Süddeutsche Zeitung: Lufthansa considering bid on Norwegian

Lufthansa is currently considering a possible acquisition of Norwegian, reports the German newspaper Süddeutsche. The Norwegian share rises nine percent on the stock exchange.

The German newspaper Süddeutsche Zeitung writes that German Lufthansa is currently considering a possible acquisition of Norwegian. Lufthansa boss Carsten Spohr says to the newspaper:

- There is a new consolidation wave in the works. This means that we are also in contact with Norwegian, says Spohr.

The Norwegian share rises immediately after opening hours on the stock exchange. At the time of writing, the stock is up nine percent.

Norwegian announced in a stock exchange announcement last week that the company has received interest from several parties and that no binding request from IAG has been received.

At the same time, the airline says that it can not be guaranteed that a transaction will be realized even with attractive terms or at all.

In the announcement published by the airline last week, it is emphasized that Norwegian has not entered into any agreements or specific conversations related to the interests of the various parties. Norwegian further seeks information and clarification in several areas to evaluate the proposals and determine if they form the basis for entering into talks.

https://www.dn.no/nyheter/2018/06/18/08 ... -norwegian

http://www.sueddeutsche.de/wirtschaft/f ... -1.4020118

There are many more interesting parts in that SZ Monday interview with Mr. Spohr. Like re-locatting further A346s. to Munich and Fitting the MUC A346 fleet with F cabins. These then replace A333 whoich go to FRA or to EUW. He did not mention numbers but they just have exchanged5 A880 to MUC replaced at FRA by an equal number of A346s. Might be that some of the 346s re-enter Service fro storage.

Spohr still Claims that FRA is a high cost Airport and MUC has lower costs Overall which is the reason that LH diverts Transfer traffic from FRA to MUC.

Still, the monthly figures do not Support that, MUC grows much less than FRA, even when the FR effect is taken out. May saw an increase in Pax volume at FRA of 9,7 % of which more than half came from LH.

Some mysteries to be solved, including the interesting Norwegian Saga. Spohr's remark: Everyboday in Europe talks to everybody in Europe.

I for one would love to see them merge Eurowings and Norwegian.
2 unprofitable directionless vanity projects merging... What could go wrong?

it's still very fascinating that DY didn't really touch LHGroup home markets DE/CH/AT/BE (especially on longhaul) and yet there is this idea of take-over.
kinda like "buy them before they come"

the fleetmix would be quite amazing as well since DY is all Boeing and EW almost all Airbus

Norwegian:
DY - 51x 738
D8 - 71x 738
DU - 15x 788
Total 137 aircraft

Eurowings:
EW -
29x 319 (partly opby LGW)
46x 320
8x 332 (opby XQ and SN)
2x 343 (opby SN)
2x 738 (opby X3)
20x DH8 (opby LGW)
E2 -
6x 319
6x 320
Total 119 aircraft

(hope I didn't miss any...)

Hmmm bidding war with IAG, anyone?

Just me, or doesn't Norwegian seem like a bad fit into the LH Group? Only benefit for LH Group is to buy a competitor out cheaply?

They just want to look into the books of DY. And increase the price for IAG.

stylo777 wrote:

it's still very fascinating that DY didn't really touch LHGroup home markets DE/CH/AT/BE (especially on longhaul) and yet there is this idea of take-over.
kinda like "buy them before they come"

the fleetmix would be quite amazing as well since DY is all Boeing and EW almost all Airbus

Norwegian:
DY - 51x 738
D8 - 71x 738
DU - 15x 788
Total 137 aircraft

Eurowings:
EW -
29x 319 (partly opby LGW)
46x 320
8x 332 (opby XQ and SN)
2x 343 (opby SN)
2x 738 (opby X3)
20x DH8 (opby LGW)
E2 -
6x 319
6x 320
Total 119 aircraft

(hope I didn't miss any...)

Norwegian also have Airbus A321LR on order + heaps of Airbus 320neo for their leasing company

I always thought that LH would be better candidate to buy DY than IAG. LH was interested in SAS for a long time but decided not to buy. With Norwegian they would have finally put their foot in the Scandinavian market . Integrating Norwegian into the Eurowings Group is way easier than turn SAS profitable.
Regarding the fleet:
LH has operated a mixed 737/A320 fleet for years. Other airline do so as well and the fleet size of each type is big enough. If one airline can make it work it is LH. Eurowings A330 have to be replaced at some point and the 787 would make sense size wise.

The Eurowings idea was to built up an intra-European P2P and Longhaul P2P carrier. It's probably an advantage that their markets are not overlapping.

Buying Norwegian would give them access to LGW, BCN, ORY, FCO, CPH, ARN ...

I agree with the B 787 being the ideal aircraft to harmonize the future EW longhaul fleet, replacing the often AOG A 332 opb. XG. With 100+ B 737 it should not be a problem for a sub-fleet. Plus they could take advantage of the A 320 / A 321 (LR) order.

And definitely way less stress than intregrating AZ & SK with their unions ...

vhtje wrote:

Hmmm bidding war with IAG, anyone?

Just boost Norwegian shares into being too expensive for IAG ?

He has since come back and said that he is talking to everyone at the moment.

9% share rise on this is good money after bad.

how easy (or difficult for that matter) would be a takeover of Norwegian since some have been stating the hassles of unions with SK or AZ?
what are the requirements for LH and how much would the price tag showing?

The largest airlines in Europe

... and Norwegian and SAS.


Company: RYANAIR
Headquarters: Ireland
Stock value in millions of NOK: 173 838

Company: IAG
Headquarters: United Kingdom
Stock value in millions of NOK: 156 634

Company: LUFTHANSA GROUP
Headquarters: Germany
Stock value in millions of NOK: 102 188

Company: Air France - KLM
Headquarters: France
Stock value in millions of NOK: 28 764



Company: NORWEGIAN
Headquarters: Norway
Stock value in millions of NOK: 12 109

Company: SAS
Headquarters: Sweden
Stock value in millions of NOK: 6 489

https://www.dn.no/nyheter/2018/06/18/08 ... -norwegian

Zaf wrote:

They just want to look into the books of DY. And increase the price for IAG.

Sounds pretty believable to me. It would be interesting to see just how LH squared the EU competition authorities if they did actually buy Norwegian.

cityshuttle wrote:

The Eurowings idea was to built up an intra-European P2P and Longhaul P2P carrier. It's probably an advantage that their markets are not overlapping.

Buying Norwegian would give them access to LGW, BCN, ORY, FCO, CPH, ARN ...

I agree with the B 787 being the ideal aircraft to harmonize the future EW longhaul fleet, replacing the often AOG A 332 opb. XG. With 100+ B 737 it should not be a problem for a sub-fleet. Plus they could take advantage of the A 320 / A 321 (LR) order.

And definitely way less stress than intregrating AZ & SK with their unions ...

The 737s could actually become the backbone of the short-haul fleet for EW. Older Airbus narrowbodies could be retired while newer Airbus narrowbodies could be transferred elsewhere within the LH Group (plus SunExpress Deutschland).

Also of note is that in the MAX fleet, Norwegian has elected to go with the Telair ULD system on its MAX 8 fleet and that could be retrofitted onto the B738 fleet.

The eight B788s could be used for CityLine use while the B789s would be for Eurowings, while Austrian's longhaul operations could be transitioned to Eurowings as well (with reduced destinations) since their long-haul planes are aging. The A321LRs would likely have the best usage in the group with Brussels Airlines' western Africa network, allowing triangle routes to be split with dedicated terminator services, and freeing up planes for deeper Africa destinations in Angola, Rwanda, Uganda, and the Democratic Republic of the Congo. (For Brussels Airlines though, these don't even need to be A321LRs, just regular A321neos to serve western Africa destinations).

This is in addition to slots at other airports, even though I suspect that divestitures may be required at Gatwick. The North American destinations would then be carefully rationalized.

stylo777 wrote:

it's still very fascinating that DY didn't really touch LHGroup home markets DE/CH/AT/BE (especially on longhaul) and yet there is this idea of take-over.

Because of this they complement each other and there are less problems with the regulators. In a sense LH+DY looks a better fit than IAG+DY.

Not that I endorse massive consolidation, but that is to happen.

If that merger takes place SK has to face some existential questions. At least, should it change to SkyTeam?

Waterbomber wrote:

I for one would love to see them merge Eurowings and Norwegian.
2 unprofitable directionless vanity projects merging... What could go wrong?

Eurowings is not even remotely in the same league as Norwegian financially. They have a way better footing. Norwegian is a train wreck waiting to happen. Zero chance of survival on their own. I'd advise Lufthansa to keep their mitts away.

If LH takes over DY it makes logic SAS will be taken over by IAG... EU might be worried about the size of LH Group ? Another issue is that members of Star Alliance do not compete within other members home land... LH cannot make long haul out of Stockholm or Copenhagen and SAS cannot start routes out Berlin or Dusseldorf... If LH will buy DY it brings things into a grey zone of understanding..

stylo777 wrote:

it's still very fascinating that DY didn't really touch LHGroup home markets DE/CH/AT/BE (especially on longhaul) and yet there is this idea of take-over.
kinda like "buy them before they come"

the fleetmix would be quite amazing as well since DY is all Boeing and EW almost all Airbus

Norwegian:
DY - 51x 738
D8 - 71x 738
DU - 15x 788
Total 137 aircraft

Eurowings:
EW -
29x 319 (partly opby LGW)
46x 320
8x 332 (opby XQ and SN)
2x 343 (opby SN)
2x 738 (opby X3)
20x DH8 (opby LGW)
E2 -
6x 319
6x 320
Total 119 aircraft

(hope I didn't miss any...)

Slight correction - Norwegian has 789's not 788's

aviationaware wrote:

Eurowings is not even remotely in the same league as Norwegian financially.[...]

Correct! I just looked up the figures and copied and pasted them. Norwegian's debt equals an astronomical amount of 6.6 bn Euros. That's very close to the sums the big US carriers owed their debitors when they went belly up. At the other side, the whole Lufthansa Group's net debt had been 2.884 bn Euros with a revenue of 35.579 bn Euros. Net profit had been 2.364 bn Euros. As of December 31st 2017, that is.

columba wrote:

Integrating Norwegian into the Eurowings Group is way easier than turn SAS profitable.

SAS is profitable and has been for some time now

ER757 wrote:

stylo777 wrote:

it's still very fascinating that DY didn't really touch LHGroup home markets DE/CH/AT/BE (especially on longhaul) and yet there is this idea of take-over.
kinda like "buy them before they come"

the fleetmix would be quite amazing as well since DY is all Boeing and EW almost all Airbus

Norwegian:
DY - 51x 738
D8 - 71x 738
DU - 15x 788
Total 137 aircraft

Eurowings:
EW -
29x 319 (partly opby LGW)
46x 320
8x 332 (opby XQ and SN)
2x 343 (opby SN)
2x 738 (opby X3)
20x DH8 (opby LGW)
E2 -
6x 319
6x 320
Total 119 aircraft

(hope I didn't miss any...)

Slight correction - Norwegian has 789's not 788's

Well, correction of correction: they have actually both variants

Interesting this interest in DY. First BA and now LH. I guess a revival of the legacy airlines or they are indeed worried about this expansion into the long haul marked.

AAR wrote:

If LH takes over DY it makes logic SAS will be taken over by IAG... EU might be worried about the size of LH Group ? Another issue is that members of Star Alliance do not compete within other members home land... LH cannot make long haul out of Stockholm or Copenhagen and SAS cannot start routes out Berlin or Dusseldorf... If LH will buy DY it brings things into a grey zone of understanding..

I truly dont understand the logic behind your post.
Why is IAG forced to buy SAS if LH takesover DY?!?

And regarding the Star comment: at the end of the day every airline is responsible of its own profitability. This in return doesnt exclude any of the member airlines to start flights from particular destinations. AFAIK, there isnt any non-compete clause in place; in fact, not all member airlines are cozy with each other. Another example: TK has an extremely strong presence in Germany serving almost all commercial airports from/to various Turkish destinations (but of course mainly to IST). One would think that LH/TK would collaborate between both countries and beyond and yet, they dont even have a codeshare in place. At one point former CEO's p*ed off each other and since then both are more like opponents than partners. That was the short version of a long story, but you get the point I guess.

stylo777 wrote:

it's still very fascinating that DY didn't really touch LHGroup home markets DE/CH/AT/BE (especially on longhaul) and yet there is this idea of take-over.
kinda like "buy them before they come"

the fleetmix would be quite amazing as well since DY is all Boeing and EW almost all Airbus

Norwegian:
DY - 51x 738
D8 - 71x 738
DU - 15x 788
Total 137 aircraft

Eurowings:
EW -
29x 319 (partly opby LGW)
46x 320
8x 332 (opby XQ and SN)
2x 343 (opby SN)
2x 738 (opby X3)
20x DH8 (opby LGW)
E2 -
6x 319
6x 320
Total 119 aircraft

(hope I didn't miss any...)

Well …

DY: 51 Boeing 737-800
DU: 8 Boeing 787-8 and 7 Boeing 787-9
D8: 64 Boeing 737.800 and 7 Boeing 737- MAX 8
DI: 1 Boeing 737.800 and 14 Boeing 787-9
DN: 1 Boeing 737.800

These are the ones in service. They have more on order

AAR wrote:

If LH takes over DY it makes logic SAS will be taken over by IAG... EU might be worried about the size of LH Group ? Another issue is that members of Star Alliance do not compete within other members home land... LH cannot make long haul out of Stockholm or Copenhagen and SAS cannot start routes out Berlin or Dusseldorf... If LH will buy DY it brings things into a grey zone of understanding..

Given AA, BA, IB and AY have a metal neutral JV across the Atlantic, what value does SAS give them? Atlantic is covered well. AY has East Asia sewn up well and codeshares with the others and BA flies to most major cities already.

I don't see any reason why IAG wants to get their hands into SAS. Low gain move, IMO.

AAR wrote:

If LH takes over DY it makes logic SAS will be taken over by IAG... EU might be worried about the size of LH Group ? Another issue is that members of Star Alliance do not compete within other members home land... LH cannot make long haul out of Stockholm or Copenhagen and SAS cannot start routes out Berlin or Dusseldorf... If LH will buy DY it brings things into a grey zone of understanding..

This would likely be Eurowings, which would not be in Star Alliance. However, while similar markets are served, it's not always the same airport. For instance, Scandinavian services in the NYC market for DY fly to JFK, while SAS only serves EWR. Likewise, in the Bay Area, SK flies to SFO and DY to OAK. There would be issues related to markets like Los Angeles, Boston, and Chicago though.

Waterbomber wrote:

I for one would love to see them merge Eurowings and Norwegian.
2 unprofitable directionless vanity projects merging... What could go wrong?

Yes, that would be quite the interesting merger for sure...

aviationaware wrote:

Waterbomber wrote:

I for one would love to see them merge Eurowings and Norwegian.
2 unprofitable directionless vanity projects merging... What could go wrong?

Eurowings is not even remotely in the same league as Norwegian financially. They have a way better footing. Norwegian is a train wreck waiting to happen. Zero chance of survival on their own. I'd advise Lufthansa to keep their mitts away.

You are right, DY is a bigger train wreck than EW.
Still, their business models are very similar. Point to point long haul, operationally a mess, financially non-viable. Short haul profitable or at least stable.
Both trying to grow into profitability, chasing the oasis in the desert.
Wow Air is similar.

What all these airlines have in common is that they are selling themselves as LCC's, but when you go on the website and try to book something that will suit your schedule, you end up with fares that are not as reasonable as you would have expected.
IMO in an era of Momondo, Skyscanner, Kayak, Google flights, it takes much more than advertising yourself as lowcost to convince consumers that you offer the best deal.

Kjos recently said: “If the owners want to sell I will not stop it,” he said in Brussels. “I will listen carefully to the other shareholders. I just think it’s too early because we have not started harvesting yet.”

I never know what is going on here. Do they want to sell? Don't they? Do they want the money? Would they love to see their long-haul-low-cost model to become real? Are they just a bit lost, but lost with money?

It is a PLC so the Shares are traded at the OSLO stock Exchange. I could not find an overview on the shareholders, How much des Mr Kjoos still own and are there shareholders who could block a take-over. But looking at the way this Company opeates the question for the shareholders is not "do they want to sell" but rather "do they Need to sell resp. "run away before it is too late".

Any possible buyer, be that IAG or LH, will go for a majority, if not 100%. LH has experience with entrprenours who still run the Company after they have sold their Shares. BMI is a lesson LH won't forget. Whatever, Norwegian will Need a strong owner who has more than the Money to Keep them in the air. Looking at the route map, LH is the better match.

a350lover wrote:

Kjos recently said: “If the owners want to sell I will not stop it,” he said in Brussels. “I will listen carefully to the other shareholders. I just think it’s too early because we have not started harvesting yet.”

I never know what is going on here. Do they want to sell? Don't they? Do they want the money? Would they love to see their long-haul-low-cost model to become real? Are they just a bit lost, but lost with money?

Not difficult to understand at all.

Kjos don't really want to sell. He thinks there is still more to achieve with Norwegian. However if there is a bid that is too good to ignore and the shareholders want to sell, he would be wrong to advice them to not sell.

So what is happening to DY is the modern day aviation industry's Operation Weserübung?

Largest shareholders in Norwegian Air Shuttle

HBK HOLDING AS 11,85%
FOLKETRYGDFONDET 7,10%
J.P. MORGAN SECURITIES PLC 4,88%
VERDIPAPIRFONDET DNB NORGE (IV) 4,62%
FERD AS 4,21%
DANSKE INVEST NORSKE INSTIT. II. 2,78%
DANSKE BANK A/S 2,28%
CLEARSTREAM BANKING S.A. 1,77%
SNEISUNGEN AS 1,67%
DNB NOR MARKETS, AKSJEHAND/ANALYSE 1,66%

AAR wrote:

Largest shareholders in Norwegian Air Shuttle

HBK HOLDING AS 11,85%
FOLKETRYGDFONDET 7,10%
J.P. MORGAN SECURITIES PLC 4,88%
VERDIPAPIRFONDET DNB NORGE (IV) 4,62%
FERD AS 4,21%
DANSKE INVEST NORSKE INSTIT. II. 2,78%
DANSKE BANK A/S 2,28%
CLEARSTREAM BANKING S.A. 1,77%
SNEISUNGEN AS 1,67%
DNB NOR MARKETS, AKSJEHAND/ANALYSE 1,66%

I think that list is out of date, as it does not show IAG's 4.6% shareholding. Unless VERDIPAPIRFONDET DNB NORGE is a Norwegian holding company that owns IAG's shares?

PanHAM wrote:

Looking at the route map, LH is the better match.

Interesting. What makes you think so? I have the feeling Norwegian actually rationalised some more current IAG's network. Lufthansa seems to be in good health despite its lack of presence in the UK and Scandinavia. They fly East and West with a very extensive operation. I don't see the rivality as clearly as in Norwegian/IAG here. LH would need to pay lots for DY's debt.

vhtje wrote:

AAR wrote:

Largest shareholders in Norwegian Air Shuttle

HBK HOLDING AS 11,85%
FOLKETRYGDFONDET 7,10%
J.P. MORGAN SECURITIES PLC 4,88%
VERDIPAPIRFONDET DNB NORGE (IV) 4,62%
FERD AS 4,21%
DANSKE INVEST NORSKE INSTIT. II. 2,78%
DANSKE BANK A/S 2,28%
CLEARSTREAM BANKING S.A. 1,77%
SNEISUNGEN AS 1,67%
DNB NOR MARKETS, AKSJEHAND/ANALYSE 1,66%

I think that list is out of date, as it does not show IAG's 4.6% shareholding. Unless VERDIPAPIRFONDET DNB NORGE is a Norwegian holding company that owns IAG's shares?

There are also other errors, such as HBK Holding (Bjørn Kjos company) owns around 25%.....although it will show up as less, as he has borrowed out many shares to shorters

Willie Walsh has said he does not want to enter into a bidding war for Norwegian. As much as I don't like Willie Walsh, at all, I do know that he is an incredibly smart man. I know he will outbid Lufthansa. If you look at all airlines in each group excluding the budget airlines you will find that their home countries do not overlap. If Lufthansa acquires Norwegian that gives Lufthansa or most likely Eurowings a back door to the UK. Meaning that if Lufthansa has access to the British market, IAG will lose ground particularly at Gatwick where British Airways plans some more growth. So IAG will most definitely go after Norwegian in order to still remain the most dominant force in the UK. They couldn't care less about the Scandinavian operations and worldwide operations just so they can stay dominant in the UK is enough for them.

LongHaul101 wrote:

Willie Walsh has said he does not want to enter into a bidding war for Norwegian. As much as I don't like Willie Walsh, at all, I do know that he is an incredibly smart man. I know he will outbid Lufthansa. If you look at all airlines in each group excluding the budget airlines you will find that their home countries do not overlap. If Lufthansa acquires Norwegian that gives Lufthansa or most likely Eurowings a back door to the UK. Meaning that if Lufthansa has access to the British market, IAG will lose ground particularly at Gatwick where British Airways plans some more growth. So IAG will most definitely go after Norwegian in order to still remain the most dominant force in the UK. They couldn't care less about the Scandinavian operations and worldwide operations just so they can stay dominant in the UK is enough for them.

LH had a front door to the UK with BD and they just cut up the LHR slots and sold off the rest.
LH's interest is probably just their foolish attempt to grow EW at any cost.

WW is telling LH:if you wanna have it, be my guest.
If DY was reasonable, IAG would have made a move by now. What IAG can do now is to wait for DY's desperate call.
Bidding wars are only for desirable assets.

In a recent Norwegian interview Bjørn Kjos said he thinks it's "too early to sell", but that there's little he can do if the other shareholders want to sell.

He also believes that they are big enough to stand on their own and said that for him personally it's important that the Norwegian brand stays even if a deal is made.

About finances (google translated):

Norwegian faces a "cyclone of challenges," says senior analyst at Bernstein Research, Daniel Roeaska, who analyzes the airline industry from England.

- If you have a negative flow of money and you burn the money, you will run out of money. Then you will eventually go bankrupt, says Roeaska to NRK.

The DNB has also been critical of Norwegian's future and has stated that the airline will need a few billion in capital already in the first quarter of next year.

"We will not be having trouble meeting our loan commitments. If we had needed more money, we would get more money, says Kjos, adding that the sale of new aircraft is the key to making money.

"We have purchased aircraft we know we can make money on, and know we will sell in the market. It was a strategy we already decided in 2012.

Kjos does not agree that he is a director who gambles high and takes great chances.

"We had not done this unless we were completely sure of the way we financed it," he said.