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Norwegian Air's 1st Half 2020 Financial Results

Our friends at Norwegian delivered their 1st half financial results for 2020 on Friday. Highlights:

  • Passenger numbers down 99% year-over-year for the second quarter.
  • Losses, losses, losses (like other airlines)
  • Cash burn, cash burn, cash burn (like other airlines)
  • Still with an enormous accounts receivable which is largely credit card holdbacks (much of which will likely be refunded)
  • The airline will have a Nordic focus going forward, but still wants to "prove" the low cost long haul model by focusing on routes that were profitable pre-COVID-19 as country openings permit these routes
  • Not enough cash to get through the winter. The airline needs an additional cash infusion to survive. Never heard that before.

Watch the investor presentation from a link on the Investor Relations webpage: https://www.norwegian.com/uk/about/company/investor-relations/

Yahoo News' Headline: Norwegian Air Seeks More Funds as Insolvency Threat Looms

One Mile at a Time's take: https://onemileatatime.com/norwegian-air-run-out-of-money/

Posted by
7122 posts

And investors have little faith. Share price down 97% from year ago level.
Ha det.

Posted by
7679 posts

Thank you Dave. Really appreciate the update and summary. I love Norwegian, and i really hope they survive.

Posted by
2329 posts

joe -- Much of that is that shares got diluted by (1) Norwegian's debt-for-equity swap earlier this year and (2) a new equity offering at around 10 cents per share shortly after that.

jazz -- I like to call Norwegian the airline with 18 lives.

Susan -- People who have flown Norwegian, in general, seem to like it. I flew an intra-Norway route on Norwegian and liked the product.

Posted by
2329 posts

One interesting note from the video conference is that even if the airline convinces the customer to accept a credit for a future flight, MasterCard still with not give the airline the money for the ticket until an actual flight is flown using the credit.

Posted by
6204 posts

I hope Norwegian survives. They offer a decent product at a reasonable price.

Posted by
7679 posts

The planes Norwegian uses for the San Francisco - Paris route are amazing. Best quality plane environment i’ve ever experienced in 51 years of flying this route.

Posted by
1761 posts

Not enough cash to get through the winter. The airline needs an
additional cash infusion to survive. Never heard that before.

It has been mentioned in the media before, in this article e.g. https://www.reuters.com/article/us-health-coronavirus-norwegianair/norwegian-air-shareholders-back-1-billion-rescue-plan-idUSKBN22G0F5 But this is the first time I see Norwegian mentioning it.

Personally I've flown Norwegian a couple of times within Europe, they have gotten me from A to B but in most cases there are in my opinion better alternatives.

Posted by
2329 posts

Never heard that before.

A bit of sarcasm.

Posted by
7122 posts

Seems to be that classic question of pouring more money into a ( bottomless?) pit or cutting losses before it gets worse.

NAS = Northern Alitalia Sinkhole ??

Posted by
1761 posts

A bit of sarcasm.

I see, totally missed that. Sorry if gave the impression of being a bit rude.

Posted by
2329 posts

Sorry if gave the impression of being a bit rude.

No such impression at all! (And that's not sarcasm!).

Posted by
1761 posts

It's reported in Swedish media that Norwegian are looking at reducing their long haul fleet and get rid of 17 of their 37 787s.