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| Norwegian bringing back affordable fares across the Atlantic |
Low-cost airlines dominate European and American skies, but they’ve
never managed to pull off the same trick and make money by flying across
the Atlantic or further afield.
Now Norwegian Air Shuttle, the Oslo-based budget carrier, thinks it
might have figured out how to break that pattern and challenge the
alliances of legacy airlines that rule the lucrative transatlantic
market.The idea of a transatlantic low-cost airline isn’t new.
Freddie Laker tried it in the 1970s with his Skytrain, but it went bust
in 1982. Other efforts like Canada’s Zoom Airlines also failed. That’s
because long-haul flights on wide-body airliners across oceans are a
very different proposition from the short hops flown by cheaper
narrow-body aircraft in the U.S. and Europe.
“I understand where they are coming from, but I yet have to be convinced
it will work,” said Tim Coombs, managing director at U.K. consultancy
firm Aviation Economics. “The case for the success of the long-haul,
low-cost business model is not as clear-cut as it is with short-haul,
low-cost.”
AirAsia X — the long-haul, low-cost affiliate of the AirAsia Group — is
the international carrier with the longest track record of trying to
make money by flying to distant locations, he said. “The signs so far
have been unpromising,” he added. “In the past five years, it has
enjoyed only one year, 2012, when it recorded a profit.”
Norwegian hopes that its effort will be different. A few smaller
competitors are also venturing into the long-haul, low-cost market. They
include Iceland’s WOW Air, linking Europe and America via Iceland, and
France’s French Blue. But Norwegian is the largest.
Norwegian believes it has worked out how a low-cost can make long-haul
routes work. It operates a single fleet type of modern aircraft on
intercontinental routes and will take delivery of its first Boeing MAXs
this year. It has its own short-haul network to supply passengers and is
in talks with Ryanair to bring passengers to its long-haul routes.
Unlike decades-old flag carriers, the Norwegian brand dates only to
2002, which means there are no legacy work practices or inflexible
staff. It has scale and sufficient aircraft orders to support its
growth. Its network focuses on leisure routes and it flies to secondary
airports rather than big, expensive or congested airports.
Norwegian started as a traditional short-haul, low-cost carrier. But in
2013, it parted ways with rivals like Ryanair and easyJet, launching its
first nonstop long-haul flights in 2013 between Oslo and New York with a
fleet of brand new Boeing 787s. Norwegian posted a 246 million
Norwegian krone (€33 million) net profit in 2015, reversing a 1.1
billion krone loss in 2014.
Its network has grown substantially since then, offering transatlantic
flights from several cities in Northern Europe, Paris and London
Gatwick, from where it introduced the U.K.’s first long-haul, low-cost
flights, and now flies to eight U.S destinations. That’s posing a
growing challenge to SAS, Air France, British Airways and Virgin
Atlantic.
Spain’s Iberia and Ireland’s Aer Lingus will soon feel the pinch as
well. From June, Norwegian will connect Barcelona with nonstop flights
to Los Angeles, San Francisco (Oakland), New York (Newark), and Miami
(Fort Lauderdale). To make matters worse for Iberia, Norwegian is also
considering destinations in its key markets of Argentina and Chile.
Building its intercontinental network has not been easy. But Kjos, a
lawyer by training and a former fighter pilot for the Royal Norwegian
Air Force, is not afraid of a good fight. It took him three years to
obtain the U.S. permit for Norwegian’s Irish subsidiary, and to get it
he had to abandon his initial idea to work with Asia-based contract
crews in order to cut costs.
Read more: Cheap Atlantic crossing may no longer be flight of fancy – POLITICO
