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JEvery second counts: With this alarm tone, aviation analyst Daniel Röska describes his vision of the Norwegian low-cost airline. However, the boss of British rival Easyjet, Johan Lundgren, testifies that he can even resist for months with the means available, under certain conditions. In the Corona crisis, many airlines growl and ask for government help, but the need seems particularly great among Norwegians. Bond shareholders, plane rental companies, shareholders – they’re all supposed to be part of a bold bailout plan – turning claims of more than $ 4.3 billion into new shares.
This is bold because Norwegian’s value is only around € 70 million on the stock exchange. The avalanche of new shares would greatly dilute the shares of existing shareholders. The share price has already collapsed, a stock is available for about 45 cents. Observers see a “desperate act” of society, which had flown to the limits of resilience with its expansion plan before the crisis. Shareholders must approve the plan on May 4.
Norwegian has made it clear that concessions from creditors and homeowners are needed to receive state aid. Norway has promised loan guarantees of more than NOK 3 billion (€ 264 million), but only 10 per cent of them wanted to be granted unconditionally. If the rescue plan fails, it threatens to end.
Reservations for up to nine months
Easyjet is far from that, even though 337 planes are on the ground. The new loans have reserves of up to £ 3.3 billion and can withstand a stagnation of up to nine months. “Our cash lasts longer and longer,” chef Lundgren said in a conference call. In Germany, Lufthansa’s largest group names significantly more reserves and is still in talks about state aid.
However, shareholders calmed Lundgren’s message. Easyjet started with earnings from the course, which melted during the day. Bernstein analysts certify that the low-cost airline is “certainly the best” of the great British companies. British Airways’ IAG group is classified similarly. Outgoing IAG chief Willie Walsh has ruled out IAG requesting government help. Virgin Atlantic, on the other hand, requested it. Billionaire Richard Branson’s group is considered the weakest among the main British lines.
The most urgent solution in this country is for Necessary condor, whose aid loan from state bank KfW is due last Friday. At the time, Condor was in a difficult situation after the end of parent company Thomas Cook, and the Polish LOT, who introduced itself as the bailout, broke up the purchase. A new KfW loan is emerging as a solution; an administrator must assume the role of the owner until the next start of sales. Direct entry into the state is considered unlikely.
In Australia, government aid becomes a bone of contention
Aid is also imminent in Switzerland: for the Easyjet branch there and the Swiss brand Lufthansa. The Berne government wants to provide bridge loans with state guarantees. Guarantees must be subject to conditions. Borrowers cannot return funds to parent companies: “The money must remain in the country, it is not negotiable,” said Transport Minister Simonetta Sommaruga.
In Australia, you can see that government aid does not always help calm aviation. There is a fight between the Qantas list and its only serious competitor, Virgin Australia. Virgin initially wants and needs government aid of around A $ 1.4 billion (€ 813 million); otherwise Virgin will fall and Qantas will have a monopoly on intra-Australian traffic. That is why Virgin is considered systemically important.
In contrast, Qantas chief Alan Joyce shoots. If Virgin got the sum, Qantas’ largest group would have to receive 4.2 billion Australian dollars. But he didn’t want them at all. After all, these days it’s about “surviving the fittest.” Qantas has raised one billion Australian dollars in the market, which it guarantees with planes, and is ready to raise another $ 3.5 billion if necessary.
Will the middle seat remain empty in the future?
“If good companies have been well managed, the government should allow them to find their own way out of the crisis. And don’t look at the weak who have been mismanaged for a decade, “said Joyce. He is also upset that Air New Zealand has received $ 900 million in New Zealand from the state. “Without this intervention, New Zealand risked running out of a national airline,” said Treasury Secretary Grant Robertson. The state owns 52 percent of Air New Zealand.
As Lufthansa extended its emergency flight schedule for two weeks until May 17, Easyjet chief Lundgren considered a restart. “We hope to start with domestic flights first,” he said. When cross-border traffic is possible it remains open again. Something could also change on board for passengers to keep their distance. “The intermediate seats will probably remain vacant at first.” However, the financial consequences if a third of the seats fly empty have not yet been quantified.
