low cost carriers

Aug 6, 2017

Norwegian trips up on the way to whole new longer haul market

Norwegian has some bold ideas for shaking up longer distance low cost flying, despite hitting some financial turbulence

Ben Sandilands — Editor of Plane Talking

Ben Sandilands

Editor of Plane Talking

Norwegian will soon have 737 MAX 8’s like this doing trans Atlantic routes

About a year ago, Norwegian Air enjoyed a similar profile among European and North American carriers as the offshore sighting of a Viking raiding party would have had from an English North Sea facing fishing village in the medieval period.

Norwegian promised nothing less than rape and pillage in terms of what it set out to do, including exploiting the low wages and non-existent labor protections of its Irish base. It has many bases in the EU and in Thailand.

But it now transpires that while passengers increased by 19 percent over a year on its latest quarterly filing, they didn’t bring enough money with them to offset massive increases in the airline’s costs of doing business. The Norwegian kroner went south, fuel went north, lots of jets were ordered or received, and chief financial officer Frode Foss, who has been at Norwegian since 2002 also went.

The cautionary tale about the costs of Norwegian’s aggressive expansion in the North Atlantic and European markets is dissected by Air Finance Journal. (You can find a read-me-for-free option at the link.) Although this isn’t a postmortem and the Norwegian brand carried by the bright red nosed jets is very much alive, it’s now a bit anaemic.

Norwegian had 133 jets in its fleet up until the end of its last quarter, mainly 737-800s, but also a small number of 787-8s and -9s and the first two 737 MAX 8s, of  another 106 Boeing single aisle jets and a few dozen from Airbus’s A321 NEO line on order.

While consumer reports of its flights vary from ‘influencer’ social media posts declaring a new age of millennial friendly flights has opened (whatever that means) to the usual scathing stuff possibly posted by ‘anti-influencers’ Norwegian gets positive wraps for offering an amazing 117 cms of leg room in its premium economy rows, or about 10 cms more than Virgin Australia or 20 cms more than Qantas.

Ordinary economy is, um, ordinary, and only around 2.5 cms roomier in seat pitch than Qantas or Virgin Australia. But the 787s are unfortunately nine across in economy which is very un-Viking of Norwegian.

Its headline initiative in the last year has been to use single aisle 737-800s (pending ugrades to the MAX 8s) to do non-stop trans Atlantic flights, some from relatively obscure facilities that are  ultra-convenient to neighborhoods where the wallets are thick and the patience with the drive to places like JFK or Heathrow is thin, even if in one’s dreams, the airports gave away the parking for free.

This is an interesting variation on the concept of Dreamliners and the like being used as hub busters, more like connecting say Beaumaris to Fivedock rather than Tullamarine to Mascot, except that Australia doesn’t have a huge supply of well off suburbs concealing underutilised 2500 metre runways generally hosting corporate jets or upper end general aviation ‘toys’.

Nevertheless, there are possibilities of doing that sort of service around some of the larger or more travel active cities on either side of the Atlantic. Norwegian seems prepared to find and develop them, but from a low fare or leisure perspective rather than something that might dislodge loyal legacy airline customers from their club rooms and costlier airline cabins.

So far, Norwegian shows no signs of being interested in taking on AirAsia X, Jetstar or Scoot in this country, but it is clearly thinking of linking SE Asia to Scandinavia or northern Germany, and there are signs of interest in flying 737 MAXs from India to secondary or tertiary cities in Europe.

There are massive attitudinal and public policy barriers to Norwegian’s ‘wilder’ or more impulsive thoughts, but if it finds such rich veins of untapped demand exist then there will be a new contest underway among transborder low cost franchises, no doubt including the likes of Jetstar.

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