It's only a matter of time before Norwegian goes under due to its high debt, rival Ryanair CEO Michael O'Leary told CNBC on Monday. The Ryanair boss's comments are based on Norwegian's decision to sell aircraft last month.
”"They have now moved to selling aircraft to raise $50 million, which is not enough to pay a week's worth of fuel. Norwegian is doomed, the business model is not working and they are saddled with heavy debt. It is only a matter of time before they go under," O'Leary said.
Norwegian made a loss of 1.45 billion Norwegian kroner in the last financial year. The result was weighed down by engine problems, price hedging for fuel costs and tough competition.
Ryanair's results for the latest half-year period showed a profit of 1.15 billion euros, which was above analysts' expectations.
A spokesperson for Norwegian was not available for comment when CNBC contacted the company. However, the company responded to Finwire's request.
”"This is not the first time Michael O'Leary has spoken badly about Norwegian and made one false claim after another. He has done this for many years and it is strange that as soon as he gets the opportunity in official contexts, he wants to criticize Norwegian," the company writes in an email to Finwire.
Norwegian points out that it has had its best quarterly results ever and delivered above expectations regarding the savings program #Focus2019. The company has also established a joint ownership company for parts of the aircraft fleet with China Construction Bank Leasing International, one of China's largest banks.
Norwegian shares are trading down 0.4 percent on Monday afternoon, but are up over 31 percent in the past month.
Source:Finwire
