asctty
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Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 6:53 am

The CEO of Norwegian is suggesting that he can compete with the long haul operators using an LCC strategy. IMHO he has yet to conquer Easyjet and Ryanair in Europe regarding routes and passenger numbers. Has he even a remote chance further afield? The article: http://tinyurl.com/bqsb4u9
 
NASBWI
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 7:03 am

One can hope, I suppose. Long-haul low-fare travel has been tried before - and it has failed (I'm thinking PeoplExpress and their trans-Atlantic flights). However, the market is a bit different now than it was in the 1980's, and there may just be a large enough market for long-haul economy that hasn't yet been tapped by anyone else. I don't know how Scoot is doing financially, but no one seems to be complaining about their service; it just requires one to remember that (almost) everything is ala carte, unlike similar flights with legacy carriers.

Many people would like to traverse the globe, and not have to pay out the nose for it. If enough people are willing to skip certain amenities (or pay extra for them), then I say "let 'em have it!" For those that turn their noses up at such service, well, you still have your trunk carriers to fall back on.   . Personally, I hope this venture works our for Norwegian.
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CXfirst
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 7:44 am

Norwegian does have one advantage over other long-haul LCC's that have failed, and that is feed. It has a European network, and extensive Scandinavian network. So, perhaps, it is more comparable to Air Asia X, which I believe is doing fine.

Additionally, it is starting operations with leading edge technology, and perhaps can make a profit even with cheap tickets.

-CXfirst
 
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Vasu
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 7:50 am

How do people think DY will do with its LGW base, which starts this week? My flight on Friday to NCE looks to be pretty full, but when you're going head-to-head against the likes of Easyjet with no real advertising in the UK, who knows...
 
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CrimsonNL
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 8:01 am

I think DY's Longhaul will do very well in terms of passenger numbers. I think the number of people that will give up legroom, free food and in some cases their dignity for a cheap ticket, should not be underestimated. One could argue of course that the yields will be rather low.

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okay
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 6:37 pm

Quoting CrimsonNL (Reply 4):

I don't think there will be any problem finding people who are ready to "fly cheap" by not having any free frills. Where they are going to have problems is yields. They have to indeed offer very cheap deals as in the minds of customers they are low cost, people know not to expect anything for free while on board, luggage wise etc. If they price the tickets anywhere close to normal airlines, they will have a hard time explaining why to choose their stripped down product over someone else who is offering more than the seat. People become more sensitive as the flight time grows longer.

It is going to be interesting to see how it goes for DY.
 
skipness1E
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 7:04 pm

Quoting Vasu (Reply 3):
How do people think DY will do with its LGW base, which starts this week?

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AirPacific747
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 7:05 pm

Quoting asctty (Thread starter):

The CEO of Norwegian is suggesting that he can compete with the long haul operators using an LCC strategy. IMHO he has yet to conquer Easyjet and Ryanair in Europe regarding routes and passenger numbers. Has he even a remote chance further afield? The article: http://tinyurl.com/bqsb4u9

Funny he calls it LCC. I'd say the difference between DY and any other carrier on longhaul isn't that great.

Recently they introduced tickets to Fort Lauderdale which initially looks cheap but after you add bagage and food, it is suddenly around the same price as the competitors.
 
LN-KGL
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 7:57 pm

As far as I know, there isn't a non stop competitor to Norwegian between Copenhagen and Fort Lauderdale - and that's also why CPH will reduce the take off charges and the passenger charges with between 80% and 100% the first year.

[Edited 2013-04-02 12:58:49]
 
cuban8
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 10:06 pm

Quoting asctty (Thread starter):
Has he even a remote chance further afield?

I hate being the pessimist here, but I believe Norwegian is going to face big problems with their long-haul venture. The reasons why I believe it will are the following:

- Norwegian's cost structure for the long-haul operation was based on having cheap crew from Asia. As far as I know, the Norwegian state has forbidden that kind of labour under a Norwegian registry.

- SAS, which would be one of their main competitors have highly reduced their costs (becoming more competitive) and has also a frequent flyer program and Star Alliance offering connections making them attractive for the high yield passengers which I believe Norwegian could need.

- Norwegian is initially replacing their 787's to come by A340-300 which makes the start of their long-haul venture more costy and complicated.

- Norwegian is going into a market with a lot of competitors: SAS, Finnair, Thai, SIA, Emirates, Thomas Cook, TUI and possibly KLM for the long-haul destinations like Bangkok, Phuket etc and getting more and more head to head with Easyjet and Ryanair on the short haul market.

- Norwegian has feeding traffic, but again most of that comes from the Scandinavian countries which means less than a 20 million in population. I have a hard time seing passengers from Europe transitting in Oslo/Stockholm and getting a more competitive price than for instance via Amsterdam with KLM.

- The long-haul low cost concept has always been a tough market to catch and I believe that if there was that much business to make, both Easyjet and Ryanair would have already had something up and running. Therefore, I see it hard for Norwegian to make it work.

- Finally, when you look at the general conditions in Norway (and Scandinavia in general), it's an industry which is highly taxed, has expensive labour, has high fuel prices which makes an LCC operation very hard in comparison to Ireland or UK.

That being said, I'd like to be proven wrong. Most of my friends are working in Norwegian and it would be a pleasure to see them succeed. I just think this long-haul is one step too far especially since Norwegian will fight on many fronts.
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cmf
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 10:25 pm

Quoting asctty (Thread starter):
IMHO he has yet to conquer Easyjet and Ryanair in Europe regarding routes and passenger numbers.

Why do they need to do this? I don't know there is a price for having most routes and passengers. From personal experience the only thing you get from reaching the no 1 position is a big target on your back.
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B777LRF
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Tue Apr 02, 2013 10:44 pm

Quoting CXfirst (Reply 2):
So, perhaps, it is more comparable to Air Asia X, which I believe is doing fine.

That would be quite an exaggeration. AAX are, in fact, performing quite inconsistently and not long ago discontinued most - if not all - of its services to Europe. They are maintaining regional routes, an option NAX cannot fall back on if the long-haul doesn't work.
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Boeing744
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Wed Apr 03, 2013 1:45 am

Quoting cuban8 (Reply 9):
Norwegian is initially replacing their 787's to come by A340-300 which makes the start of their long-haul venture more costy and complicated.

I understood that Boeing was covering these costs, no?
 
invaders
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Wed Apr 03, 2013 6:36 am

Quoting cuban8 (Reply 9):
- SAS, which would be one of their main competitors have highly reduced their costs (becoming more competitive) and has also a frequent flyer program and Star Alliance offering connections making them attractive for the high yield passengers which I believe Norwegian could need.

You can discuss if SK is chewing off more then it can bite if their goal is to copy the cost-level to DY, just last month they delivered a loss off over 100 million euro in Q1 of their financial(dont know if this is the correct term) year.

On another note, I really hate connecting with DY since their check-in does not open before 2 hours prior to scheduled departure. That means that if you connect from for example MXP via CPH to BGO you have to go to their service-agent at CPH to print a new boarding-pass, the few times I have done that those people working there seems to have more interest in drinking coffee then helping passengers.
 
NDiesel
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RE: Is Norwegian Bitiing Off More Than It Can Chew?

Wed Apr 03, 2013 10:41 am

Their first 787 "Sonja Henie" is almost ready. Looking smart. Pictures in this link, couldn´t copy image address as I´m on the iPad.

http://www.vg.no/reise/artikkel.php?artid=10115164
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