Norwegian's tough winterBack to Forum
FT piece from yesterday
Geir Karlsen has huge task as he attempts to shore up finances in the low-cost carrier5 Nov 2019
To quote from the press release
Norwegian is a listed company on the Oslo Stock Exchange and is the world’s fifth largest low-cost airline operating 500 routes to 150 destinations in Europe, North Africa, Middle East, Thailand, Caribbean, the U.S and South America.
And has been discussed many times before, is this a sustainable model for a truly LCC operation ?
IMO, like others before them, notably WOW failed because they over stretched themselves too quickly
Hope it works out, because they definitely are better than Ryanair and EasyJet. Possibly only Jet2 and Westjet are better LCC’s.
although, I’d argue that Westjet is slowly but surely transitioning / morphing into a full service operation with low cost disciplines.6 Nov 2019
The article itself is interesting but even more so is the comment made after the article.
“Industry outsider takes helm at Norwegian Air”, (TRAVEL WEEKLY 20-11-19)20 Nov 2019
Major news today.
Not just the USA … Norwegian will also be axing some of its Thai routes to SE Asia in 2020.
One wonders whether or not long-haul low-cost can ever be profitable.27 Nov 2019
I was given to understand that long-haul LCC flights could be and are possible. Eastern Asian skies seem to be full of LCCs which make profits. I suppose it is a question of adaptation and how it is carried out.28 Nov 2019
Conventional thinking on L/H lowcost generally is that it can’t work unless the carrier is backed by substantial infrastructural resources of a major carrier, which is why ventures such as ‘Level’ might work (despite the stupid name).
It’s been discussed in a couple of the ‘authoritative’ books on the subject by people such as Rigas Doganis (Flying Off Course) and Stephen Shaw (Airline Marketing and Management). I am not sure that there was a finite conclusion but it’s always been an interesting topic for debate. The fact that all the successful LCCs seem to be S/H probably speaks volumes.
Rigas is an aviation consultant and strategy adviser to airlines, airports, banks and governments around the world. He is Chairman of the European Aviation Club in Brussels. Also Chairman of the Airline Management Group . He was until 2015 a non-executive director of EasyJet and previously served as a non-executive director of GMR Hyderabad Airport, India and of South African Airways. He was Chairman/CEO of Olympic Airways the Greek airline in the mid-1990s and successfully implemented a turnaround plan. Rigas writes books and articles on aviation. A new fifth edition of “Flying off Course – Airline Economics and Management ” came out early 2019. He is a Visiting Professor at Cranfield University, UK.
Nice chap, I’ve met him a couple of times but I don’t think I’d entrust my airlines to his management!28 Nov 2019
I was given to understand that long-haul LCC flights could be and are possible. Eastern Asian skies seem to be full of LCCs which make profits. I suppose it is a question of adaptation and how it is carried out.
Several years ago I wrote a long piece about low-cost long-haul.
Then I wrote an update for last May – see below.
It is a complex issue and varies depending on the route, region, market conditions, fuel prices, overflying rights etc etc.
For example many people today forget that Norwegian’s original plan was to serve NE Asia including mainland China.
But that never happened because Norwegian did not secure Russian overflying rights.
Hence it concentrated on transatlantic routes and those few services to SE Asia. One of which, London-Singapore, did not last long because Norwegian failed to understand why AirAsiax also failed in 2012.
See: Aviation Low cost, high stakes28 Nov 2019
Tough winter indeed………………..
“Norwegian Granted Slots At London Heathrow Airport,” (Simple Flying 1=12=19)
So Norwegian is bankrupt, then gets baled out by Norway´s richest man, then with some financial wizardry obtains the funds to continue for another twelve months, signs an agreement with Jet Blue to link up and ends up with six pairs of slots at Heathrow where each is worth as much as the Mona Lisa. So who is doing who which favours?
Another correspondent Howard Miller, seems to have hit the nail on the head when he says,”It’s absolutely inexcusable that one of the world’s most heavily traveled routes, Heathrow-JFK, has just 2 airline anti-trust immunized joint venture aligned groups operating, BA/AA & DL/VS.That’s ridiculous!”
He asks if these slots were released,”as a condition for regulatory approval of Virgin Atlantic into the Delta-Air France-KLM anti-trust immunized joint-venture alliance?” though he has forgotten that United also flies from Heathrow to New York. So will it be that Jet Blue flies into LHR from Boston and Norwegian operates to other US airports? Or will Norwegian provide the feeder flights into LHR from Scandinavia for Jet Blue? Are these slots to be shared with Jet Blue or will Jet Blue have its own? Let us have some transparency here (and at what price?).
Or does this have any relation to JetBlue giving up slots at Mexico City for Norwegian to take them over? (to London, Paris and Oslo?)1 Dec 2019
I never actually knew there was a slot ‘lottery’ for LHR.
I’m not sure what Norwegian can do with their six LHR slots (they applied for 14). This equates to three round trips a week. They have no connectivity at LHR. I imagine (although am not certain) that a condition of slots awarded by lottery is a carrier cannot sell them.
Was also interesting to note that JetBlue applied for 70 LHR slots and were awarded zero in the lottery.2 Dec 2019
I’ve been told by a friend who is crew that he reckons it’s for MCO rotations.
A friend of his (also crew) said it’s at the behest of Heathrow, who wanted the route opened.
I have no idea the veracity of the Galley FM comments though.
It would certainly be niche.
1 user thanked author for this post.2 Dec 2019
Obviously Norwegian is not out of the woods yet.Norwegian looks for money by selling its Argentinian subsidiary to JetSmart.
“Norwegian sells Argentine unit to Indigo Partner’s JetSMART”, (ch-aviation 4-12-19)
“Breaking: Norwegian’s Argentina Operation Sold To Jetsmart”, (Simple Flying 4-12-19)
1 user thanked author for this post.5 Dec 2019