Arab Today, arab today pricey norways unlikely budget airline champion
Last Updated : GMT 10:28:29
Arab Today, arab today
Arab Today, arab today

Pricey Norway's unlikely budget airline champion

Arab Today, arab today

Arab Today, arab today Pricey Norway's unlikely budget airline champion

Boeing 737-33S operated by Norwegian Air Shuttle
Oslo - AFP

"Norway" and "cheap" are two words that rarely go together, yet this oil-rich Scandinavian country is where Europe's third-largest budget airline first spread its wings.
Over the past decade, Norwegian Air Shuttle has brought budget travel into the Nordic mainstream, pushing Scandinavian legacy carrier SAS to the brink.
Its latest mission is to compete on long-haul routes, a market where budget airlines have tried to gain a foothold without success, and comes at a time when all European airlines face stiff competition from state-backed Gulf rivals.
Founded as a regional airline before turning itself into a low-cost operator in 2002, Norwegian launched into a depressed market suffering from the impact of the 9/11 attacks.
"In order to survive we had to go for costs... And in order to get the costs low enough we had to grow," said Bjoern Kjos, the fighter pilot-turned-lawyer who is the company's chief executive.
At the heart of Norwegian's success has been a large and modern fleet that consumes less fuel than those of its rivals.
It also focuses on large population areas to ensure flights are never half empty. By contrast, traditional European carriers use connecting flights to fill their planes, meaning the aircraft spend more time in the airport.
"The aircraft isn't earning any money sitting on the ground," Kjos told AFP.
Norwegian's red and white aircraft have an average turnaround time -- the time an aircraft must remain parked at the gate -- of just 20 minutes in the country's airports.
In 2012, the group placed the largest order in European aviation history as it agreed to buy 222 Boeing 737s and Airbus A320neos for a list price of 16.6 billion euros ($21.6 billion).
As it begins to take delivery of the new generation aircraft in 2016, the company will save up to 15 percent on fuel.
From its headquarters -- which once belonged to arch-rival SAS before they had to downsize -- outside of Oslo the group oversees an ever-expanding route network. It has opened bases in the other Nordic capitals, several Spanish cities and, most recently, in London.
The set-up allows it to hire staff locally on lower salaries than in Norway. For every 100 euros in revenue, Norwegian pays 17.4 euros in labour costs compared with 32.1 euros at SAS, which is 50 percent owned by the governments of the three Scandinavian nations.
This is partly why the low-cost carrier has been profitable since 2006 while troubled SAS, despite several restructuring plans, has only turned a yearly profit once since 2007.
- Headwinds -
Since last year, Norwegian has offered long-haul flights from Scandinavia to a handful of US destinations and to Bangkok, and since last summer between London's Gatwick and North America.
"The challenge on the Atlantic is that 87 percent of the traffic has been... controlled by the three alliances and of course they don't like any competitors, at least they don't like a new low-cost entrant," Kjos said.
Amid outrage from his rivals, trade unions and some US politicians, the company is still waiting for Washington to grant a license to its Ireland-registered long-haul subsidiary, Norwegian Air International (NAI).
The advantages of an Irish licence include using cheaper non-European staff on transatlantic routes, prompting accusations of social dumping.
"The airline won't even be flying into or out of Ireland. It's just to avoid the application of strong Norwegian labour and social laws," said Ed Wytkind, president of the AFL-CIO, the largest federation of trade unions in the United States.
On the federation's website, he lashed out at "a Wal-Mart-style race to the bottom for cheap labour". The long-distance routes have also been hit by the teething problems of the 787 Dreamliner, the eighth of which it will receive next year.
Technical problems with the planes have caused disruptions for passengers on affected flights and delays in delivery of Dreamliners has forced Norwegian to resort to expensive leased aircraft.
Along with expansion costs, this has weighed on Norwegian's bottom line and dented its image. The company is facing prosecution in Sweden and Norway, and the term "Kjosfast" ("grounded because of Kjos") has entered the language.
"They lack aircraft for the time being," said Kenneth Sivertsen, an analyst at Arctic Securities, adding that "it's likely that they will make money or at least break even next year" on long-haul flights.
"It will have taken them two years. This is quite acceptable," he said.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today pricey norways unlikely budget airline champion Arab Today, arab today pricey norways unlikely budget airline champion

 



Arab Today, arab today
Arab Today, arab today Mohamed Bahari prepares new collection for spring 2017

GMT 06:15 2017 Monday ,27 February

Mohamed Bahari prepares new collection for spring 2017
Arab Today, arab today As Olympics loom, China plunges into snow biz

GMT 10:08 2017 Tuesday ,28 February

As Olympics loom, China plunges into snow biz
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today UN envoy sets out framework

GMT 07:25 2017 Monday ,27 February

UN envoy sets out framework
Arab Today, arab today Kalam Nawaem made a difference in social issues

GMT 06:43 2017 Tuesday ,28 February

Kalam Nawaem made a difference in social issues
View News in Arabic - Business: أخبار الشركات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Parliament considers solutions to overpopulation

GMT 20:27 2017 Monday ,27 February

Parliament considers solutions to overpopulation
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Aspires present the story of Egypt’s first president

GMT 06:18 2017 Sunday ,26 February

Aspires present the story of Egypt’s first president
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 06:42 2017 Saturday ,25 February

Reasons for the delay 'On the Stairs of Servants'

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 10:51 2017 Saturday ,25 February

Pigs with edited genes show resistance

GMT 18:28 2017 Saturday ,25 February

Tourist guide explains types of tourism

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 06:28 2017 Tuesday ,28 February

Dumbphones survive rise of the smartphone

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday