babastud
Posts: 262
Joined: Wed Aug 03, 2016 1:38 am

Re: Norwegian Air to Consolidate All Routes in the Bay Area to SFO

Fri Dec 20, 2019 12:30 am

strfyr51 wrote:
Chasensfo wrote:
Sure, why not pay more for operational heada'd bet NOBODY ches, longer TSA lines, and more expensive usage fees? I understand why legacy and alliance carriers don't like OAK, but I can't think of a much better set up for an ULCC that has been entrenched at OAK for over 5 years to leave as soon as all the competition(BA and Level) leave town. In the summer, SFO runs on a fantasy gate schedule(no buffer between flights at all at peak times), there is rarely a day where someone doesn't hold over an hour just due to early/late arrivals, if not 10+ international flights. Take a look out by the end of the 10s just about any summer morning, afternoon, or early evening and you'll usually spot plenty of heavies with no gates just hanging out. Why would Norweigan, with their short turn times, want to be subjected to that?

I think it might have been support for their 787's Parts and Technical support which well exceeds any other reason. Anybody could render passenger support. But the 787 isn't a just an Anybody airplane and who else at Oakland could technically support it?? There's a damn sight more to flying a plane than just flying it! Just to support if could go from $80/ manhour at sfo to $160/Manhour at Oakland at MAGSA Rates. you're talking about a BIG chunk of Change. Their guys at OAK could just as easily work at SFO. since you can see one from the other.



Exactly! an SFO is set up with plenty of 787 supplies on hand. DY had up to 5 flights in day in the summer arriving into Oak. That's a sizable operation. Good that they can have more support in SFO.
 
strfyr51
Posts: 4292
Joined: Tue Apr 10, 2012 5:04 pm

Re: Norwegian Air to Consolidate All Routes in the Bay Area to SFO

Fri Dec 20, 2019 12:38 am

ucdtim17 wrote:
SFOA380 wrote:
ucdtim17 wrote:

It would be interesting to hear them speak honestly about 1. What has changed this decade to drive all Bay Area growth to SFO (and a lesser extent SJC) and 2. What they are going to do to change this dynamic going forward, but it's not really in their job description to have honest, frank discussions about bad news. From what we can see, Norwegian's experiment at OAK was on balance a success; if they thought they could have made more money at SJC, SMF, PDX, DEN, etc at any point they would have grown there instead of OAK. It can be possible that OAK was a success for DY and that they feel they can be even more successful at SFO.

I hope they fail though


San Jose has grown dramatically. From their low of around 8.2MM passengers in 2012 to over 15MM today. OAK hasn't seen the same growth as the other two but has also grown around 4MM over the past several years.


Yes SJC has grown more, from 8.2 to 14.3 compared to OAK from 9.2 to 13.6, Meanwhile, SFO has basically added a full OAK/SJC in just the past 5 years. SFO has added almost 30 million passengers since its recent low in 2003, while OAK has treaded water and SJC has grown ~4 mil. I don't know why everyone wants to fly to SFO now, when they didn't in 2005, 2000, 1995, etc. San Francisco has always been the business and tourist hub of the region, but OAK/SJC have traditionally had a much larger share of the market's air traffic than they currently do.

I doubt is has much to do with passengers, it for sure might be other things. Why would anybody leave a long haul market with little direct competition for murderous competition if there's nothing in it for you??
 
planesarecool
Posts: 3256
Joined: Sun Nov 11, 2001 12:37 am

Re: Norwegian Air to Consolidate All Routes in the Bay Area to SFO

Fri Dec 20, 2019 7:39 am

strfyr51 wrote:
I doubt is has much to do with passengers, it for sure might be other things. Why would anybody leave a long haul market with little direct competition for murderous competition if there's nothing in it for you??


Probably because DY/DI have seen a notable increase in load factors and yields since moving their LGW service to SFO. You can argue the toss about which airport is more/less convenient, but ultimately people want to visit San Francisco, not Oakland. So they search for flights to San Francisco, not Oakland. It's no different to airlines generally seeing a notable increase in LF/yields at Heathrow over Gatwick, despite the fact that Gatwick is generally as convenient, if not more so, for large parts of London.

To add some context, average LF on the LGW-SFO route this month to date, typically a quiet period, is around 88% (90% in their premium cabin), and the route goes daily for Summer 2020.
 
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jfklganyc
Posts: 5603
Joined: Mon Jan 05, 2004 2:31 pm

Re: Norwegian Air to Consolidate All Routes in the Bay Area to SFO

Fri Dec 20, 2019 11:57 am

Historically, the primary airport always has the most demand and the higher fares

However, a single LCC (or multiple LCCs) have used secondary airports in the past to stimulate demand and create a new gateway to the region. The secret sauce is lower operating costs, fewer delays and a quieter “easier” airport environment. This, in turn, allows lower fares, which stimulates demand, which, in the longer term, raises fares and revenue.

Unfortunately for Norwegian, they didnt have the funds to let this strategy play out.

In desperation, they are consolidating ops to places like JFK MIA and SFO. But understand, those airports come with a slew of competition, high costs, and delays.

Norwegian had no choice. Their old plan clearly wasnt working. We will know in a year or two if this plan works
 
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enilria
Posts: 9850
Joined: Fri Feb 22, 2008 7:15 pm

Re: Norwegian Air to Consolidate All Routes in the Bay Area to SFO

Fri Dec 20, 2019 3:17 pm

LHUSA wrote:
enilria wrote:
LHUSA wrote:

Per OAG's latest loading for January 2020, the immunized JV carriers offer from the US:

63.9% of the total Transatlantic Seats
58.9% of the total Transatlantic ASMs
64.3% of the total Transatlantic Departures


Seats ASMs Departures
OW JV 754,091 3,132,493 2,819
Sky JV 834,547 3,604,879 2,949
Star JV 816,757 3,805,302 3,043
Rest 1,361,295 7,370,653 4,897
Grand Total 3,766,690 17,913,327 13,708


Combining US and Canada
64.7% of the total Transatlantic Seats
59.9% of the total Transatlantic ASMs
64.8% of the total Transatlantic Departures

I do not get those numbers for January 2020 from OAG. On USA-Europe one-way I get 13.1B ASMs and you have 17.9. Even if I included Canada I only get 14.8B to your 17.9B. So, already not sure what is different.

13.1B ASMs
OneWorld 3.1B 23.6%
Star 4.7B 35.8%
SkyTeam 2.9B 22.4%
That's 81.8%
+ VS 0.744B, now 87.5%
+ Eurowings (owned by Lufthansa) 0.09B, now 88.2%
+ AerLingus (owned by IAG/BA/IB) 0.37B, now 91.0%

I could also throw in Open Skies which is owned by IAG and takes us to 91.3%.

The only significant carriers not part of three ownership/alliance groups are:
Norwegian 4.7%
Icelandair 1.0%
Condor barely operates in January (which you picked)
Emirates with only 2 RTs at 0.9%.

So, the Atlantic is COMPLETELY OWNED. There is no competition beyond the 3 groups that control over 91% of capacity.


Transatlantic is not isolated to Europe. The JV agreements allow pricing/network coordination to all of EMEAI, so including Middle East, Africa and India. Here are the top carriers by that definition which are not part of a JV. For instance, United's EWR to India flights are fully included in the JV.

EK 1,431,409
QR 891,774
TK 600,611
AI 375,904
EY 327,109
DY 317,867
SK 312,537
LY 284,294
DI 283,414
TP 218,825
SV 212,706
SU 174,668
FI 163,798
AZ 160,701
ET 159,748

OK, sure, but transatlantic typically means USA-Europe, not USA-Middle East and the topic was about Europe as we are talking about Norwegian in the OP. But, OK that's fine. The Middle East is clearly very competitive, which is ironically what the European carriers are unhappy about.
steex wrote:
enilria wrote:
I do not get those numbers for January 2020 from OAG. On USA-Europe one-way I get 13.1B ASMs and you have 17.9. Even if I included Canada I only get 14.8B to your 17.9B. So, already not sure what is different.

13.1B ASMs
OneWorld 3.1B 23.6%
Star 4.7B 35.8%
SkyTeam 2.9B 22.4%
That's 81.8%
+ VS 0.744B, now 87.5%
+ Eurowings (owned by Lufthansa) 0.09B, now 88.2%
+ AerLingus (owned by IAG/BA/IB) 0.37B, now 91.0%

I could also throw in Open Skies which is owned by IAG and takes us to 91.3%.

The only significant carriers not part of three ownership/alliance groups are:
Norwegian 4.7%
Icelandair 1.0%
Condor barely operates in January (which you picked)
Emirates with only 2 RTs at 0.9%.

So, the Atlantic is COMPLETELY OWNED. There is no competition beyond the 3 groups that control over 91% of capacity.


Interesting - so does that mean SAS and LOT both qualify as negligible carriers TATL? If nothing else, I would've expected them to each exceed the capacity Emirates supplies even with limited route networks.

The overall point isn't changed regardless, just curious.

SAS and LOT are in alliances. They may not be in JVs, but neither is Aer Lingus. The point is that the alliances, JVs, ATI's etc. exist to allow coordination and reduction of competition. It's implicit with alliance partners and explicit with ATI partners. A great example is KE adding ATL with an A380 back in the day and causing DL to retaliate by scaling back the alliance. KE and DL were not ATI at the time and could not coordinate on capacity, but DL used the alliance to discourage KE from adding capacity to its hubs and it is VERY common for alliance partners not in the JV to avoid adding flights to partner hubs unless welcomed in. So, one way or the other the same goal is achieved to an extent regardless. To quote Don Quixote, "whether the stone hits the pitcher or the pitcher hits the stone, it's going to be bad for the pitcher".

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