Norwegian CEO Update
Norwegian Air Shuttle CEO, Bjørn Kjos, discusses the new 737MAX-operated Cork-Providence route and looks at the potential for the A321LR on North Atlantic routes. He anticipates further Asian routes, subject to Russian overflight rights and gives an update on progress with Norwegian Argentina. He also discusses the profitability of Norwegian’s long haul network and the international
Transcript
Bjørn Kjos:Yeah, actually it's very interesting and people like it because it's very cheap, affordable flights, $100 to fly to the US. I think that's new for a lot of people and we saw from a lot of places has been very well received. So we will— we didn't anticipate that we would do it over the winter, but we will do it over the winter also from many airports. Obviously, a lot of people like to go to Stewart, New York, but there are many other places that we like to go to in the US with a narrowbody, and that is the smaller catchment areas. Where we can fly. It's a very, very quick turnaround, very easy access through immigration, as an example. Like Stewart and Providence, it takes you 10 minutes and you are through it. So I usually say that you are down to your second gin and tonic before your friends arrive through JFK or Newark. Obviously, if you start from going into Asia, I mean, it covers all India and far into and most of China, even from a grand circle route, obviously the shortest way to fly. But if you go west, you can reach Midwest, no problem. So you can take a range of mid-sized cities that isn't so served directly today. Far Eastern market is incredibly interesting, but we also have to have overflying permits of Russia, and it takes time to get overflying permits. So that is the reason why we haven't started going Far East, especially in northern part of Far East. We have applied for concessions on a lot of routes into Argentina. Domestic Argentina, but also from Buenos Aires and Córdoba and out to other cities in South America. It's obviously underserved, it's high fares and very underserved market, and Argentina, it is a hidden jewel. It's incredibly interesting for tourists to go to Argentina, so What we see is that it's one of the areas that have the absolutely most, yes, to say it, it's the most interesting areas to go to for tourists. First of all, Argentina, of course, but also what we concentrate also a lot on is the long-haul. And we try to build out the short-haul with the other airlines that can support our long-haul growth. And typically EasyJet, that serves a lot of routes in and out of Gatwick, serves a lot of routes out of airports that we fly a lot in and out of on the widebody, so that will fit us very well. And we haven't even started on Asia. We need to start. We have started flying into Singapore. Obviously, we'd like to do the same in and out of Singapore. So there are many areas that you can build up a huge network with operators that you can also compete with, and you can have a Cooperation with. We have been profitable for ten years, and we don't intend to go into losses. So we and as we told the market, the long haul is profitable. It takes time to build it real, real to be real profitable. It always takes time. It takes a year. Might take two years to be a real, really. Profitable operation. It should be. We have everything into it that we have with new airplanes and a very, very low cost of operation. So, and we have broken into the market with— we fly 95% load on the airplanes. So obviously everything is there. The passenger loves the concept. But it takes— some areas it might take months, in other areas it might take a year and even 2 years. But we will definitely come there. Norwegian, everybody, or Norwegian, what's it known as, it's very reliable as a country or a region. We don't 1,000 years ago we fought many wars with the Vikings, but later on we are fairly friendly people and it's a modern state, it's a highly developed state and we give out the Peace Prize, so we are friends with everybody. So I think that actually also That's also converted into how Norwegian is received in the market as a brand. So we have looked at it for 10, 15 years ago. We looked at it, should we change brand when we went into other countries? And the feedback, don't change the brand, it's absolutely perfect for what you are doing. So it's quality and safety. And it's known to deliver a good product. Like, Schiphol, as an example, have paved the road for us.
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