Norwegian to fly between UK, Ireland and U.S. NE Coast cities. from Summer 2017.
Mar 17, 2018, 1:27 am
#211
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. Nobody voluntarily flies to Gatwick if they can fly to Heathrow. Unless they're clueless, of course. It would be like preferring Newburgh to Newark."
I do. Faster journey time to the City of Canary Wharf than from Heathrow. Last time I passed through Gatwick I had cleared immigration, collected bags and leaving the airport in under half an hour.
The rest of your post I can agree with but your view of Gatwick sounds outdated.
I do. Faster journey time to the City of Canary Wharf than from Heathrow. Last time I passed through Gatwick I had cleared immigration, collected bags and leaving the airport in under half an hour.
The rest of your post I can agree with but your view of Gatwick sounds outdated.
Mar 17, 2018, 3:22 am
#212
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Customs is faster. Transport is better (unless you want somewhere a short taxi ride from Paddington station). The "clueless" ones are those who think that Heathrow is the only sensible option because it's connected to the Piccadilly line.
Mar 17, 2018, 4:01 am
#213
Join Date: Jun 2015
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And, of course, since UA and AA operate hubs in ORD, they don't have to offer so many cheap fares for ORD-LHR customers -- they can sell those seats to folks starting in other USA cities. And they -- especially AA (oneworld) -- can connect people to other cities in Europe when they arrive at LHR. Norwegian has to fill all their seats with ORD-LGW pax; their unit revenue disadvantage, even in coach, is going to be astonishing.
They are not free, they are included in the ticket price. You can also book a Norwegian flight with a fare that has food, drinks, seat assignment, and checked luggage included. The question is: Is there still a clear price difference to the legacy carriers or not. Operation reliability is a different topic, I agree.
Mar 17, 2018, 4:20 am
#214
Join Date: Jun 2010
Posts: 246
I find it hilarious that this reporter thinks Norwegian is going to cause big problems for AA and UA on their new O'Hare to Gatwick flight. And Lazare is even an EXPERIENCED airline reporter.
https://finance.yahoo.com/m/7114c138...nd-united.html
Newsflash: this move is also doomed to fail for Norwegian. Sure, it will temporarily depress fares in the rear cabin for UA and AA and maybe cost them a few bucks, but Norwegian will lose buckets of money on this service until they pull out. This in an easy Airline Management 101 case study. That Norwegian can't grasp the foolishness of their move is another example of why they will soon go broke.
First, taking on an incumbent airline at their hub is a tall order. Taking on two incumbents at their hub (ORD's about the only place you can do this) is mind-boggling.
Second, Norwegian will offer an inferior product. Nobody voluntarily flies to Gatwick if they can fly to Heathrow. Unless they're clueless, of course. It would be like preferring Newburgh to Newark.
Of course, most of the profitability of the route is in the front cabin. But wait -- Norwegian doesn't even have a premium cabin!
And, of course, since UA and AA operate hubs in ORD, they don't have to offer so many cheap fares for ORD-LHR customers -- they can sell those seats to folks starting in other USA cities. And they -- especially AA (oneworld) -- can connect people to other cities in Europe when they arrive at LHR. Norwegian has to fill all their seats with ORD-LGW pax; their unit revenue disadvantage, even in coach, is going to be astonishing.
And did I mention that "everybody" has heard of AA and UA in their hub city and will prefer the free included amenities (like food, drink, free seat assignments, checked luggage and operational reliability) that they provide?
Now you could argue that if Norwegian somehow had dramatically lower unit costs, maybe they'd have some shot. Other than labor, though, somebody please tell me how Norwegian is going to fly their brand new 787 across the Atlantic so much cheaper than AA and UA will. It's certainly not going to be on "utilization."
But sure, when Norwegian starts selling it's tickets for $99 on the route, some fool in the media will tout their "success." Sigh.
https://finance.yahoo.com/m/7114c138...nd-united.html
Newsflash: this move is also doomed to fail for Norwegian. Sure, it will temporarily depress fares in the rear cabin for UA and AA and maybe cost them a few bucks, but Norwegian will lose buckets of money on this service until they pull out. This in an easy Airline Management 101 case study. That Norwegian can't grasp the foolishness of their move is another example of why they will soon go broke.
First, taking on an incumbent airline at their hub is a tall order. Taking on two incumbents at their hub (ORD's about the only place you can do this) is mind-boggling.
Second, Norwegian will offer an inferior product. Nobody voluntarily flies to Gatwick if they can fly to Heathrow. Unless they're clueless, of course. It would be like preferring Newburgh to Newark.
Of course, most of the profitability of the route is in the front cabin. But wait -- Norwegian doesn't even have a premium cabin!
And, of course, since UA and AA operate hubs in ORD, they don't have to offer so many cheap fares for ORD-LHR customers -- they can sell those seats to folks starting in other USA cities. And they -- especially AA (oneworld) -- can connect people to other cities in Europe when they arrive at LHR. Norwegian has to fill all their seats with ORD-LGW pax; their unit revenue disadvantage, even in coach, is going to be astonishing.
And did I mention that "everybody" has heard of AA and UA in their hub city and will prefer the free included amenities (like food, drink, free seat assignments, checked luggage and operational reliability) that they provide?
Now you could argue that if Norwegian somehow had dramatically lower unit costs, maybe they'd have some shot. Other than labor, though, somebody please tell me how Norwegian is going to fly their brand new 787 across the Atlantic so much cheaper than AA and UA will. It's certainly not going to be on "utilization."
But sure, when Norwegian starts selling it's tickets for $99 on the route, some fool in the media will tout their "success." Sigh.
Perhaps, Norweigien can get a few passengers who otherwise would not travel at all, but this is the problem with Norweigen’s business model. Flying 787s on O/D route where they are competing with established legacies who have a customer base. I’m sure Wow connects a few people to London, but they are also taking some people to KEF, and connecting to several other European cities.
Mar 17, 2018, 6:21 am
#215
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I welcome the competitive pressure that Norwegian puts on the TATL flying legacy majors that are part of the big 3 airline alliances.
The legacy majors flying transatlantic flights have made flying so uncomfortable in the main and been in such a rat race to the bottom that Norwegian is just joining them in a game that the legacy majors started and are still playing.
Blaming customers for the race to the bottom is off base entirely, for airline customers in the main are such a diffuse interest that they control fundamentally nothing in the TATL flying marketplace other than the decision to accept or reject the price presented by the airlines for a trip at a certain time between a certain origin and destination.
Since the airilnes are in a rat race to the bottom amongst themselves, Norwegian giving the other airlines a run for their money is well worth it to consumers -- whether or not Norwegian or other carriers make a business success of the flying or not.
The legacy majors flying transatlantic flights have made flying so uncomfortable in the main and been in such a rat race to the bottom that Norwegian is just joining them in a game that the legacy majors started and are still playing.
Blaming customers for the race to the bottom is off base entirely, for airline customers in the main are such a diffuse interest that they control fundamentally nothing in the TATL flying marketplace other than the decision to accept or reject the price presented by the airlines for a trip at a certain time between a certain origin and destination.
Since the airilnes are in a rat race to the bottom amongst themselves, Norwegian giving the other airlines a run for their money is well worth it to consumers -- whether or not Norwegian or other carriers make a business success of the flying or not.
Mar 17, 2018, 6:41 am
#216
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. Nobody voluntarily flies to Gatwick if they can fly to Heathrow. Unless they're clueless, of course. It would be like preferring Newburgh to Newark."
I do. Faster journey time to the City of Canary Wharf than from Heathrow. Last time I passed through Gatwick I had cleared immigration, collected bags and leaving the airport in under half an hour.
The rest of your post I can agree with but your view of Gatwick sounds outdated.
I do. Faster journey time to the City of Canary Wharf than from Heathrow. Last time I passed through Gatwick I had cleared immigration, collected bags and leaving the airport in under half an hour.
The rest of your post I can agree with but your view of Gatwick sounds outdated.
For this reason, my visits to Gatwick have been quite limited. That said, a couple years ago, I booked an Easyjet flight to the Continent from LGW for myself and my family (price being the determining factor). The train trip out there from central London was bad; pretty expensive, long and with massive delays (I think it was track work; from the reaction of my fellow train passengers, it wasn't a particularly unusual occurrence). The scene at Victoria Station was epically horrific. Maybe the train is now more reliable? GTW airport was also still pretty dumpy (ridiculously dumpy compared to my experience at LHR Terminal 2 last week).
So I'm thinking you're going to suffer at least a 10% revenue shortfall flying to LGW than LHR. On top of everything else.
Mar 17, 2018, 7:04 am
#217
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Maybe it's outdated. As soon as they could, all the USA airlines abandoned Gatwick because their yields were horrible. US airlines with Gatwick flights couldn't compete against US airlines with Heathrow flights (much less against the British carriers). I know I tried to avoid LGW arrivals.
For this reason, my visits to Gatwick have been quite limited. That said, a couple years ago, I booked an Easyjet flight to the Continent from LGW for myself and my family (price being the determining factor). The train trip out there from central London was bad; pretty expensive, long and with massive delays (I think it was track work; from the reaction of my fellow train passengers, it wasn't a particularly unusual occurrence). The scene at Victoria Station was epically horrific. Maybe the train is now more reliable? GTW airport was also still pretty dumpy (ridiculously dumpy compared to my experience at LHR Terminal 2 last week).
So I'm thinking you're going to suffer at least a 10% revenue shortfall flying to LGW than LHR. On top of everything else.
For this reason, my visits to Gatwick have been quite limited. That said, a couple years ago, I booked an Easyjet flight to the Continent from LGW for myself and my family (price being the determining factor). The train trip out there from central London was bad; pretty expensive, long and with massive delays (I think it was track work; from the reaction of my fellow train passengers, it wasn't a particularly unusual occurrence). The scene at Victoria Station was epically horrific. Maybe the train is now more reliable? GTW airport was also still pretty dumpy (ridiculously dumpy compared to my experience at LHR Terminal 2 last week).
So I'm thinking you're going to suffer at least a 10% revenue shortfall flying to LGW than LHR. On top of everything else.
Mar 17, 2018, 8:17 am
#218
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Perhaps, Norweigien can get a few passengers who otherwise would not travel at all, but this is the problem with Norweigen’s business model. Flying 787s on O/D route where they are competing with established legacies who have a customer base. I’m sure Wow connects a few people to London, but they are also taking some people to KEF, and connecting to several other European cities.
Look, I've bought $19 tickets on Frontier for weekend trips I would not have taken if I had to pay a "normal" fare. I think Frontier still lost boatloads of money on my ticket, but their business model suggested I might buy luggage space, seat assignments and food from them (I didn't).
The problem is you can't really do this type of promo transatlantic. The taxes alone are about 150 bucks. I know everybody's price point is different, but what would be an ORD-LGW fare that would motivate you to take an "extra" trip that you wouldn't otherwise take? I would suggest that fare would have to be under $400 for most folks. When you strip out taxes, a $400 fare on this route would result in about a 3 cent yield! Now maybe a few fools would buy some food and check a bag for their weekend trip (but Norwegian still gives you a free carry-on), but there's no freakin' way you're making money on those fares.
I would suggest that high taxes ALWAYS doom low fare service. The other day, I was flying from BWI to YYZ on AC. The aircraft was a tiny Embraer. Why? Because the high airline taxes to Canada (you can DRIVE across the border for free) greatly limit demand for these flights -- which is why the low fare airlines don't fly them.
Yesterday, I did look up Norwegian's ORD-LGW fare for mid-May, midweek departures. They were charging about $600 roundtrip. I don't think that fare would stimulate ANY demand. IF they could sell all their seats at that price (which I'm sure they can't), I would think they MIGHT break even.
Interesting, their competitors were charging about $175 more for the flight. If you had a bag to check, that's probably a "fair" additional price to charge for the additional (and better) service. It doesn't seem to me that the big boys are terribly worried about the Norwegian flight. If they were worried, they'd match the $600 fare and cause epic losses for Norwegian.
Mar 17, 2018, 8:51 am
#219
Join Date: Jun 2010
Posts: 246
Yup, the ability to stimulate traffic with low fares on transatlantic flights is undoubtedly limited.
Look, I've bought $19 tickets on Frontier for weekend trips I would not have taken if I had to pay a "normal" fare. I think Frontier still lost boatloads of money on my ticket, but their business model suggested I might buy luggage space, seat assignments and food from them (I didn't).
The problem is you can't really do this type of promo transatlantic. The taxes alone are about 150 bucks. I know everybody's price point is different, but what would be an ORD-LGW fare that would motivate you to take an "extra" trip that you wouldn't otherwise take? I would suggest that fare would have to be under $400 for most folks. When you strip out taxes, a $400 fare on this route would result in about a 3 cent yield! Now maybe a few fools would buy some food and check a bag for their weekend trip (but Norwegian still gives you a free carry-on), but there's no freakin' way you're making money on those fares.
I would suggest that high taxes ALWAYS doom low fare service. The other day, I was flying from BWI to YYZ on AC. The aircraft was a tiny Embraer. Why? Because the high airline taxes to Canada (you can DRIVE across the border for free) greatly limit demand for these flights -- which is why the low fare airlines don't fly them.
Yesterday, I did look up Norwegian's ORD-LGW fare for mid-May, midweek departures. They were charging about $600 roundtrip. I don't think that fare would stimulate ANY demand. IF they could sell all their seats at that price (which I'm sure they can't), I would think they MIGHT break even.
Interesting, their competitors were charging about $175 more for the flight. If you had a bag to check, that's probably a "fair" additional price to charge for the additional (and better) service. It doesn't seem to me that the big boys are terribly worried about the Norwegian flight. If they were worried, they'd match the $600 fare and cause epic losses for Norwegian.
Look, I've bought $19 tickets on Frontier for weekend trips I would not have taken if I had to pay a "normal" fare. I think Frontier still lost boatloads of money on my ticket, but their business model suggested I might buy luggage space, seat assignments and food from them (I didn't).
The problem is you can't really do this type of promo transatlantic. The taxes alone are about 150 bucks. I know everybody's price point is different, but what would be an ORD-LGW fare that would motivate you to take an "extra" trip that you wouldn't otherwise take? I would suggest that fare would have to be under $400 for most folks. When you strip out taxes, a $400 fare on this route would result in about a 3 cent yield! Now maybe a few fools would buy some food and check a bag for their weekend trip (but Norwegian still gives you a free carry-on), but there's no freakin' way you're making money on those fares.
I would suggest that high taxes ALWAYS doom low fare service. The other day, I was flying from BWI to YYZ on AC. The aircraft was a tiny Embraer. Why? Because the high airline taxes to Canada (you can DRIVE across the border for free) greatly limit demand for these flights -- which is why the low fare airlines don't fly them.
Yesterday, I did look up Norwegian's ORD-LGW fare for mid-May, midweek departures. They were charging about $600 roundtrip. I don't think that fare would stimulate ANY demand. IF they could sell all their seats at that price (which I'm sure they can't), I would think they MIGHT break even.
Interesting, their competitors were charging about $175 more for the flight. If you had a bag to check, that's probably a "fair" additional price to charge for the additional (and better) service. It doesn't seem to me that the big boys are terribly worried about the Norwegian flight. If they were worried, they'd match the $600 fare and cause epic losses for Norwegian.
Like I said, I think there is a place for the low cost business model over oceans. But, Wow seems to have a better plan, with a hub that allows for short flights going to the U.S. and Europe, that connect multiple dots, rather than a dart board approach relying on O/D on competative routes.
Mar 17, 2018, 8:55 am
#220
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Yup, the ability to stimulate traffic with low fares on transatlantic flights is undoubtedly limited.
Look, I've bought $19 tickets on Frontier for weekend trips I would not have taken if I had to pay a "normal" fare. I think Frontier still lost boatloads of money on my ticket, but their business model suggested I might buy luggage space, seat assignments and food from them (I didn't).
The problem is you can't really do this type of promo transatlantic. The taxes alone are about 150 bucks. I know everybody's price point is different, but what would be an ORD-LGW fare that would motivate you to take an "extra" trip that you wouldn't otherwise take? I would suggest that fare would have to be under $400 for most folks. When you strip out taxes, a $400 fare on this route would result in about a 3 cent yield! Now maybe a few fools would buy some food and check a bag for their weekend trip (but Norwegian still gives you a free carry-on), but there's no freakin' way you're making money on those fares.
I would suggest that high taxes ALWAYS doom low fare service. The other day, I was flying from BWI to YYZ on AC. The aircraft was a tiny Embraer. Why? Because the high airline taxes to Canada (you can DRIVE across the border for free) greatly limit demand for these flights -- which is why the low fare airlines don't fly them.
Yesterday, I did look up Norwegian's ORD-LGW fare for mid-May, midweek departures. They were charging about $600 roundtrip. I don't think that fare would stimulate ANY demand. IF they could sell all their seats at that price (which I'm sure they can't), I would think they MIGHT break even.
Interesting, their competitors were charging about $175 more for the flight. If you had a bag to check, that's probably a "fair" additional price to charge for the additional (and better) service. It doesn't seem to me that the big boys are terribly worried about the Norwegian flight. If they were worried, they'd match the $600 fare and cause epic losses for Norwegian.
Look, I've bought $19 tickets on Frontier for weekend trips I would not have taken if I had to pay a "normal" fare. I think Frontier still lost boatloads of money on my ticket, but their business model suggested I might buy luggage space, seat assignments and food from them (I didn't).
The problem is you can't really do this type of promo transatlantic. The taxes alone are about 150 bucks. I know everybody's price point is different, but what would be an ORD-LGW fare that would motivate you to take an "extra" trip that you wouldn't otherwise take? I would suggest that fare would have to be under $400 for most folks. When you strip out taxes, a $400 fare on this route would result in about a 3 cent yield! Now maybe a few fools would buy some food and check a bag for their weekend trip (but Norwegian still gives you a free carry-on), but there's no freakin' way you're making money on those fares.
I would suggest that high taxes ALWAYS doom low fare service. The other day, I was flying from BWI to YYZ on AC. The aircraft was a tiny Embraer. Why? Because the high airline taxes to Canada (you can DRIVE across the border for free) greatly limit demand for these flights -- which is why the low fare airlines don't fly them.
Yesterday, I did look up Norwegian's ORD-LGW fare for mid-May, midweek departures. They were charging about $600 roundtrip. I don't think that fare would stimulate ANY demand. IF they could sell all their seats at that price (which I'm sure they can't), I would think they MIGHT break even.
Interesting, their competitors were charging about $175 more for the flight. If you had a bag to check, that's probably a "fair" additional price to charge for the additional (and better) service. It doesn't seem to me that the big boys are terribly worried about the Norwegian flight. If they were worried, they'd match the $600 fare and cause epic losses for Norwegian.
Taxes -- governments might call them user fees but they are still taxes -- being levied on passengers aren't the killer for demand. The gun and bullet killing demand for BWI-YYZ flights aren't the taxes; it's the airport and airline use experiences and the opportunity cost of flying rather than driving.
The legacy majors not fully engaging in a price war against Norwegian is due in large part to the legacy majors still milking their governmentally-granted waivers and favors (route networks included) and the brand image of the legacy majors providing more than Norwegian even as increasingly the gap is narrowing in terms of service/product quality in the main.
I welcome Norwegian's TATL flying expansion. Whether or not it costs Norwegian or US airiline investors' money, not my problem. I welcome a vibrant market with more competition that shakes up the marketplace for the legacy majors in their rat race to the bottom in terms of customer service in the main.
Last edited by GUWonder; Mar 17, 2018 at 9:01 am
Mar 17, 2018, 10:15 am
#221
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Join Date: Mar 2000
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Also, BA has a London hub as well, and operates the flight. AA and UA can also fill up the plane with connecting passengers from other Midwest and Western cities, and AA can offer passengers onward connections with their BA partnership.
Perhaps, Norweigien can get a few passengers who otherwise would not travel at all, but this is the problem with Norweigen’s business model. Flying 787s on O/D route where they are competing with established legacies who have a customer base. I’m sure Wow connects a few people to London, but they are also taking some people to KEF, and connecting to several other European cities.
Demand to fly BWI to YYZ is limited. It's not because of taxes that the demand is what it is.
. . . .
I welcome Norwegian's TATL flying expansion. Whether or not it costs Norwegian or US airiline investors' money, not my problem. I welcome a vibrant market with more competition that shakes up the marketplace for the legacy majors in their rat race to the bottom in terms of customer service in the main.
. . . .
I welcome Norwegian's TATL flying expansion. Whether or not it costs Norwegian or US airiline investors' money, not my problem. I welcome a vibrant market with more competition that shakes up the marketplace for the legacy majors in their rat race to the bottom in terms of customer service in the main.
As far as int'l competition goes, I tend to agree with you. That said, I think that there is already a lot of int'l competition due to all the foreign carriers. Indeed, there is some of it that's simply nuts because foreign governments provide billions in subsidies to their airlines for reasons other than creating financially viable airline service (aka, the Middle East). Clearly, if the economics actually worked, we'd already have plenty of low fare transatlantic flying. You don't think Easyjet and Ryanair (not to mention Spirit) wouldn't have jumped on this if they thought it was a potentially profitable business?
It also seems obvious that coach pax across the Atlantic are already being subsidized -- by all the fancy pants travellers who are willing to pay big bucks for their lie flat business seats. There's a real arms race in the industry to cater to these big spenders (a week doesn't go by without another "unnecessary" dining facility or lounge being build to cater to these high rollers). The airlines are clearly focusing on where the money is. Without that market existing, I am certain that there would be fewer flights across the Atlantic and coach pax would have to pay more for their seats. Which, of course, largely explains why Norwegian's business model is doomed.
Mar 17, 2018, 10:26 am
#222
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The high-rollers in the front of the flying bus TATL don't get the frequency of service they desire without the subsidies they get from the back of the flying bus passengers. This becomes more obvious every time the American financial sector takes a big hit. 
Without a good passenger mix filling up the planes, the flights often don't work out. Concorde service and all-business-class service doesn't work out all that well all that often for the airlines that tried it.
That said, nothing ventured, nothing gained. So go all out Norwegian.
Without a good passenger mix filling up the planes, the flights often don't work out. Concorde service and all-business-class service doesn't work out all that well all that often for the airlines that tried it.
That said, nothing ventured, nothing gained. So go all out Norwegian.
Mar 17, 2018, 12:24 pm
#223
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Join Date: Jun 2006
Posts: 5,900
Not true Im over and back all the time and have a choice of LGW/LHR being equal distance from my destination. LGW has come a long way and I am getting to the stage where I actually prefer LGW.
Mar 17, 2018, 9:39 pm
#224
Join Date: Jun 2010
Posts: 246
Airlines like Easyjet or Ryanair that don’t normally sell connections, can help fill seats as well by offering connections to and from their Transatlantic flights, similar to AirAsia selling connections to and from their AirAsia X long haul service.
What would be intersting would be if there would every be a JV between two LCCs.
Mar 23, 2018, 9:00 pm
#225
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More evidence that, over time, Norwegian could go broke.
https://www.wsj.com/articles/norwegi...res-1521654170
That said, logic would suggest this cash infusion will get them through the summer season.
https://www.wsj.com/articles/norwegi...res-1521654170
That said, logic would suggest this cash infusion will get them through the summer season.