardMemphian
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 6:54 pm

flyingclrs727 wrote:
So if IAG is going to buy Norwegian, will Norwegian still be flying LGW-AUS when British Airways is flying a 747-400? LHR-AUS?


The influx of 787s would speed up the phasing out of the of the 747s.
 
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flyingclrs727
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 7:09 pm

WaywardMemphian wrote:
flyingclrs727 wrote:
So if IAG is going to buy Norwegian, will Norwegian still be flying LGW-AUS when British Airways is flying a 747-400? LHR-AUS?


The influx of 787s would speed up the phasing out of the of the 747s.


BA's 747's aren't going to the boneyard that quickly. They have a rather high proportion of premium seats, so they can handle large numbers of corporate track while simultaneously having large numbers of Y seats to compete against low cost carriers. BA still has the advantage of flying to LHR where there are many more connection opportunities than LGW.
 
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Revelation
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 7:12 pm

JerseyFlyer wrote:
If IAG translate this initial move into a full blown acquisition, it does not follow that they will need all Norwegian's aircraft. They may return some to lessors, or sell others to pay down debts.

Why would IAG cut the most efficient aircraft being flown by the cheapest pilots and crews?

I'd expect them to cut the least efficient aircraft being flown by the most expensive pilots and crews instead.
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WaywardMemphian
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 7:15 pm

Andy33 wrote:
flyingclrs727 wrote:
So if IAG is going to buy Norwegian, will Norwegian still be flying LGW-AUS when British Airways is flying a 747-400? LHR-AUS?


BA are flying a 747 on LHR-AUS for this summer. It goes back to a 787 for winter 2018/19. Who knows how long it would take for IAG to acquire control of Norwegian, and indeed if they'll succeed in doing so. We can be quite certain that route changes wouldn't affect this summer's timetable which has after all already started.


Which is why I wondered about when Norwe Gian would start up Summer 2019 route announcements.

Boeing isn't going to stop sending them 787s and Max 8s and Airbus will be delivering A321LRs soon. I see Airbus allowing them to kick the A320 delivery can down the road considering their backlog there.
 
WaywardMemphian
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 7:19 pm

flyingclrs727 wrote:
WaywardMemphian wrote:
flyingclrs727 wrote:
So if IAG is going to buy Norwegian, will Norwegian still be flying LGW-AUS when British Airways is flying a 747-400? LHR-AUS?


The influx of 787s would speed up the phasing out of the of the 747s.


BA's 747's aren't going to the boneyard that quickly. They have a rather high proportion of premium seats, so they can handle large numbers of corporate track while simultaneously having large numbers of Y seats to compete against low cost carriers. BA still has the advantage of flying to LHR where there are many more connection opportunities than LGW.


One BA branded premium heavy to Heathrow, one LCC configured branded to Level to Gatwick. Might allow for enhancing the rep BA is getting a bit banged on lately

Then there is the addition of the Monarch gates plus Norwegian's at Gatwick to help build the LCC connecting network.
Last edited by WaywardMemphian on Thu Apr 12, 2018 7:21 pm, edited 1 time in total.
 
avek00
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 7:19 pm

airzona11 wrote:
What if IAG is bidding because there are other parties that have bid and BA wants to throw a wrench in those plans?


I think this is closer to the truth. IMHO IAG does not want to acquire Norwegian, and it doesn't want Norwegian to remain a standalone nuisance.
Live life to the fullest.
 
BHXLOVER
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 7:20 pm

Mortyman wrote:
It would surprise me if the ceo who is the majority owner and controls the company is interested in selling. Certainly not for the sum that is presented today.


Maybe his bankers will whisper in his ear?
 
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Revelation
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 8:47 pm

avek00 wrote:
airzona11 wrote:
What if IAG is bidding because there are other parties that have bid and BA wants to throw a wrench in those plans?


I think this is closer to the truth. IMHO IAG does not want to acquire Norwegian, and it doesn't want Norwegian to remain a standalone nuisance.

Norwegian has a TATL operation up and running with all the paperwork that allows them use EU flags of convenience to penetrate the US market with job-shopper pilots and crews at price points that are very low. I can see IAG wanting to acquire that. In fact I can see why they have an imperative to acquire that.

https://www.reuters.com/article/us-norw ... SKBN1HJ2X1 says:

Norwegian’s plan to bring the low-cost model that has proven so successful on short-haul routes in Europe to flights across the Atlantic has affected IAG’s British Airways more than other carriers in Europe because Norwegian has targeted flying from Britain in particular.

Analysts estimate British Airways makes the majority of its profit on North Atlantic routes and alliances between established carriers on both sides of the Atlantic have for years helped to protect prices more than in other regions.

The more I think about this, the more it feels like an imperative on the part of the TATL Cartel to protect its margins.
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BlueShamu330s
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:15 pm

Revelation wrote:
The more I think about this, the more it feels like an imperative on the part of the TATL Cartel to protect its margins.


You make defending your margins sound like something dirty or wrong. Last time I looked, fares have fallen in real terms constantly ever since the jet engine was invented.

When your latest competition is a newcomer trading on dubious accounting practices, falsely dampening fares and yields in an attempt to create demand and eventual profit, it is clear to anyone other than those who see Norwegian as the low cost long haul Messiah that something has to break.

I was banking on an oil spike. Seems IAG have blinked sooner. You can't blame them; after all, they've been lambasted for cutting their service levels in an attempt to bring fares down to match Norwegian.

Going on the offensive is a natural next step.
Flying around India
 
SelseyBill
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:28 pm

dtw2hyd wrote:
Norwegian should buy IAG, or at least management of merged group should be transferred to Norwegian. Otherwise, Willy will cut Norwegian service level further, hard to imagine.


....just don't agree with that analysis.

WW may be lots of things, but he isn't stupid. He's seen the low-cost L/H model expanding with DY, and I suspect WW is jealous of DY's very low cost base, compared to his 'legacy' carriers. If IAG do gain a majority shareholding in DY, I suspect he will leave DY well alone and keep it profitable with existing separate operations, branding and management. LEVEL is only a paper airline at present, so merging LEVEL & Norwegian should be straightforward; just re-name the Orly operation 'Norvierge-Francais' or similar.

DY could certainly benefit from IAG's economies of scale and purchasing power. DY seem to be suffering from cash-flow and CAPEX gearing problems, both of which IAG can mitigate significantly. He could certainly use DY as a 'Trojan horse' to get stuck into and expand IAG presence in the Dutch, French and German markets, which must be a very attractive proposition to IAG.

Some folks here are suggesting that IAG's plethora of brands and service standards across Europe is a problem for IAG, but I believe it to be a strength.
 
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ro1960
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:28 pm

Arion640 wrote:
ro1960 wrote:
Arion640 wrote:
Would the competition commission of the EU allow a full merger?

This will not go down too well with LH group/Air france-KLM.


They're both currently bidding for AZ takeover...


So? They'll still cry out about it regardless of what's going on with AZ.


I'm not arguing, you seem to know what you're talking about. I'm just mentioning the info.
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ro1960
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:36 pm

Nola wrote:
Reports indicated that LH was bidding for AZ but that AF/KLM were not.


Apparently "EasyJet Plc, Air France-KLM Group and Cerberus Capital Management LP have made a joint approach to the Italian airline Alitalia SpA about a possible takeover"

https://skift.com/2018/04/10/easyjet-and-air-france-klm-eye-takeover-of-troubled-airline-alitalia/

None of the three confirmed, though.
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Galwayman
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:37 pm

f4f3a wrote:
I think DY and U2 or FR could be very interesting combination that could provide a real challenge to the big three in Europe



FR is the big one in EU, IAG , AF, and LH are smaller already
 
Galwayman
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:41 pm

EU will be happy to wave this through with remedies, they allowed the LH Air Berlin stitch up

The real story may lie in the remedies , bits that have to sold off ....
 
airzona11
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:43 pm

BlueShamu330s wrote:
=
When your latest competition is a newcomer trading on dubious accounting practices, falsely dampening fares and yields in an attempt to create demand and eventual profit, it is clear to anyone other than those who see Norwegian as the low cost long haul Messiah that something has to break.
=.


Don't airlines already do that with airlines within an airline and regional carriers? Competition brings creative destruction, the consumer should be the winner in all this. There is no reason to think BA/legacies will be the only game in town. That is why I think there might be some other parties involved to go after Norwegian and BA might just be playing the role of spoiler. But I also see why their network would be a great fit for BA. Reality is they might just buy them to shut them down and acquire any assets in the process.
 
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Polot
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 9:47 pm

Galwayman wrote:
EU will be happy to wave this through with remedies, they allowed the LH Air Berlin stitch up

The real story may lie in the remedies , bits that have to sold off ....

Yes BA/IB are euro legacies... they get special treatment. Unless the EU wants to play hardball because of Brexit.
 
LAXLHR
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Re: IAG Looking into buying Norwegian

Thu Apr 12, 2018 9:59 pm

LupineChemist wrote:
This is definitely a surprise development.

Helpful for their UK AOC for activity after Brexit.

There might be some serious competition issues, particularly within Spain. It could also be a bit of a shot across the bow at the Finnish government saying that if they won't let IAG buy AY, then they will compete directly against them.

The 787 order book could be a big help for growing EI and IB (if willing to break the all Airbus fleet).


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BA JM EA GK QH PA VS AA SN HP CO W7 WN NW DL QQ UA AC US LH LX OS JL QF QR PG MH CX U2 EK 9W UK TP VY VN PC LO OK OZ UL SQ

707 727 L10 732-NG 741 742 743 744 752 753 762 763 772 773 787 DC8 DC9 DC10 M80 M11 100 AB3 310 318 319 320 321 332 333 342 343 380
 
Waterbomber
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 10:16 pm

I think that IAG is the right candidate to take over DY. DY short haul can be maintained, long haul could be split. Whatever low cost makes sense and money would be maintained, the rest of the capacity could be sent East, either under the BA or Norwegian brand, depending on what makes sense.
DY Argentina could be developed to serve as feeder for IB but also BA and AA.

Anti-trust wise, the EU will have little to say about UK TATL, as for intra-EU there is almost no overlap. Some overlap here and there but most likely some shelving will see VY come out ahead in Southern Europe. Also, considering how much LH was allowed to swallow with little to no consequences, this should pass with flying colors.

About the price.
3 billion USD quoted above is too much for a controlling stake.
The market capital is 1.2 billion USD, I don't know how much of it is floated, but that should be sufficient for IAG to gain control. It doesn't make sense to buy the whole thing and take on the entire debt pile, control is sufficient.

DY has no choice but to sell and I doubt that there will be a premium. IAG can walk away tomorrow with a 45% trading profit if the DY shareholding is not receptive and announce that take-over talks had been rejected, sending DY up into an early demise.
The creditors will force Kos to sell out. Even if he doesn't, other shareholders will sell enough to give IAG effective control. The creditors have enough leverage to make it happen.

Defensive move to protect BA TATL, but there is something there too for the entire group. Among others, B787 and A321LR delivery slots. A lot of pieces are useful and IAG would probably love to own a LCC unit in Northern Europe.
 
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Revelation
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Re: IAG considering placing a bid for Norwegian

Thu Apr 12, 2018 11:29 pm

BlueShamu330s wrote:
You make defending your margins sound like something dirty or wrong.

I definitely get your point. I guess I root so much for an underdog to come along and shake up the TATL Cartel that I'm willing to overlook a lot. I definitely appreciate your points about how far DY is from being a Messiah I'm not to the point of cheering their self-immolation but I understand those who do.

BlueShamu330s wrote:
Last time I looked, fares have fallen in real terms constantly ever since the jet engine was invented.

I wish the argument was as simple as that, but I don't want to take us down that path.
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