My post on Hubert Horan’s anti-merger stance generated a ton of discussion here, and that was great. While some agreed, others didn’t. Norwegian apparently falls into the latter category, because it wants to jump into the Transatlantic market in a big way starting next year.
One of the important tenets of Hubert’s argument was that these mergers and joint ventures have created an oligopoly over the Atlantic that can’t be broken. This assumes that low cost carriers won’t be able to break into the market successfully in any meaningful way. Norwegian apparently thinks he’s wrong.
In an interview with E24, Norwegian CEO Bjørn Kjos outlined his plans for Transatlantic domination. I should warn you that it’s entirely in Norwegian. Were it not for Google Translate, I would never have known anything about this. (Even with Google Translate, some of this is unintelligible.)
The airline plans to start intercontinental flights to the US and Asia just in time for summer season, 2011. The plan is to have 15 airplanes, no small amount. It’s unclear how many will be flying at the start, but this isn’t just going to be a case of the airline dipping its toes in the water.
Bjørn says he wants the newest and most efficient planes, but I have to assume that will mean something like second-hand A330s or something like that. I can’t imagine we’ll see Norwegian colors on a 787 anytime soon, but then again, stranger things have happened.
If you think this is going to be a true low cost carrier, point to point operation, you’re wrong. Bjørn says that won’t work, and he’s building a hub operation instead. At least he knows that feed is important. And Norwegian does have a fair amount of feed. Take a look at this current route map from Oslo:
Stockholm and Copenhagen are smaller, but still have similarly strong reach. Of course, these don’t all operate every day and aren’t organized in a way where they could perfectly feed into the long haul option at the same time, but if it’s cheap enough, the leisure folks will endure long layovers.
It’s not, however, the leisure folks that really matter the most here. I find myself wondering if these guys are even going to have a shot at the business travel market. If they build a true hub with efficient connections, I suppose it’s possible, but I’m not sure that’ll happen. True, they can get the local traffic in Scandinavia, but, uh, that’s not the world’s biggest market.
I’m sure SAS is just thrilled with this move. Yeah, right. The always-failing airline is now going to face much more competition, if this takes flight. Heck, SAS doesn’t even have 10 widebodies, so Norwegian is looking to just leap right over it. I would just hate to be SAS right now. Actually, I wouldn’t want to be SAS at any time in the last couple decades.
So this Norwegian experiment may very well be the first test for substantial low cost long haul over the Atlantic. I’m skeptical that it’ll work, but hey, stranger things have happened.