15 OCTOBER 2018


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Article from BTNews 15 OCTOBER 2018

COMMENT: Counting chickens

Norwegian Air’s CEO and founder Bjørn Kjos was quick to make the most of last week’s revelation by the Port Authority of New York and New Jersey that his airline had beaten British Airways to become the biggest non-US carrier on transatlantic routes to and from the New York area.

He is right to make hay while the sun shines and he had some good points, taking a swipe at inflated fares and outdated industry practice. “Fares have been too high for too long as transatlantic routes have been long dominated by carriers with outdated legacies running on fumes,” he declared. Not only that, but Norwegian, he said, would continue to spread its transatlantic wings with a third daily service between London and New York JFK from 28 October.  See Atlantic traffic shock in this issue.

“With brand new aircraft that are the most fuel-efficient over the transatlantic skies, customers can look forward to receiving a high-quality flight experience to and from New York and globally with the leading premium low-fare airline.”

BA hit back swiftly, with its spokeswoman saying: “Our commitment to New York is as strong as ever. We fly up to 70 times a week from all three of our London airports, and we recently announced a $65m investment on new lounges, improved food, seating and shops at JFK Terminal 7".  No mention that Norwegian operates from the UK out of Gatwick whilst BA, for the most part, is centred on Heathrow "Tops for connectivity".

Norwegian was also further cautioned against being too quick to celebrate with BTN editor-in-chief Malcolm Ginsberg in response to a request for comment telling The Times: “Numbers mean nothing; it is the profitability that counts and that we will see later in the year.”

BA thrives on its ‘up front’ traffic and the fact that from Heathrow it serves 22 North American destinations, not just New York. Norwegian needs to get into partnerships with US and Canadian regional carriers if it really wants to make money on its transatlantic routes.

It will have to make its mark in the US domestic scene. BA’s alliance with American Airlines is a formidable pairing to take on.

Norwegian is already having trouble shaking off suggestions it is growing too big too fast and as a consequence could run into financing problems. It is right to make the most of the latest figures and trumpet its young fleet and – especially – the fuel efficiency that brings.

But the “traditional” airlines as Kjos would describe them, are starting to respond. They will soon have new aircraft of their own and are in many cases already selling a new budget class of ticket. Some are setting up low-cost airlines of their own to combat the likes of Norwegian – something that has even spread to BA’s parent company, IAG, with its new carrier Level.

The possibility of a second runway at Gatwick (see this issue), with the consequent effect on slots, could also become a factor in the debate.

As already stated, it’s the profit that counts.

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John Jones,

It was when Laker out-carried BA on the LON/LAX route that BA realised they had to act.