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The story of Norwegian Airlines will make an incredible movie one day, even though it’s unclear of yet just what sort of ending theatre goers can expect. Norwegian has been a roller coaster tale with epic rise, crippling debt and pioneering new frontiers of “long haul – low cost”. This week, the story takes a new twist, as the airline aims to stay afloat once again, by deferring $380 million of debt…

Norwegian Airlines has asked bondholders for a two year postponement in repaying $380 million in bonds, only months after it raised an additional $353 million by issuing new shares.

In other words, there’s a whole lot of leverage going on, and each time Norwegian has raised money in recent months, it’s been hit with a new headwind which required even further cash injection. Most notably, the grounding of its Boeing 737 MAX fleet, and Rolls Royce engine issues with its Boeing 787 Dreamliners.

According to CNN, the newly proposed bond offers will be discussed on September 16th. Airlines had hoped for a 737 MAX return as early as October, but new paperwork issues seem to indicate a return no earlier than mid December, which means the airline remains tied to expensive leasing operations in the interim.

Whatever the airlines eventual fate may be, passengers have lots to love about Norwegian, even if they’ve never actually set foot on the airline. Norwegian launched the most remarkable “long haul low cost” operation in aviation history, which effectively forced the hand of airlines around the world to lower long haul prices to unprecedented levels, even on routes like Los Angeles to Rome.

It’s fair to say that the $250 flight between the US and Europe we see today on major airlines, and the briefly lived $69 one way fares between the UK and Singapore are direct products of Norwegian and their bullish launch into the long haul market, which created an absolute necessity for legacy airlines to adapt new pricing, or die. But the mainstay airlines did adapt, and that’s where Norwegian’s woes begin, and perhaps end.

Norwegian attempted to revolutionise long haul travel via incredibly low fares with low frills. The concept worked a treat on European short haul for decades, so many believed that it was just the antidote needed to democratise long haul travel, open new possibilities and bring sweeping change to the mass travel market. But without a checked bag, or a meal, or even a drink, legacy airlines found the perfect measure to quell Norwegian’s novel concept by matching on price, and beating them like a drum on everything else.

Legacy airlines dropped the check bag, but kept the meals and drinks while matching Norwegian on price. Naturally, customers gravitate to the more frill filled option, especially when the lower frill option is on the brink of financial ruin, in a year when many others have failed.

Sensing trouble ahead, credit card companies have delayed payments to Norwegian, passengers have shifted flights to more reliable options, if they even exist these days, and now bondholders will have the ultimate say, in just two weeks time. The last two years has seen the collapse of Cobalt, Monarch, WOW and more, and unless Norwegian manages to pull a rabbit out of a hat, again, it too may be on borrowed time.

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