- Passenger traffic (RPKs): +2.5% year-on-year;
- Passenger load factor: 65.3%.
AEA reports 2.5% rise in passenger traffic on North Atlantic services for week five 2011
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Norwegian Air: longhaul-led capacity acceleration & rising fuel price may expose margin fragility
Norwegian's long haul operation has become its main growth engine. Although long haul still accounts for fewer ASKs than its short haul network, it will contribute more than half of Norwegian's incremental ASKs in 2017. Since the airline's long haul launch in 2013, Norwegian's widebody flights have enjoyed higher load factors than their short haul counterparts, and the company has broken new ground with its multi base long haul strategy outside its home market.
After Norwegian entered long haul it met a sudden drop in profitability, suffering losses in 2014. Its results have recovered since then, leading to its highest ever net profit and operating profit in absolute terms in 2016. At first sight this might indicate that Norwegian's long haul has healed its growing pains, and is maturing into more sustainable profitability.
However, there is evidence that Norwegian's profit recovery may have had more to do with lower fuel prices, helped also by tighter capacity growth in 2015. Moreover, its 2016 operating margin was below its own historic peak. With Norwegian facing rising fuel prices and accelerating its capacity growth in 2017, the robustness of its margin recovery will be tested this year.
Aer Lingus part 2: vies with Icelandair, airberlin, Norwegian as leading Nth Atlantic value carrier
Aer Lingus' mission statement includes an aim to be the leading value carrier across the North Atlantic. Although this is not explicitly defined, it can validly claim to be among the top four in this category. Also vying with Aer Lingus for this title are Icelandair, airberlin and Norwegian.
Part 1 of this report on Aer Lingus looked at the development of its capacity and its financial performance, both before and after the acquisition by IAG in Aug-2015. This second part compares its North Atlantic network and its unit cost positioning with those of Icelandair, airberlin and Norwegian.
All four are currently pursuing rapid growth between Europe and North America and have similar weekly seat capacity scheduled in this market for summer 2017. Their trans Atlantic networks differ by their numbers of North American destinations, European hubs serving that region and European destinations connected to those hubs.
Aer Lingus is well placed among the four, but cannot currently claim to be the leading North Atlantic value carrier. Norwegian, with multiple European long haul bases, is developing quite differently from the other three. Moreover, although Aer Lingus is cost efficient, Norwegian has a significant CASK advantage.