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Norwegian Air puts the brakes on Canada launch, at least until spring 2019

Norwegian Air puts the brakes on Canada launch, at least until spring 2019

Wednesday, April 11, 2018

This is an updated version of the story that ran in the April 5th, 2018 issue of Travelweek. To get Travelweek delivered to your agency for free, subscribe here.


TORONTO — Norwegian Air says its arrival into the Canadian market will be delayed until spring 2019.

In an interview with news service Bloomberg, the low-cost carrier’s CEO blamed the slowdown on the delayed delivery of two B737s.

Last month the Canadian Transportation Agency (CTA) gave Norwegian permission to begin selling tickets for summer flights. While there are still more hoops that the carrier needs to jump through, including getting the green light from Transport Canada, the CTA’s approval was seen the first step to Norwegian possibly starting transatlantic flights out of Canada this summer, as early as July 23.

A four-week delay getting the new B737s has derailed Norwegian’s plans to launch transatlantic flights from this market, says CEO Bjorn Kjos. “We got a slight delay, not much, but it gave us a month shorter pre-sale period,” Kjos told Bloomberg. Time was running out to market the new Europe flights, prompting the LCC to push off its launch in Canada until at least spring 2019.

Norwegian wouldn’t be the first LCC to come into Canada with transatlantic flights. Primera Air recently sent introductory $199 one-way fares into the market on its Toronto-London (Stansted) route for summer 2018 flights. WOW air has made inroads in the Canadian market too. The Icelandic-owned LCC started flying out of Canada in 2016.

The LCC phenomenon certainly isn’t new either. Southwest Airlines got the ball rolling in the U.S. in the 1970s and then fares in Europe took a dive with the launch of Ryanair and easyJet in the mid-1980s and mid-1990s. Ryanair is now the biggest European airline in terms of passengers flown – or at least it was until last year, when a screw-up with pilot holiday time schedules led to the cancellation of thousands of flights (and Lufthansa Group grabbed the title).

Just about every legacy airline has launched its own low-cost carrier too, from Air Canada Rouge to BA’s Level and Air France’s Joon.

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So what’s different about Norwegian? Most airline analysts point to the carrier’s aggressive growth strategy. In U.S. gateways like New York and L.A., Norwegian came in and quickly established itself with not just one or two European destinations, but many routes, like London, Barcelona, Paris, Rome, Oslo, Stockholm, Amsterdam and Madrid all now available out of New York.

In just five years Norwegian has ramped up with nonstop flights to Europe out of more than a dozen U.S. gateways. In the past few days Norwegian checked its newest two cities off its North American growth plan: Chicago (March 25) and Austin (March 27), with nonstop service to London Gatwick. The introductory fares started at US$160 one-way.

After launching long-haul flights in 2013 Norwegian now has more than 500 routes servicing a network of 150+ destinations, with long-hauls operated through fully-owned subsidiaries.

“We were the first successful low-cost airline to operate between the U.S. and Europe, which we launched back in 2013 and continuously expanded ever since. We now have more transatlantic routes than any other European airline,” says Norwegian Air spokesperson Anders Lindström. “Since we operate an all-Boeing Dreamliner fleet for our long-haul flights (and have one of the youngest and most fuel-efficient fleets in the world), it allows us to keep costs down and offer extremely competitive fares. So it’s low fares but high quality.”

Norwegian’s fare model, like most LCCs and ULCCs, also relies heavily on ancillary add-ons for revenue cash cows like baggage fees and inflight meals.

Asked about overcapacity on transatlantic routes, if Norwegian comes into the Canadian market, Lindström said: “Norwegian closely monitors and studies all markets it is interested in. If we were worried about overcapacity we would not enter that market, unless we knew we could offer something better and provide more value for money, thereby attracting customers.”

Air Canada spokesperson Peter Fitzpatrick says “there has been ‘low cost’ competition on the transatlantic for many years in the form of Air Transat, WOW and Icelandair, and this year will see the addition two new LCCs, Level and Primera, so we are very used to competing successfully in this market by the various means at our disposal.”

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Fitzpatrick adds that Air Canada’s goal “is to remain competitive in all markets we serve”, with Air Canada Rouge, branded fares including Tango and the new Economy Basic fares currently available on select flights in North America. “As we always we do, we are monitoring market developments and respond as warranted.”

Meanwhile WestJet is pushing ahead with European expansion plans, announcing earlier this year that it will add Paris flights out of Halifax starting May 31, with daily service. WestJet already offers London flights and is looking to grow its international network. And Transat is heading into summer 2018 with 17% more capacity on transatlantic routes and selling prices up 1.7%.

Of course low-cost carriers are typically no friend to travel agents, offering little to no commission. Norwegian’s travel agent portal is https://agent.norwegian.com.

“We do have quite a large portion of bookings coming through agents, and we have agreements with almost all major U.S. agencies,” says Lindström. “For Canada though, and for now, we are not in BSP.”

Norwegian has posted multimillion dollar losses in recent months as it tackles warp speed expansion and rising fuel costs. Financial hurdles and aircraft delays notwithstanding, the carrier is looking for a fleet of 30 long-haul B787s by the end of this summer. All in all Norwegian’s fleet consists of some150 aircraft including Boeing 737-800s, Boeing 737 MAX aircraft and Boeing 787 Dreamliners.


This is an updated version of the story that ran in the April 5th, 2018 issue of Travelweek. To get Travelweek delivered to your agency for free, subscribe here.

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