Delta Air Lines stated (21-Mar-2013) it would significantly grow its presence at London Heathrow Airport when its partnership with Virgin Atlantic comes into force later this year. Heathrow is the world’s top business destination: of the top 10 transatlantic corporate markets, eight of them are to London Heathrow. Delta and Virgin expect to jointly offer 21 daily services from London Heathrow to the US by the end of 2013. Delta president Ed Bastian said: "London Heathrow is the most important access point for corporate travellers and that was driving force behind our decision to invest in Virgin Atlantic. Given the constraints on growth at Heathrow, our partnership with Virgin will enable us to expand our presence at this airport and level the field a little with our competitors, while offering customers even more in terms of choice and benefits." Effective 31-Mar-2013, Delta will launch a third daily service between Heathrow and Atlanta for a total of nine daily nonstop flights to five US cities: New York-JFK, Atlanta, Detroit, Minneapolis-St Paul and Boston. Customers will benefit from almost 30,000 weekly seats offered on Delta flights between Heathrow and the US in summer 2013. [more - original PR]
Delta-Virgin Atlantic partnership to expand options out of London Heathrow
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Norwegian Air part 2: long haul growth shows its strategic innovation, but increases debt burden
Norwegian plans to add US routes to its Edinburgh base, a development considered in part 1 of this report, adding to its growing list of European long haul bases. However, its Edinburgh-US routes will use new Boeing 737MAX-8 aircraft – its first deployment of narrowbodies for long haul. It has also ordered 30 Airbus A321neoLRs for long haul use. Narrowbodies open up new possibilities for routes between the UK (or other European markets) and the US east coast.
Norwegian also plans to add non-US destinations to its UK long haul network, with details expected during the course of 2017. Norwegian's flexibility to develop its long haul operations from the UK would be improved by the grant of a US foreign carrier permit to its UK-registered subsidiary, Norwegian Air UK.
Norwegian has had to surmount many obstacles to build and grow its global network – which may also include Latin America in 2017, when it will accelerate long haul ASK growth to 60%. However its rapid expansion, currently driven mainly by long haul growth, has led to a rapid increase in debt, and is likely to weigh on unit revenue. Norwegian's undoubted strategic innovation can only be sustained if it is financially successful.
Norwegian Air part 1: a second UK long haul base at Edinburgh. Matches Virgin on Gatwick-US seats.
Norwegian's plans to add Edinburgh to its long haul bases are a further indication of its constantly evolving strategic development. Driven mainly by long haul, Norwegian returned to strong growth in 2016 after a respite in 2015. Norwegian's 2017 expansion plans will make the LCC Scandinavia's largest airline by passenger numbers, ahead of the legacy airline rival SAS.
The UK is Norwegian's biggest European long haul market outside Scandinavia. This has so far been based entirely on its network at London Gatwick, where its weekly seat capacity to the US now equals that of the market leader Virgin Atlantic. However, Norwegian is looking beyond Gatwick and will add trans-Atlantic routes from Edinburgh in 2017, for the first time deploying a narrowbody (Boeing 737MAX-8) on its long haul network. It has yet to announce the US destinations from the Scottish capital, and also plans to fly to the US from other UK cities.
This report considers Norwegian's Edinburgh long haul plans in the context of its existing UK operations. Part 2 looks at Norwegian's use of narrowbodies for long haul and the application by its UK subsidiary for a US permit. Part 2 also touches on the financial impact of Norwegian's rapid growth.