[Anonymous]

[GrahamSmith]

Business Traveller covered this yesterday. More info here:

http://www.businesstraveller.com/news/norwegian-to-launch-seven-us-routes-next-year

[AMcWhirter]

Hello FinnishBoss69

There has already been at least one lengthy thread in this Forum discussing the subject you mention.

It is a complex one and one must remember that the LCC business model does not work as well long-haul as it does short-haul.

it is a subject about which I am writing in the October issue of Business Traveller.

Alex McWhirter

[Swindoneric]

I think a lot depends on price. It was interesting to read BT’s recent coverage where it was revealed that Norwegian are being undercut by legacy airlines on the Asian routes – albeit with indirect flights. If the same thing happens on transatlantic routes it would be difficult to see how they will prosper. I hope they do – every time I’ve flown with them it’s been pretty efficient.

[Senator]

I have a very hard time believing that the business/corporate market moving to Norwegian’s long-haul network for two main reasons:
Frequency of departure
Lack on lowest pricing if connecting

All of these new destinations will not be served daily, but perhaps once to thrice a week. it is clever however, to be able to market direct flights from OSL/CPH/ARN-FLL and rotate the B787 around so you can offer this twice a week from each Scandinavian gateway.

I priced out ARN-FLL on DY, checked the lowest fares from GDS (through ExpertFlyer) and came to the conclusion that once you added a 23kg bag the legacy carriers were as cheap, if not cheaper to MIA/FLL/PBI. So as Alex mention; making this work on intercontinental flights is a whole other sport.

All of these prices by the way, excluded transit through one of the other airports so you would have to buy a separate ticket if your travel need fall on other days.

[AMcWhirter]

Hello Swindoneric

You are absolutely correct. Originally Norwegian was aiming for Asian, rather than US for long-haul expansion. But changing tack in favour of the US would suggest it’s finding Asia tough.

http://www.businesstraveller.com/news/norwegian-loses-price-advantage-to-gulf-carriers

Its prices are being undercut by the Gulf carriers and it terms of product quality, flight frequency etc Norwegian is outgunned by TG who is the market leader (for Asia) in Scandinavia.

http://www.businesstraveller.com/news/thai-upgrades-scandinavian-routes

In addition it is easier for Norwegian to obtain traffic rights to US destinations. Asia is more restrictive.

Every market is different. LCCs would struggle between the UK and US because there are so many direct airline options. But Scandinavia-US is different. There is little direct competition and I don’t believe there’s the same intense level of indirect airline pricing.

Alex McWhirter

[Swindoneric]

Alex,
It will also be interesting to see how the transatlantic routes impact on Norwegian’s plans to use Asian based cabin crew – which I believe was the intention on their Asian routes. Obviously there could be cost implications if they use Nordic based crew.
Hope they succeed in their venture anyway…

[AMcWhirter]

Swindoneric,

The original plan was to use Asian crew for all B787 flights, ie both for BKK and US routes.

Not sure what the plan is now. But it’s interesting to note that Norwegian will be setting up crew bases (for 250 to 350 employees) in New York and Fort Lauderdale.

[AMcWhirter]

Senator

Yes you are correct. Norwegian’s fares initially look attractive but once you add on the cost of meals, luggage etc then your fare soars by over GBP100.

Where I do believe Norwegian does score is with its B787 “business class.” Granted it’s really a superior version of premium economy but it’s a difficult product for other carriers to compete with on price.

As mentioned above, I am covering this topic in the October issue.

[TominScotland]

Alex

Do you have any data on the business travel up-take of what appear to be relatively sucessful longhaul LCCs in Asia/ Australia – Air AsiaX, Jetstar and Scoot?

[AMcWhirter]

TominScotland

No I don’t unfortunately. But given the number of small companies/traders based in SE Asia I can see them being popular with a certain section of the business community.

Every market is different and it could well be that these Asian LCCs offer better prices (especially for their business/premium economy seating) than do the likes of MH, SQ and QF.

[TominScotland]

Very interesting piece on Norwegian’s ‘flag of convenience’ strategy at

http://centreforaviation.com/analysis/norwegian-air-shuttles-long-haul-business-model-flag-of-convenience-or-fair-competition-146928

[AMcWhirter]

Tom – Yes, interesting piece. Pity it doesn’t delve into the endless problems with Norwegian’s small fleet of B787s which I covered here:

http://www.businesstraveller.com/news/100105/norwegian-ceo-seeks-urgent-meeting-with-boeing

Part of the problem is that Norwegian is overly scheduling these new and high-tech B787s. I believe that BA’s B787 uitilisation is just under 13 hours in every 24 hours whereas Norwegian’s figure is around 18 hours.

[World78]

I remember reading somewhere that BA opted to have the 787’s maintained by Boeing for the first year at LHR. This will have cost them a bit more but at the end of the day saves them money if the entire B787 fleet enjoys on-time departure & improves passenger’s perceptions about the plane following a bumpy couple of months last year.

[AMcWhirter]

Hello World78

Norwegian also has a maintanence contract with Boeing. Not sure if it’s the same as the BA-Boeing arrangement.

http://boeing.mediaroom.com/index.php?s=20295&item=2173

Aviation experts believe that part of the problem is that Norwegian is overly using its new planes. But at the end of the day, these are expensive aircraft and unless Norwegian intensively uses them its low-cost, long-haul business model may not succeed.

I wrote about low-cost long-haul in the October issue of the magazine.

[Author]

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