It’s been in the works for years, and now it’s official. Norwegian last week unveiled its first 737 MAX schedules for transatlantic flights and put them on sale. Three points in the US will be connected to five points in Ireland and the UK. This is actually a rather momentous occasion, and it’s without question the first of many more to come (not just at Norwegian) thanks to this bad boy:
Yes, there are 737s that have crossed the Pond before. PrivatAir 737s in an all-Business configuration have flown over the ocean for years. WestJet has done some flying from far Eastern Canada to Europe on its 737s. I do remember Icelandair flying a 737-400 from Halifax to Keflavik, but I can’t really call Iceland to Canada to be transatlantic. Those, however, are outliers. In the future, the 737 won’t be an outlier, and Norwegian is ushering in that era. The new 737 MAX has the range to finally connect some Eastern US cities with Western Europe. And Norwegian is happy to be a pioneer in using it for that purpose. Here’s the map:
For the airport-code-challenged, from left to right that’s Newburgh/Stewart (about 10 hours north of New York City by barge), Hartford (gateway to, uh, East Hartford), and the mighty Providence (preferred airport of Quahog residents).
It is no mistake that Boston and New York City are also on this map. Norwegian is really hoping that it can pull people from those monstrous cities out into these alternate airports, where gates are cheap and runways are empty. I’ve already written about Stewart.
Looking at all these routes, none of them have overlap with existing nonstop service, unsurprisingly. There is, of course, nonstop service from Boston to Dublin and Shannon as well as from New York to Dublin, Shannon, and Edinburgh. But Logan, JFK, and Newark are a long way from Providence and Stewart.
Norwegian is coming into this with differing summer and winter schedules, as you’d hope. Here’s a brief breakdown of how the flights will operate:
| City Paris | Summer Frequencies | Winter Frequencies |
|---|---|---|
| Providence-Belfast | 2x weekly | – |
| Providence-Edinburgh | 4x weekly | 2x weekly |
| Providence-Cork | 3x weekly | 2x weekly |
| Providence-Dublin | 5x weekly | 3x weekly |
| Providence-Shannon | 2x weekly | 2x weekly |
| Hartford-Edinburgh | 3x weekly | 2x weekly |
| Stewart-Belfast | 3x weekly | 2x weekly |
| Stewart-Edinburgh | Daily | 3x weekly |
| Stewart-Dublin | Daily | 3x weekly |
| Stewart-Shannon | 3x weekly | 2x weekly |
When you first see all these lines on a route map, you probably assume there’s a ton of flying actually being done. But Norwegian is going Allegiant-style here with some sub-daily flying so there are fewer than 6 a day each way. This is very clearly aimed at the leisure traveler and not the business traveler, though undoubtedly Norwegian will attract some business travelers… the ones who aren’t on an expense account, at least.
To accomplish this flying, Norwegian is going to base two 737 MAX 8s at both Providence and Stewart. (Hartford presumably will be served by an aircraft based in Europe.) What’s interesting is how much extra time Norwegian will have available on those airplanes.
These flights aren’t being operated at crazy times just to ramp up aircraft utilization. Eastbound flights leave the US between 7:30pm and 10:30pm arriving in Europe in the morning. Westbound flights leave Europe between 3:30pm and 5:30pm. So we have four airplanes that will spend hours and hours just sitting on the ground in Europe, right? No way.
That kind of schedule means Norwegian can easily fly an intra-Europe roundtrip before having to head back to the US. Today, of the five cities seeing service to the US, only Edinburgh and Dublin have Norwegian service within Europe. And in both those cities, the handful of flights are operated by airplanes that come in from elsewhere and then turn right back around. I assume it’s only a matter of time before we hear about new flights from all these cities to points within Europe to keep aircraft utilization up and to build connecting options.
And really, connections are going to be hugely important over time. It will be easy for the big guys to compete out of JFK/Newark/Boston to these same cities if they so choose (and you know they will). But once you throw in connections to a bunch of smaller European cities without the same price pressure, it gets harder to compete. Is Norwegian going to be able to run enough connections to make a difference? No, but that’s what Ryanair and easyJet are for.
Looking at the seat map, Norwegian is going to put 189 seats on the 737 MAX 8, all in coach. That’s pretty similar to what Norwegian has on its 737-800s now, and it doesn’t leave much room for your legs. But for many people, a cheap fare is going to make it worthwhile anyway.
Norwegian did do some splashy intro fares for under $100, but there weren’t a ton of those. Still, fares are going to be pretty low, especially in the winter when Norwegian is going to have a heck of a time trying to fill these airplanes. In particular, with one-way pricing, this will be a huge bargain compared to the traditional airlines.
So for now, if you want a cheap flight, you’ll be able to find one… just not as cheap as you saw in the press release. I will remain skeptical that Norwegian can pull this off until I see proof otherwise, but I do think Norwegian is setting itself up as well as could be hoped for in a secondary airport. Even if this doesn’t work, others will find a way to make it happen. (It could be Norwegian with a revised plan, for all I know.) This is just the first attempt at what is bound to be a big change in transatlantic travel.
[Images via Norwegian/CC 3.0]
82 comments on “Norwegian Schedules the First of What Will Likely Be Many 737 MAXs Crossing the Atlantic”
Queue the comments about “I would never dream of taking a narrowbody aircraft over the Atlantic” even though the distance from these airports to Ireland is only a couple hundred miles more than flying to San Francisco, for example – a trip most people wouldn’t think twice about doing in a narrowbody.
Umm other that this thing of flying over land versus flying versus a large stretch of ocean, your comment makes sense
How does it matter? Non-MAX 737s fly over a long(er) stretch of ocean every day between the west coast and Hawaii.
Best flight in coach I ever had was on a BA 747, top deck, 3X3. Dis not miss the large mass of humanity below one bit.
And there are plenty of 757s crossing the Atlantic already. I flew EWR-BRS on CO back in the day, the slight additional discomfort of a narrowbody was more than offset by not having to deal with Heathrow when my destination was in Devon.
The actual (dis-)comfort of the seat I am in is much more important to me than whether there is a second aisle that I likely will never walk in. I have crossed the Atlantic on United’s 757 and it was fine.
Exactly this. Narrow bodies generally have fewer “middle” (non-window, non-aisle) seats, more overhead bin space per seat, and typically load and unload faster as well. I am agnostic as to the number of aisles in a plane.
Considering coach seats only:
737 (3-3): 1/3 of seats are middle
747 (3-4-3): 2/5 of seats are middle
757 (3-3): 1/3 of seats are middle
767 (2-3-2): 1/7 of seats are middle
777 (2-5-2): 1/3 of seats are middle
777 (3-3-3): 1/3 of seats are middle
777 (3-4-3): 2/5 of seats are middle
787 (3-3-3): 1/3 of seats are middle
A320 (3-3): 1/3 of seats are middle
A330 (2-4-2): 1/4 of seats are middle
A340 (2-4-2): 1/4 of seats are middle
A350 (3-3-3): 1/3 of seats are middle
A380 lower deck (3-4-3): 2/5 of seats are middle
A380 upper deck (2-4-2): 1/4 of seats are middle
To minimize your chance of a middle seat, fly a 767. And if you think narrow bodies load and unload faster, you’ve never been in the last row of a 757-300.
Omg I’ve been on the second to last row of both a 757-200 (united, Denver-Boston) and a 757-300 (Continental, Houston-Los Angeles) and yes. It takes a while before 180 or so passengers deplane before you. Also on the continental flight the flight attendant asked us to please let a lady from around my row deplane first as she had a connection, everyone was upset as she wasn’t the only one who had a connection. Myself included.
I don’t see this really working until they get some through ticketing arranged and take the risk away from the customer, on the surface a tie up with ryanair seems like win win for everyone. ( Unless ryanair is planning some its own routes of course!)
To be fair, BDL isn’t actually all that close to Hartford (or East Hartford, for that matter), at ~30 minute drive time. BDL is literally 1 town away from the Mass line.
The only real tourist attractions of note in the Hartford-Springfield area are the Mark Twain house, the Basketball Hall of Fame, and (and this is stretching it, I admit) UConn sports games.
There are about 3 million people in Connecticut (excluding Fairfield Country) and WMass. Plus, Springfield has a larger population than Hartford, though Hartford has the larger metro area. Building Bradley between those two cities made a lot of sense.
There are other things to do. The Berkshires aren’t all that far away and the Vermont-Mass border is only a bit over an hour up I-91.
BDL is 15-20 minutes north of downtown Hartford and about 20 minutes south of downtown Springfield. It’s a lot less convenient to New Haven, but still easier than a traffic-clogged drive to LGA or JFK from there. And, it’s a rather convenient and user-friendly mid-sized airport.
Fair points on much of that. Western Mass and Central CT are stuck in a bit of limbo in terms of airports, in that they are 2-3 hours from the NYC and Boston airports… That’s too long for most people to travel for domestic flights, and at the edge of what many are willing to do for leisure international flights, so an international flight out of BDL will have some appeal to leisure travelers just because of the reduced drive time to the airport.
I’m surprised they aren’t flying to Europe from BWI since their shuttle operation flies from there to the French Caribbean. This type of service would seem well suited to airport, although I’d like to see more mainline transoceanic service.
UK/ Ireland to BWI is about 30 mins more flying time compared to SWF. Perhaps an idea to see how things go on routes where range is less likely to be an issue so as to get an idea as to whether BWI can be achieved on a consistent basis without needing to have refuel stops (which would wreck any profitability attempts) on the way whenever the weather is lousy ?
David – I think that’s exactly right about BWI. This airplane hasn’t even been delivered yet, so we don’t know how well it will live up to promises, especially in a very dense 189-seat configuration. I’d bet they really just want to start shorter-haul and then see how far they can push after getting some experience.
Additionally, many of the European visitors to the French Caribbean would be coming from France. Along with US transit immigration requirements, it’s a hard sell to persuade someone to fly Paris-Dublin-Baltimore-Guadeloupe, compared to Paris-Guadeloupe non-stop
I just meant that Norwegian is already flying from the airport, so they have an infrastructure in place, and that it fits the current discount carrier trans Atlantic service (Condor, WOW). But yes, that 30 extra minutes may make a difference.
Well, I don’t expect to ever take a Norwegian flight, but I hope this has some effect on connecting fares to Europe via DFW, ORD, IAH and DEN on the majors. For me it would be a 3-leg trip just to get to BDL, PVD or SWF, and then 2 more legs to get to where I’m actually going, since the cities being offered are not where I want to go. That’s 5 legs to, say, London, while it’s only 3 legs to connect to London via DFW on AA. I know there are people cheap enough to do it just for the boasting rights, but as for me… my legs and back can’t take it.
CF – one thing you might want to add to the post – what’s the typical CASK (cost per available seat kilomtre) for a widebody like a B777 / B787 / A330 compared to a B737 Max ? Any comparison would of course need to also consider any differential in the cost of purchasing the plane in the first place. Will Norwegian see a compelling fuel saving that will allow them to offer substantially lower fares while still remaining profitable ? I imagine that there will be a non-trivial cost differential – would be interested to see just how much of a difference it really is
Would definitely be curious (CASM in the US!), but there is more than just the plane. I imagine these smaller airports have significantly lower fees for enplanements, gates, etc. Theoretically less taxi / hold time and fuel. And with the high seat counts (all coach config), definitely pushing average costs down.
My guess is on the revenue side as well, they hope for higher load factors on the smaller plane (What good is CASM if you can’t fill the plane?) as well as significant ancillary revenue.
Given the smaller aircraft, even if the spread isn’t as profitable as larger equipment, the potential for loss is also smaller as sub-daily schedule on a smaller plane. Not sure it is fuel cost savings as much as lower risk opportunity that drives a flight like this.
David – I can’t say I have CASM/CASK information. It is heavily-dependent on how the airline operates and configures each airplane. But this aircraft should be incredibly fuel-efficient, and I think it will give Norwegian a shot that no airline has had previously. This could be a true low cost airplane, if it works as planned.
This seems like the dumbest business plan in modern aviation (I exclude service from the government-owned, heavily subsidized Middle East carriers, since profitability isn’t much of a consideration for them). I’m sorry, but there is exactly a zero percent chance of these flights being profitable. Who in their right mind is funding this airline? Are the investors simply stupid?
We all know that transatlantic airlines generally need business class pax to operate profitably — at least in non-summer periods. Can anyone name an airline that’s ever been successful across the Atlantic without business class?
Second, we also know that transatlantic service requires people to actually want to fly to the destinations being served. Heck, Gatwick has generally been a loser because it’s “too far” from London. I’ve flown to Gatwick, and I don’t think it’s that inconvenient, but apparently the pax who pay big bucks (and who actually make these routes profitable) do think it’s too far. So anyone who thinks Newburgh is going to generate sufficient revenue to be sustainable needs to immediately exit the airline business and find another line of work.
Third, it’s not like this service operates in a vacuum. Norwegian has to compete against very established airlines who are flying into the airport travelers want to use, and who also have the tremendous advantage of hub feed and customer loyalty. This factor alone is enough to sink Norwegian’s service, but combined with the other factors, make Norwegian’s move the equivalent of lighting money on fire.
Regarding the last paragraph: the exact same was true in the inrta-European market (established players flying loyal customers into major airports) and yet it didn’t stop EasyJet, RyanAir, Norwegian… so what is different here?
Since Norwegian has yet to go bankrupt like just about every airline in the US, this can hardly be called the dumbest business plan.
Since all business class airlines between Paris / London and the US have mostly failed, … not sure your analysis is grounded in reality !…
I assume iahphx meant that the conventional wisdom is that a mix of coach and premium is needed.
Of course, Oliver. And it’s notable that the established — and profitable — low fare airlines in the USA and Europe have not attempted this type of transatlantic service. I am certain that it’s not because they’re timid. It’s because the business model doesn’t work. The numbers just aren’t there.
The thing is that, until relatively recently, aircraft size and range were roughly correlated. You needed a bigger plane to fly further distances, which meant more seats had to be filled. If you needed a DC-10 (Laker) or MD-11 (CityBird) or 767 (Zoom) sized aircraft to actually get across the Atlantic, that’s a lot of seats to fill in an all-economy configuration.
But with the 737 MAX (and A320neo?), smaller aircraft become viable. You don’t have as many seats to fill, and in absolute terms, you need fewer people to make the flight profitable. Or, to put it another way, a half-full MD-11 is a profitable 737 MAX 8.
Yes…. and it makes me wonder why no one started a low-cost / low-fare transatlantic airline by acquiring some 757s. They have the range, and I assume they’d have been cheap, given their age. Since you wouldn’t have paid much for them, you wouldn’t need to keep them flying constantly to pay for themselves; that would also mean less of a fuel-cost penalty, vs a new a/c… And the passengers who shop lowest-fare-first presumably could do without the latest in IFE.
While I’m skeptical that the economics of transatlantic MAX’s are compelling for discount airlines (wouldn’t the unit cost be lower in a bigger plane?), this seems to be the least of your problems if you insist on flying routes than nobody is looking to fly. I know there are a lot of “hobbyists” in this business who love to see new airplanes and new routes but, at the end of the day, Norwegian’s current transatlantic expansion model seems mind-bogglingly naive and stupid.
The largest single cost in these operations is fuel. Fuel burn is a straight line relationship with weight. So the lower the dead weight of the aircraft per seat, the lower the fuel burn. This is one of the reasons the 757 is still around.
Compared to a 767 or a 747 (and especially an A380), the dead weight per seat on a 757 or 737 isn’t a little less, it is a lot less. On the A380 the dead weight per seat is well in excess of 1000 pounds. On a 737Max it is probably closer to 500 pounds with 189 seats.
Most twin aisle aircraft have a dead weight per seat of close to 1000 pounds. The 757 is about 600 pounds IIRC. So if you can cut your fuel burn per passenger in half, you are going to have lower unit costs.
I’ve seen AC do YYT – LHR on a 320, so I know it can be done. I’m not sure I would want to fly any of those routes, since I would rather just fly from the west coast to Europe nonstop.
southbay flier – It’s an A319, and it looks hilariously out of place at Heathrow. But yes, it can be done. St John’s-Heathrow, however is only 2,316 miles. That’s a full 300 miles SHORTER than LA-Boston. St John’s is really far east, so it’s easy to run to Europe.
So what’s the big draw between Rhode Island and Cork to have Non-Stop in that one market only?
That is a lot of flying between so many cities even if not daily. You would think they would have picked one city to start with first instead of trying to build up 3 US cities all at once.
As a guess… Lots of people with Irish roots in the Northeast and Boston area. That doesn’t explain why they aren’t running SWF to Cork, but might explain why PVD is running to all 4 Irish destinations.
6 flights daily is about 1100 pax each way : not that many !!!
Still 400,000 people a year that need to be interested in flying a sardine can from the middle of nowhere to not-London or vice versa :)
I guess they decided to try different options and see what sticks
I’m curious why they’d aim for BDL and PVD at the same time. I know that both are reasonable alternatives for people heading to/from Boston and have decent sized local markets, but you’d think that it would be more cost efficient in terms of ground operations and crew scheduling/basing to stick to one or the other, at least when starting out.
Agreed, but I don’t think people in Boston even think of BDL when considering airports. It’s ~2 hours drive time, vs ~1 hour for PVD, and that’s a lot for a big city with plenty of international options of its own.
They’d probably have to lean on those cheap promotional fares to get traction in an already fairly competitive market out of BOS, as you mentioned.
Norwegian always struck me as particularly dart-boardy with their network. When Ryanair or AirAsia make aggressive expansions, there’s generally a method behind the madness.
“Dart-boardy” would probably be a good way to describe Norwegian’s choice of US airports. Not quite the bullseye (major cities), but close… enough… Hopefully. Maybe Norwegian is playing horseshoes (where close enough counts), not darts.
Spreading advertising $/€/£ over more seats for sale ?
Instead of running ads for a specific route, they can do ads for New England to the British isles, for example
Itami – I actually wonder if Hartford is an aircraft balancing act. I haven’t broken down the schedules, but I wonder if they’re routing an aircraft, say, PVD-EDI-XXX-EDI-BDL-EDI-XXX-PVD for some reason or another. There is no aircraft based in Hartford so it’s being routed from Europe. There has to be some reason this made sense.
Any chance that Norwegian might try to offer easy connections to Israel out of, say, Edinburgh, via its own metal or that of a partner?
West Hartford has a huge Jewish population, as does Northern NJ, and Rockland County, NY (southernmost NY county on the Hudson) is the most heavily Jewish county in the nation (~1/3 Jewish). A one-stop trip to Israel at the right price could be interesting.
Kilroy – Well, Norwegian serves Tel Aviv today, so it’s entirely possible, I suppose. Though I would think Norwegian wouldn’t do it unless it had enough of a local market to fill some of the airplane.
As someone said earlier Air Canada has run A320 service from Halifax to London on and off for years, though more recently it has tended to be operated using a 767 coming from Toronto first.
I would like to see these 737s in Baltimore: Norwegian direct to Europe is better than Wow via Iceland. Norwegian already operates from BWI to Martinique and Guadeloupe in the winter, it would be nice to send those planes to European destinations in the summer.
Also I can see the 737 service acting as a trail blazer to build interest until a service can support a 787.
BWI would be a candidate for 787 service sooner rather than later, since it’s so much larger, and offers so many connection possibilities… might SWA be interested in being Norwegian’s Ryanair on this side of the Atlantic?
Cranky – you are forgetting that a few years ago SY was flying MSP – LGW on a 737-800 with a fuel stop in Gander. Believe you wrote about it at the time. Not sure how profitable it was but AFAIK that service has ended. They were competing with DL offering daily service to LHR on a 767 in the same market. Maybe Norwegian can do better since they don’t have direct competition at these airports but they aren’t exactly flying to London either.
A – Yes, I DID forget that! It was Stansted actually.
http://crankyflier.com/2010/03/17/sun-country-to-fly-737s-to-london/
To each his or her own! Of course, it’s all about where you are at this or that moment in your life. And, to anyone running an airline, and to those trying to match the competition (as you may think the competition is), that’s why they pay you the big bucks!
I well remember Laker and People Express. That was then, but this is now. I don’t do Spirit, or Frontier, or Allegiant, or any code-share. Yes, sometimes I may use an EAS carrier, but I can’t image any of them will be left in a few years.
UA’s reliance on the 737 on the transcons, off to Hawaii, dreadful, but up-front, OK. I know Europe will be coming. Hopefully, there will always be an up-front where I in my old age can mutter “Let them eat cake back there in 28” seat pitch-land!
Anyway, Norwegian, best of luck to you. Do it while you can!
Am I right in thinking that there’s no UK Air Passenger Duty out of Belfast? And has it been devolved to the Scottish Parliament? Just means that the taxes on these flights will be much lower than ex London, so I can see it might be a cheap one stop from the rest of the UK.
How close are the US airports to the ski resorts? Ski tour operators might be a market to help fill the winter flights, especially given the unreliable snow in the Alps.
Flights from Belfast to the USA (or anywhere else more than 2000 miles from Belfast) do not incur UK Air Passenger Duty – this saves about £75 (US$ 93) per person compared to flights from mainland UK
Correction – direct flights whose destination is 2000 miles from London, not 2000 miles from Belfast.
So yes, anything non-stop from Belfast to the USA is free of APD
The lack of APD might make Belfast more competitive with Belfast but, obviously, doesn’t do a lot to make it competitive with other UK airports. It’s a long swim across the Irish Sea.
BTW, it can make sense to make a brief trip to Ireland on your way back across the Pond to avoid the hefty APD (especially if you WANT to visit Ireland). As a frequent visitor to both, I’d high recommend making that stop in Dublin instead of Belfast. I don’t think many people will disagree with me on this!
that’s “Belfast competitive with Dublin”
To all the naysayers – Norwegian is still using just B737s on this service. If transatlantic fails miserably, then a B737 can still be used for short haul within Europe – they won’t have great big 777s hanging around unwanted on the balance sheet
Don’t forget though they’re already doing transatlantic with 787s to bigger markets and those out of reach of the 737 MAX (OAK and LAX).
And Vegas, baby. Oh wait… they forgot it was located in the high desert and thus a hot high place. Wonder what they forgot when they planned these routes.
Don’t forget that SAS already flies 737s across the Atlantic–BOS to CPH, albeit in an all-business configuration with 86 seats: http://www.sasgroup.net/en/sas-introduces-new-daily-service-boston-copenhagen/
Sorry! Not all business class: 20 business, 60 coach. http://www.privatair.com/news/23032016-1025/privatair-commenced-daily-nonstop-flights-between-copenhagen-and-boston-behalf
People will do anything for a cheap ticket. This a bottom feeder airline who’s entire business model is based on exploiting tax and labor laws around the world to offer cheap fares ( Flag of convenience). And they will be starting a race to the bottom in safety and wages. No thanks I’ll take my business elswehere!
As a kid we flew FI from ORD (sometimes also via JFK)-KEF-LUX-Bus on to Mannheim every summer to see my grandmother. At the time FI is much more low rent than now and particularly compared to LH,PA,TW. I can guarantee you that my very working class family would take Norwegian if they could get us even close to Mannheim at any kind of savings.
In short, these flights will work. Never underestimate the discomfort and inconvenience people will suffer through when taking the family over the pond.
The only real surprise is how quickly Norwegian has moved to expand across the Atlantic once the opportunity was given to them. They do have a very impressive network between their narrowbody and widebody operations.
Other carriers that thought they would get around in a few years to starting a low cost transatlantic operation may find themselves at a disadvantage in entering the marketplace.
Narrowbodies are limited in what they can do and perhaps the 737MAX w/ a heavy passenger load more than other narrowbodies – which is why NAI’s joint widebody and narrowbody operation will give them far more market penetration than other new carriers.
The product will clearly not be for everyone but there are a lot of legacy carriers that have reduced their product to low cost carrier levels (but not prices) so consumers will see something of value.
It is easy to fill an aircraft across the Atlantic in the summer; the real test will be in the winter when few people in Europe really wants to come to the NE US. Without connections to Florida, LAS, or the mountains (if NAI could even carry a bunch of skies), I’m hard-pressed to imagine how NAI will offer a compelling story even if they come up w/ connections on the European side of their transatlantic flights.
Let’s also not forget that widebody aircraft carry lots of cargo to help offset costs – something the narrowbody LCCs won’t be able to touch. It is far from clear that NAI will be able to operate many of these flights w/ full passengers and bags in the middle of winter when winds across the Atlantic can add 30 minutes to an hour of extra flying time – even when fares are already low.
The secondary cities in the US will be grateful for the attention they are getting but they don’t have a lot of legacy carrier service for a reason… they don’t generate the volume that other cities do.
And yes the legacy carriers will aggressively compete for the same traffic esp. during the winter. And legacy carriers are buying new generation aircraft and can deploy them using premium seats if they believe there is a market.
Norwegian sees an opportunity to grow its European business given that Europe is a mature market but ultimately they will get more of an advantage as a first large mover than they will because they have great market reach.
And finally, there will be casualties including some legacy carriers that can’t adapt as well as some carriers such as those based in Iceland whose premise is a lot less compelling with nonstop flights increasing in the markets people want to fly to and not just where current technology aircraft can fly…. And that is precisely why the Norwegian model as well as other low cost carriers that uses narrowbody aircraft will always be chasing someone else that can deliver a more compelling product for less money.
As long as Norwegian maintains some US crew and uses crews based in Europe or the US, they will diffuse the criticism of their model and will create new competition that the market will measure based on its merit or not.
To be fair, BDL and SWF are among the closest airports of their size to the major New England ski areas in VT and upstate NY. That said, I think it will take some very cheap vacation packages, low fares, and/or creative marketing by Norwegian to get Europeans to consider flying to the Northeast US for ski vacations.
The comment about how Norwegian and other carriers’ new flights affect Iceland based carriers is a good one. That topic would make for a great analytical post by Brett, either now or after the impact has begun to be seen.
“which is why NAI’s joint widebody and narrowbody operation will give them far more market penetration than other new carriers.”
Tim, has Norwegian transferred the ex-LGW Dreamliners from DU to D8? I don’t think they have, so the widebodies are still flying using the Norwegian AOC.
In any case the elephant in the room for Norwegian’s UK operations is Brexit. Norwegian does have the NAUK subsidiary with a UK AOC (yet to fly). But if the UK leaves the ECAA and hence the US-EU Open Skies, and the UK leaves the single market, Norwegian may have to (a) transfer NAI routes to NAUK and get US government approval all over again for NAUK, and (b) cede full ownership of NAUK to a joint venture with a minority stake due to foreign ownership of airlines restrictions (aka Thai AirAsia).
For many leisure travelers, a little extra driving to an out of the way airport is not a significant issue. In my own situation, my family of 5 has an upcoming Hawaiian vacation and rather than pay more for the benefit of traveling out of my local airport (Sacramento) I am just driving an additional 45 minutes to Oakland (45 minute drive time to Sacramento vs. 1 hour 30 min to Oakland). The hassle part – load the car, park the car etc. are the same with either airport, but saving $500 to travel out of Oakland is well worth a few extra minutes on the road. I think Norwegian will have no trouble selling seats to the leisure traveler.
I am intrigued as to if/how IAG/BA will respond. They seem to have an antipathy towards Norwegian per their strategy at Gatwick, Will they return to the UK regions to fly to North America? Also there are suggestions/rumours IAG are going to:
1. Take more A321LRs than the 7 on order for EI.
2. Switch Manchester-ORD/NYC from AA to BA. (Read nothing substantive to back this up)
After all it is all but forgotten (because so long ago) that BA was the original pioneer of 757 flights across the Pond. The economics and capabilities of the A321NEO and 737MAX seem to open up new opportunities.
Nicc – Were I BA, I would simply match Norwegian’s fare levels but on my existing services out of Newark/JFK/Boston. I can see BA doing more than that, especially since it’s already added Ft Lauderdale and Oakland to combat Norwegian, but I’m not sure it has to.
My consolidated response to several topics discussed above.
Yes, Norwegian is a mish-mash of traffic rights but that really only matters to governments and aviation fans. They have a consistent public image and that is all that matters. Once the UK leaves the EU, Norwegian will have to shift traffic rights around but that won’t be hard to do. Every government wants to see growing business and tourism is a huge economic driver. Norwegian will have no problem showing that it is increasing tourism esp. to smaller/medium sized airports. The US will give Norwegian many passes for being a large Boeing customer. The US3’s objections will fall as long as Norwegian has US or European based crews but Norwegian is smart enough to realize that it is not worth losing those rights by bringing in non-Europeans which probably won’t lower labor costs much anyway. There are plenty of Americans and Europeans that will work for low aviation wages that are comparable to or better than what other established carriers pay and Norwegian has the advantage of being a growing transatlantic business.
Legacy carriers do not try to push to the lowest costs – they could do that if they wanted to but realize that the value they add is higher revenues than with just a low cost model. Thus, their costs are higher but they offset them w/ higher revenues.
The winners and losers in the low cost transatlantic wars will be very similar to those that have won or lost in the domestic low cost carrier wars on either side of the Atlantic. Low cost carriers in Europe have hurt many legacy carriers and low cost carriers continue to grow there. Legacy carriers in the US have adapted better than their European legacy peers but there are clear differences between the big 3 legacy carriers (plus AS which is technically a legacy carrier). There are also US low cost carriers that will be impacted because the transatlantic low cost movement is currently being driven by European carriers. The bottom line is that any existing transatlantic carrier that can lower costs as fast as or faster than the fall in unit revenues or maintain or grow revenues will be fine. Because of geography, carriers in Ireland and the UK will be most heavily impacted at the outset following Ireland, Canada and other “in-between the US and Europe” low cost transatlantic operations.
British Airways and Aer Lingus will aggressively fight the LCC invasion but in the process will and are degrading their own product – which alienates some of their traditional customers. The low cost transatlantic wars will shift further into continental Europe as aircraft technology advances and as widebodies are used in low cost transatlantic operations but some European hubs (most of which are part of joint ventures) are not the same with respect to global coverage (which hubs are designed to do) and the ability of carriers there to withstand low cost competition or their track record in doing so. Many airports in Europe and the northeast US are near capacity and that will be a factor that will limit transatlantic air travel growth at large or medium sized airports.
Norwegian’s 737 utilization will be well above industry average. I am not sure they will try to or be able to put in a bunch of short-haul “domestic” flights in their schedule other than to feed their transatlantic flights and position aircraft for maintenance. Connecting flights reduce the revenues for the transatlantic operation as well as the domestic operation compared to the best revenues in the local market so they will have to find markets that can sustain high percentages of local traffic.
Norwegian will help a lot of smaller communities and those cities and states will be their biggest advocates – that is no different from what has happened with Southwest in the US. Large cities embrace competition but they have little reason to pick or choose winners other than because of the increase tourism. Customers will “find” cheap fares and put up w/ the service levels necessary to get those fares. Unless Norwegian develops large newsworthy operational problems operating over the Atlantic, they will do fine and open new markets although clearly not all will survive – but that is true w/ every airline.
The Norwegian model may be tweaked in the future but the transatlantic low cost model is now here for better or for worse. The rest of the airline industry and individual communities and consumers have to figure out how to win in the midst of that reality.
This could hit the headwinds of reduced US travel thanks to Trump: https://www.theguardian.com/travel/2017/feb/28/us-tourism-experiences-a-trump-slump
Norwegian are no fools, the new 737 MAX are promised to have the lowest fuel cost per seat of any aircraft flying. They sold 5000 seats on the first day after announcing the new routes, so those who say there is no demand to out of the way airports may be proved wrong.
Norwegian have already announced that the planes flying to Edinburgh will then go on to Oslo and return before starting the next transatlantic crossing, by my reckoning that means utilisation is up around 18 hours a day! The real problem may by the introduction of the new aircraft, they were the first to fly the 787 across the Atlantic and had huge problems with 2 day delays, compensation payments and the need to charter in other aircraft. They will need all 6 737 MAX to operate the new routes and they will need to be certified for ETOPS from the start, if not they may live to regret their haste in starting services.
They are now very profitable, the third largest airline at LGW and worrying BA sufficiently for them to now compete to New York and shortly to FLL and OAK, the routes operated by Norwegian. No one should underestimate the power of this airline, they really do know what they are doing
Alan – Just a few thoughts.
*If you launch a new service and price it with an intro of $65, you’re going to sell a ton. All the media coverage will spread like wildfire and people will jump on it. But that’s the case for every good and bad idea.
Maintaining the momentum after launch is the hardest part.
*Norwegian is profitable, but it’s not very profitable. There’s a lot that works for Norwegian but that doesn’t mean that this new venture will. It can certainly keep it running for awhile even at a loss thanks to the rest of its network, but that’s no guarantee it will eventually succeed.
I will never, but never ever, take a 737 TATL. Nuts!
Wonder what Norwegian will do with those A321LRs come 2019. Will it truly have a 4k nm range? If it does, Norwegian can about drop birds into any airport east or along the Mississippi River during the Summer as altitude isn’t much of an issue.
And still, B6 is probably bemoaning the loss of the first mover advantage. Norwegian has made the splash, and there won’t be enough traffic to share. Will people fly jetBlue across the pond on the A321neo? they have their network to help them as well as Mint, but still, they can’t go after the Norwegian traffic or the Big 3 traffic without a big fight? Am I being pessimistic for them?
Hyun – Yeah, I think you’re being more pessimistic than I am. JetBlue wouldn’t fly from secondary airports. It’ll start with Boston which will be a clear differentiator. It also has a huge hometown following there and can connect people into the network as well. It has a much better chance.
What would Norwegian do with a twin aisle, 220 to 240 seater with a 5200nm range that it sure sounds like Boeing is going to announce for a 2025 entry into service date.