Norwegian stated (15-Oct-2013) its board of directors has approved a restructuring of the company. Under the current holding company, Norwegian Air Shuttle ASA, two wholly-owned subsidiaries will operate with separate air operators certificates, one to be based in Norway and the other in the European Union (EU). The EU subsidiary will operate initially from Finland, commencing operations in 1Q2014, with further bases to be established in Spain and the UK. Each subsidiary will operate with a separate management and employee structure. Norwegian CEO Bjørn Kjos said: "Norwegian goes from being a Scandinavian into an international company, our organisational structure must be modernised and adapted to this. We are primarily dependent on securing traffic rights into new markets. We will also retain Norwegian roots through a new Norwegian operating company. The aim is to ensure that Norwegian in the future may be a strong and competitive global airline that creates value and provides secure jobs for all." [more - original PR - Norwegian]
Norwegian announces restructuring and establishment of EU-based subsidiary
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Norwegian Air's North Atlantic seats up 51% this summer, but longer term long haul growth needs NAI
Norwegian continues to await the long-delayed approval of a US foreign carrier permit for its Irish subsidiary Norwegian Air International (and for its UK subsidiary Norwegian Air UK). US traffic rights for these two subsidiaries would give Norwegian the opportunity to fly both east and west with the same operating airline and with EU traffic rights in both directions. This would increase the operational flexibility and cost efficiency of its long haul operations and allow lower fares on a greater number of routes.
Nevertheless, in the meantime and aided by low fuel prices, Norwegian is getting on with an ambitious trans-Atlantic expansion plan and has now carried three million passengers between Europe and the US since 2013. Its summer 2016 seat capacity has jumped by 51% year on year (based on OAG data for the week of 5-Sep-2016), including nine new routes this summer. It plans two more routes in the coming winter schedule and four US routes from Barcelona in summer 2017.
Well over half of Norwegian's North Atlantic routes are new to the market, which has been significantly stimulated by its entry. This has provided choice and lower fares for passengers, and created new airline jobs. Those still seeking to block approval for NAI and NUK are acting against the interests both of consumers and aviation workers.
Palma de Mallorca Airport: new Eurowings base in price-sensitive market; capacity is accelerating
The announcement by Eurowings that it plans to establish a base with two aircraft at Palma de Mallorca Airport next spring focuses attention on Spain's number three airport by passenger numbers. One of Europe's most important airports for LCC capacity, Palma is also very dependent on the summer schedule. The low point of the winter schedule has 78% fewer seats than the peak summer week.
Traffic at the airport held up relatively well during the second phase of Spain's 'double-dip' recession in 2011 to 2013, but its passenger growth has lagged that of the country as a whole since then. The mix of airlines has been in some flux, with Palma's leading airline airberlin gradually losing share to LCCs and the seat-only sales of charter airlines. Ryanair, number two at the airport, has returned to capacity growth there in 2016 after two years of cuts.
Eurowings' new base at Palma in May-2017 will follow the establishment of bases at the airport by easyJet and Norwegian in 2016. It is certainly a market that seems to attract the interest of Europe's leisure-focused airlines, but strong capacity growth at Palma (and elsewhere in Spain) increases the downward pressure on yields in a price-sensitive market.