Norwegian to increase its long-haul routes

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This topic contains 20 replies, has 10 voices, and was last updated by  IanFromHKG 10 Jan 2014
at 02:37
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Viewing 15 posts - 1 through 15 (of 21 total)

  • Anonymous

    GrahamSmith
    Member

    Business Traveller covered this yesterday. More info here:

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


    AMcWhirter
    Participant

    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
    Participant

    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
    Participant

    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
    Participant

    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
    Participant

    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
    Participant

    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
    Participant

    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
    Participant

    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
    Participant

    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
    Participant

    AMcWhirter
    Participant

    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
    Participant

    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
    Participant

    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.

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