I’ve written a bit about low cost carriers trying to find a way to juice revenues through connecting passengers. Ryanair has started selling connections on its own aircraft and has begun to sell tickets (not connections) on other airlines. Frontier has talked up its ability to connect people in the US. Even London’s Gatwick Airport has gotten into the game by selling connections between airlines that don’t work together. Norwegian has been talking about joining the party for some time, and now the plan has finally come to fruition through easyJet’s new portal. The implementation isn’t great, but at this point, Norwegian needs to take what it can get.
When low cost carriers start, they usually shy away from connecting traffic. The reason? They can fill their airplanes with travelers flying nonstop, and that’s almost always a better proposition. In general, airlines get better revenues on nonstop flights, and their costs are much lower (no transferring bags, dealing with missed connections, etc). But as time passes, airlines realize growth opportunities start to dry up and they need more traffic sources to keep growing. Connections can provide that boost, and Norwegian needs that desperately.
Norwegian has grown like a weed over the last couple of years and now flies to, I believe this is correct, 832 cities in the US. It has chosen some routes that seem highly unlikely to be able to survive on local traffic alone. It has a ton of aircraft debt, and things aren’t looking so rosy for the airline. It needs to get some more revenue in the door. For most of the places it flies in the US, it can’t get a partner to help. JetBlue and Alaska are the only two airlines of substance that like to play nice with non-alliance partners, but they can’t really do much in most of the airports where Norwegian flies. And there is no way a legacy airline is going to provide any assistance to an airline which has done nothing but depress fares to crazy low levels.
Over in Europe, however, it’s a different story. The low cost carriers over there like Ryanair and easyJet have become more receptive to taking connections if they can get their fair share of revenue. Norwegian is desperate whereas Ryanair and easyJet are not, so those two can negotiate from a position of strength.
After a lot of talk, easyJet has put up a branded connecting product which it calls “Worldwide by easyJet.” If you’ve used GatwickConnects, then this will look very familiar. It’s powered by the same engine. To start, easyJet is feeding Norwegian at, surprise, Gatwick. And the way it works is pretty straightforward but in an utterly confusing way. Look at this to see what I mean.
I punched in a one way flight from Los Angeles to Berlin on October 4 on the Worldwide by easyJet site, the GatwickConnects site, and individually on the easyJet and Norwegian sites. What you see is odd since the fares vary, though I assume some of the discrepancy can be explained by currency conversion issues. (Though I have no idea why the Norwegian flight is so much cheaper on GatwickConnects.) What is clear is this. The connections are simply the sum of two local fares plus an extra GatwickConnects fee.
This kind of thing seems like a no-brainer. Nothing changes with baggage handling. People still have to collect their bags and re-check them. There’s just a counter in baggage claim to make it easier than lugging bags back up to the ticket counter. There is increased liability in that it guarantees that people will be reaccommodated if they miss their connections, but considering this service requires a minimum of 2.5 hours on a layover, there won’t be a ton of those. Besides, I assume that easyJet and Norwegian have no liability there. The GatwickConnects fee has to act like insurance, going into a pot of money that gets used in the event that someone needs to be rebooked.
Eventually this will be expanded to other connecting points, though I’m not quite sure how that will work. Gatwick has been instrumental in pushing this plan forward without the airlines even being involved, so it’s a natural place to start. I shudder to think how hard it’ll be to get something like an Italian airport to cooperate.
If this is a no-brainer, then why is it that Ryanair has shunned the plan? It’s likely not that Ryanair has dismissed the idea entirely. It’s just that Ryanair doesn’t want to do it with Norwegian. For starters, Ryanair’s boss Michael O’Leary has been quite vocal lately suggesting that Norwegian doesn’t have much cash to keep going for much longer. If that’s the case, then why would Ryanair want to enter into an agreement that would support a big competitor on the ropes? (Remember, Norwegian doesn’t just have money-losing long-haul routes. It also has a short-haul network which adds a ton of capacity within Europe.)
Ryanair doesn’t need this, but Norwegian likely does. If Ryanair thinks Norwegian is on the ropes anyway, then it’s smart to not try to help rescue it. But Ryanair still knows there is value in connecting people to long-haul airlines in general. It has seen Alaska and JetBlue do it in the US with great results. It just has to pick which partners make sense.
As for Norwegian, things don’t look good, and it’s going to be a long, cold winter for the airline, but connections can only improve things. As for easyJet, Norwegian is just the start. Whether Norwegian exists in the long run doesn’t matter. Connections done right can benefit easyJet and any other airline that can find a partner with a complementary network.