European Union, the US, Iceland and Norway signed (17-Dec-2009) an aviation agreement to extend the scope of the EU-US Open Skies Agreement to Iceland and Norway. Both countries are fully integrated in the single European aviation market and apply all EU aviation legislation. EU Transport Ministers also reviewed the progress made so far in the second-stage negotiations between the EU and the US. If no agreement has been reached by Nov-2010, both sides - now including Iceland and Norway on the European side - could suspend certain traffic rights. [more]
Iceland and Norway join EU-US Air Transport Agreement
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Norwegian Air's NAI at last gets final approval of US rights in a boost to long haul growth
On 2-Dec-2016 the US Department of Transportation (DoT) served an order granting Norwegian Air International (NAI) a foreign air carrier permit, as required by the EU-US open skies agreement, to which Norway is a party. Almost three years after NAI's application it seems that the EU's 30-Nov-2016 filing for arbitration finally panicked the DoT into finalising its tentative approval given eight months ago.
Since launching long haul operations in summer 2013 Norwegian has grown its long haul network to 37 routes operated in 2016. In spite of the delay in receiving the US permit for NAI, 34 of these routes are between cities in Europe and the US. The only Asian destination is Bangkok, linked to the three Scandinavian capitals.
The DoT's final decision means Norwegian can now use its Irish-registered subsidiary NAI to fly long haul routes from Europe to destinations both east and west with the same operating airline, and with EU traffic rights in both directions. This should increase its operational flexibility and cost efficiency and allow lower fares on a greater number of routes. Norwegian already has ambitious long haul growth plans. Expect these now to accelerate further, and not only to the US.
Ryanair, easyJet, Norwegian, Wizz Air, Pegasus Airlines: Europe's top LCCs' collective margin drops
CAPA's previous analysis of the 3Q2016 results of Europe's big three legacy airline groups highlighted a fall in their collective operating margin, after growth in 1H2016. This report shows that Europe's five leading LCCs, in aggregate, also suffered a fall in profit and margin in the quarter.
Three of the five – Ryanair, Norwegian and Wizz Air – improved their profit margin in the quarter, but easyJet's drop in margin was heavy enough to bring down the collective result. Pegasus' margin also declined.
Nevertheless, the LCC five remain collectively far more profitable than the legacy three. Moreover Europe's two most profitable airlines, Ryanair and Wizz Air, look set to increase their margin lead this year. Even easyJet, which has had a bad year by its standards, achieved a higher margin for calendar 9M2016 than the most profitable of the big three legacy groups, which was IAG.
The divergence of results in the European sector suggest that not all airlines are following the same cycle. However the collective margin decline for the continent's leading LCCs, and its major legacy airline groups, at least gives reason to question whether or not the cyclical upswing may have run its course.