The grounding of Boeing's accident-stricken 737 plane could have serious consequences for the low-cost airline Norwegian.
This is what the major bank HSBC writes in an analysis on Wednesday.
As previously reported, HSBC more than halved its target price for Norwegian NAS -9.75% on Wednesday from 46 to 20 Norwegian kroner. The reason is the grounding of the Boeing 737 Max 8 aircraft model after two accidents in a short period of time raised questions about the plane's airworthiness. The bank also reiterated its sell recommendation on the airline.
HSBC expects the flight shutdown to last at least two to three months, reports Norwegian news site E24, with lingering effects for up to six months thereafter.
”"Once the aircraft are back in the air, we expect new deliveries to be postponed for at least six months. At the same time, we also expect the retirement of older aircraft to be postponed," analysts at HSBC write, according to E24.
The bank also sees a risk that the adjustment to the fact that part of Norwegian's aircraft fleet is grounded will weigh on the company's already strained business model.
Shortly after lunch on Wednesday, Norwegian had fallen by almost 7.5 percent on the Oslo Stock Exchange to 52 Norwegian kroner.
Source: di.se
