Norway's Avinor reported (11-Nov-2013) international traffic showed the highest growth in Oct-2013, increasing by 7.9% year-on-year. Domestic passengers increased 2.4% for a total of 4.5 million passengers at Avinor airports, up 4.4%. Among the major airports, Oslo recorded a 3.2% growth while Bergen Airport recorded an 8.7% growth, Trondheim Airport passengers increased by 5.4% and Stavanger Airport passengers increased 4.8%. Meanwhile, aircraft movements to/from Avinor airports increased 3.9% and overflights increased 12.9%. [more - original PR]
Avinor airports pax up 4.4%, led by international traffic
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Oslo Gardermoen Airport seeks Asian flights to leverage tourism to Norway; perhaps the new Iceland
Oslo Gardermoen Airport has sat out the recent boom in Asian growth. This is not just in comparison to neighbouring Helsinki's rapid Asian growth in tandem with Finnair, but even more broadly. Norway is the largest Western European country without a flight to China, and is the smallest of Western European countries with flights to Asia. Its only destination is Bangkok.
This is a juxtaposition to Norway's strong credentials: maritime and gas businesses, a wealthy population (much more so than Finland's) for outbound travel, and untapped year-round tourism opportunity – not just for Oslo but for all of Norway, from fjords in the summer to northern lights in the winter.
New management at Oslo airport wants to regain the initiative in Asia. Norway has the credentials to follow Iceland's sudden rise in tourism, especially from China. Management is considering foreign airlines, since SAS is in low-growth mode and has historically favoured Copenhagen, and Norwegian Air Shuttle lacks US approval for the NAI license it seeks – but perhaps more importantly is unable to access Russian overflight rights.
SAS eyes lower labour cost bases outside Scandinavia as the airline's margin starts to fall again
A harsh truth for SAS is that improvements to its network and product, and its focus on Scandinavia's frequent travellers, have not isolated it from unit revenue weakness. Moreover, in spite of very creditable progress with unit cost reduction, it still has a high cost base. In FY2016 its operating margin started to turn down again. In addition to further targeted cost savings SAS is now considering further, more radical, changes to its production model.
In particular, it is assessing whether or not to establish operations outside Scandinavia for some of its European traffic. The European airline market includes a fast-growing and price-sensitive leisure segment, where SAS tries to compete against much lower cost operators that are not weighed down by Scandinavia's very high labour costs.
Even Scandinavia's most significant LCC, Norwegian, has established bases in the UK and Spain, and many other LCC competitors have bases across the continent. Indeed, it would seem that SAS, once an opponent of Norwegian's plans to use Ireland as a trans-Atlantic base in search of lower labour costs, has borrowed a page from its rival's book on how to re-write airline strategy.