When Norwegian was struggling, I believed that Norway’s pride and the oil state’s resources would not allow it to give up and let the company go bankrupt. I made an investment that I am happy with.
Corona and other factors caused quite a dip, but now the company is already paying dividends. Norwegians are wealthy and pioneers in many things. It’s worth being in such company or at least following what they do. Having flown with the company several times, I consider this low-cost airline to be quite exemplary.
Norwegian Air Shuttle (NAS) - The company is worth following and discussing. I couldn’t find an earlier thread.
Norwegian Air Shuttle is acquiring Nordic Leisure Travel Group. If I have read correctly, this includes the travel agencies Ving, Spies, Tjäreborg, and Globetrotter; the airline Sunclass Airlines; and a hotel and resort network (Sunwing, Sunprime, and Ocean Beach Club), which is particularly prominent in Southern Europe and Asia.
This is a clear leap toward becoming a travel group, leading to more and higher-margin sales per customer. Capacity utilization could increase and seasonal fluctuations could level out. The company estimates that revenue will double and profitability will improve significantly. They will become a competitor to operators like TUI. The new owners bring additional strength.
Of course, integrations always involve risks. There is fierce competition and cost pressure in the aviation industry. However, there are such forces behind this that I want to remain involved. When Covid shook things up, I got in at the 10 NOK level, believing that Norway would not let this go bankrupt. While it’s unlikely to catch any tourism hype, this will probably be a steadily growing and profitable group in the future.
Although the share price fell following the announcement and valuation is currently fluctuating, the price has started to recover. This is likely a quite normal reaction to major moves. Approval from EU competition authorities is still pending.
Nordic Leisure Travel Group likely impacts Norwegian’s earnings through the same mechanism as Aurinkomatkat Oy does for Finnair Oyj’s earnings. The subsidiary’s performance is not clearly reflected in the group’s results because the impact of intercompany transactions is unknown. In any case, the parent company can leverage the subsidiary’s travel and service demand to build a foundation for a broader customer base.
Nordic Leisure Travel Group has over 360 destinations in more than 60 countries. Aurinkomatkat has over 80 destinations globally, of which about 15–20 are exotic or long-haul destinations. For Finnair, long-haul flights have been particularly important. After sliding into restructuring, Norwegian Airlines has focused on intra-European flights. This seems like the right solution in a situation where air traffic to the Far East is in transition. Juneyao Airlines (Juneyao Air) flies directly, for example, from Helsinki-Vantaa Airport (HEL) to Shanghai Pudong International Airport (PVG) in just over 9 hours.