Norwegian Air Shuttle operated (30-May-2013) its first long-haul service, Oslo Gardermoen-New York John F Kennedy service on 30-May-2013. Norwegian Air Shuttle CEO Bjørn Kjos said, "The launch of our intercontinental routes is an important milestone in Norwegian's history. Our goal is that even more passengers should afford to fly – also to other continents". The airline plans to increase frequency on Oslo-New York service from three to four in future, while from 29-Nov-2013 the airline will offer daily frequencies between Scandinavia and New York. Stockholm Arlanda-New York John F Kennedy service will launch on 31-May-2013 while Oslo Gardermoen-Bangkok Suvarnabhumi service will launch on 01-Jun-2013. The airline plans to operate its long-haul services using Boeing 787-8 aircraft which are to be delivered from late Jun-2013. Until then the airline's long-haul services will be operated using an A340-300 aircraft leased from HiFly. [more - original PR Norwegian] [more - original PR Norwegian - Oslo Airport] [more - original PR]
Norwegian Air Shuttle operated first long-haul service on 30-May-2013
You may also be interested in the following articles...
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.
SAS' new foreign bases in London & Spain show rare innovative thinking for a legacy airline
On 01-Feb-2017 SAS announced that it is to establish a new AOC in Ireland, with operational bases in London and Spain. It has yet to specify the airports that will become its first bases outside its three Scandinavian home countries. SAS is following a course established by Norwegian, apparently forgetting its previous objections to its LCC rival's approach.
Indeed, it seems that SAS' move is a pragmatic response to intense competition from LCCs, particularly from Norwegian. According to SAS' 2016 Annual Report, 65% of its ASKs compete with LCCs. Scandinavia's high labour costs are a significant handicap in competing with airlines that have bases outside the region.
Spain and UK are its two biggest markets outside Scandinavia, with London Heathrow its biggest non home airport. After years of cost reduction programmes – also years of initiatives aimed at enhancing the appeal of SAS' product and brand to its core target market of Scandinavia's frequent flyers – a bolder step is needed. SAS will be a very rare example of a European legacy airline with bases outside its home market, more than 20 years after market liberalisation presented the opportunity.