Norwegian to fly between UK, Ireland and U.S. NE Coast cities. from Summer 2017.
May 5, 2018, 12:24 am
#346
Join Date: Nov 2005
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I didn't do the math - it was an off-the-cuff remark. Here's a link that gives fuel prices: IATA - Jet Fuel Price Monitor
You realize that the price Norwegian lists includes all taxes, right? For a Novemeber Norwegian ticket at $214.90, $158.50 is taxes according to Norwegian's booking engine. So it's really $56.40 x 300 for Norwegian so they would get $16,900 on a $214.90 one way ticket LGW-JFK.
You realize that the price Norwegian lists includes all taxes, right? For a Novemeber Norwegian ticket at $214.90, $158.50 is taxes according to Norwegian's booking engine. So it's really $56.40 x 300 for Norwegian so they would get $16,900 on a $214.90 one way ticket LGW-JFK.
May 5, 2018, 2:02 am
#348
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May 5, 2018, 8:00 pm
#349
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For a LGW-JFK flight at least $100 (£78) is the UK Air Passenger Duty (APD). And there’s an airport facility charge for departing Gatwick. So the majority of those “taxes” are government imposed and don’t go into Norwegian’s coffers. That’s for ex-LGW as per the $214.90 fare mentioned.
Norwegian just has a bad business plan. I've been investing in this sector for decades and I know a bad business plan when I see one. MOST airline start-ups fail. It's a very hard business. I'm still amazed that this strategy ever got green-lighted. It was doomed to fail. That said, ironically, it looks like Norwegian's owners may get paid by competitors to fail. I've seen this before. Virgin America -- whose business plan was poor, but light years better than Norwegian -- never really made money, but got bought (for its assets) at a huge premium by Alaska. So maybe the folks at Norwegian are smarter than I think they are. Maybe they didn't care if they ever made money (I've seen tech companies created simply to sell out). Still, their plan is so terrible that I'm still skeptical that they can sell out and make money on that transaction. We'll see. Regardless, the airline (in its current form) will cease operations at some point, probably sooner than later.
May 5, 2018, 8:08 pm
#350
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Join Date: Mar 2000
Posts: 17,424
The Financial Times has this interesting quip yesterday from an analyst about the likelihood of IAG ever acquiring Norwegian:
"Analysts at Bernstein said the chances of a financially sensible deal were low: “The defiant rejection by Norwegian suggests the intersection between what a rational IAG will pay for a heavily lossmaking airline, and what the Norwegian board considers acceptable, is very small (or likely non-existent).”"
"Analysts at Bernstein said the chances of a financially sensible deal were low: “The defiant rejection by Norwegian suggests the intersection between what a rational IAG will pay for a heavily lossmaking airline, and what the Norwegian board considers acceptable, is very small (or likely non-existent).”"
May 5, 2018, 11:33 pm
#351
Join Date: Jan 2017
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The Financial Times has this interesting quip yesterday from an analyst about the likelihood of IAG ever acquiring Norwegian:
"Analysts at Bernstein said the chances of a financially sensible deal were low: “The defiant rejection by Norwegian suggests the intersection between what a rational IAG will pay for a heavily lossmaking airline, and what the Norwegian board considers acceptable, is very small (or likely non-existent).”"
"Analysts at Bernstein said the chances of a financially sensible deal were low: “The defiant rejection by Norwegian suggests the intersection between what a rational IAG will pay for a heavily lossmaking airline, and what the Norwegian board considers acceptable, is very small (or likely non-existent).”"
May 6, 2018, 1:26 am
#352
Join Date: Jun 2010
Posts: 246
Right, this is one of the major problems with transatlantic "low fare" airlines. The taxes are so high that you can never really be "low fare" (well, you can be low fare if you're willing to accept low single digit unit RASM, but you're unlikely to stay in business for long with those yields!). You also have to buy the same airplanes (probably at higher prices) and pay the same fuel prices. And because of the logistics of int'l routes, you usually can't fly your planes more (indeed, it's easier for a major hub airline to get more utilization out of their aircraft, because they can use them on multiple routes in multiple directions). Meanwhile, you lose ALL the revenue of business travelers, especially in the premium cabins where the majority of money is made on these
Norwegian just has a bad business plan. I've been investing in this sector for decades and I know a bad business plan when I see one. MOST airline start-ups fail. It's a very hard business. I'm still amazed that this strategy ever got green-lighted. It was doomed to fail. That said, ironically, it looks like Norwegian's owners may get paid by competitors to fail. I've seen this before. Virgin America -- whose business plan was poor, but light years better than Norwegian -- never really made money, but got bought (for its assets) at a huge premium by Alaska. So maybe the folks at Norwegian are smarter than I think they are. Maybe they didn't care if they ever made money (I've seen tech companies created simply to sell out). Still, their plan is so terrible that I'm still skeptical that they can sell out and make money on that transaction. We'll see. Regardless, the airline (in its current form) will cease operations at some point, probably sooner than later.
Norwegian just has a bad business plan. I've been investing in this sector for decades and I know a bad business plan when I see one. MOST airline start-ups fail. It's a very hard business. I'm still amazed that this strategy ever got green-lighted. It was doomed to fail. That said, ironically, it looks like Norwegian's owners may get paid by competitors to fail. I've seen this before. Virgin America -- whose business plan was poor, but light years better than Norwegian -- never really made money, but got bought (for its assets) at a huge premium by Alaska. So maybe the folks at Norwegian are smarter than I think they are. Maybe they didn't care if they ever made money (I've seen tech companies created simply to sell out). Still, their plan is so terrible that I'm still skeptical that they can sell out and make money on that transaction. We'll see. Regardless, the airline (in its current form) will cease operations at some point, probably sooner than later.
I’m repeating myself, I think TransAtlantic LCC is possible, but it works better with Wow who can use the geographic advantage of their Icelandic hub, to offer relatively short flights on mostly narrowbody aircrafts. They don’t have to rely on O/D, they can connect passengers in Chicago, Cleveland, and Cincinnati to places like London, Paris, and Dublin. Even AirAsia offers connections on their long haul product.
May 6, 2018, 2:42 am
#353
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AirAsia X is able to make it work in Asia, with flights of 5-8 hours, connecting places like Japan, Beijing, and Aulstralia to Bangkok and Kuala Lumpur.
I’m repeating myself, I think TransAtlantic LCC is possible, but it works better with Wow who can use the geographic advantage of their Icelandic hub, to offer relatively short flights on mostly narrowbody aircrafts. They don’t have to rely on O/D, they can connect passengers in Chicago, Cleveland, and Cincinnati to places like London, Paris, and Dublin. Even AirAsia offers connections on their long haul product.
May 6, 2018, 3:24 am
#354
Suspended
Join Date: Feb 2018
Posts: 192
Won
Right, this is one of the major problems with transatlantic "low fare" airlines. The taxes are so high that you can never really be "low fare" (well, you can be low fare if you're willing to accept low single digit unit RASM, but you're unlikely to stay in business for long with those yields!). You also have to buy the same airplanes (probably at higher prices) and pay the same fuel prices. And because of the logistics of int'l routes, you usually can't fly your planes more (indeed, it's easier for a major hub airline to get more utilization out of their aircraft, because they can use them on multiple routes in multiple directions). Meanwhile, you lose ALL the revenue of business travelers, especially in the premium cabins where the majority of money is made on these routes.
Norwegian just has a bad business plan. I've been investing in this sector for decades and I know a bad business plan when I see one. MOST airline start-ups fail. It's a very hard business. I'm still amazed that this strategy ever got green-lighted. It was doomed to fail. That said, ironically, it looks like Norwegian's owners may get paid by competitors to fail. I've seen this before. Virgin America -- whose business plan was poor, but light years better than Norwegian -- never really made money, but got bought (for its assets) at a huge premium by Alaska. So maybe the folks at Norwegian are smarter than I think they are. Maybe they didn't care if they ever made money (I've seen tech companies created simply to sell out). Still, their plan is so terrible that I'm still skeptical that they can sell out and make money on that transaction. We'll see. Regardless, the airline (in its current form) will cease operations at some point, probably sooner than later.
Norwegian just has a bad business plan. I've been investing in this sector for decades and I know a bad business plan when I see one. MOST airline start-ups fail. It's a very hard business. I'm still amazed that this strategy ever got green-lighted. It was doomed to fail. That said, ironically, it looks like Norwegian's owners may get paid by competitors to fail. I've seen this before. Virgin America -- whose business plan was poor, but light years better than Norwegian -- never really made money, but got bought (for its assets) at a huge premium by Alaska. So maybe the folks at Norwegian are smarter than I think they are. Maybe they didn't care if they ever made money (I've seen tech companies created simply to sell out). Still, their plan is so terrible that I'm still skeptical that they can sell out and make money on that transaction. We'll see. Regardless, the airline (in its current form) will cease operations at some point, probably sooner than later.
May 6, 2018, 5:49 am
#355
Join Date: Feb 2017
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Price out fares from any London airport to the US on any carrier. For those carriers that break out the taxes by taxing authority, you're going to see some of very high numbers for UK departure taxes. On top of that, you've got US immigration and customs taxes.
So no, I didn't need to run numbers to know that it was a money losing price. I don't know why so many here seem to think that this is a realistic - or even sane - ticket price.
May 6, 2018, 6:00 am
#356
Join Date: Feb 2017
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I found a GDL-LAX flight on Alaska. Here are the numbers (the US fees look the same/similar as for any international arrival, no matter the departure city):
Total per passenger
$188.86
Fare
$114.00
Base fare
$114.00
Taxes and fees
$74.86
Mexico airport dept. tax
$35.35
Mexico Transportation Tax IVA International
$4.60
US APHIS user fee
$3.96
US Customs user fee
$5.65
US Immigration user fee
$7.00
US int'l arrival tax
$18.30
May 6, 2018, 5:33 pm
#358
Suspended
Join Date: Feb 2018
Posts: 192
I've flown between the UK and US many times and have priced out tickets quite a bit. My first thought when I looked at the price was that I've paid higher UK departure taxes on some of my flights so I knew that the fare was not going to cover much more than taxes.
Price out fares from any London airport to the US on any carrier. For those carriers that break out the taxes by taxing authority, you're going to see some of very high numbers for UK departure taxes. On top of that, you've got US immigration and customs taxes.
So no, I didn't need to run numbers to know that it was a money losing price. I don't know why so many here seem to think that this is a realistic - or even sane - ticket price.
Price out fares from any London airport to the US on any carrier. For those carriers that break out the taxes by taxing authority, you're going to see some of very high numbers for UK departure taxes. On top of that, you've got US immigration and customs taxes.
So no, I didn't need to run numbers to know that it was a money losing price. I don't know why so many here seem to think that this is a realistic - or even sane - ticket price.
1. Many airlines put out a few loss leader seats & get free publicity which is probably cheaper than advertising costs.
2. Some govts/airports give exemptions on some charges or absorb them for new airlines/routes to help them get off ground especially if the airline advertises a fare for a certain minimum number of seats at below cost of normal taxes. Sometimes called subsidies.
if A certain jurisdiction like very dodgy eu doesn't allow subsidies then an airport can support in other ways. Say an airport says to an airline fly here & we will wsive first $100k of landing fees. The airport could buy $100k of airline tickets & call it staff travel.
Last edited by southpac; May 6, 2018 at 5:53 pm
May 6, 2018, 9:20 pm
#359
Join Date: Jun 2010
Posts: 246
I've flown between the UK and US many times and have priced out tickets quite a bit. My first thought when I looked at the price was that I've paid higher UK departure taxes on some of my flights so I knew that the fare was not going to cover much more than taxes.
Price out fares from any London airport to the US on any carrier. For those carriers that break out the taxes by taxing authority, you're going to see some of very high numbers for UK departure taxes. On top of that, you've got US immigration and customs taxes.
So no, I didn't need to run numbers to know that it was a money losing price. I don't know why so many here seem to think that this is a realistic - or even sane - ticket price.
Price out fares from any London airport to the US on any carrier. For those carriers that break out the taxes by taxing authority, you're going to see some of very high numbers for UK departure taxes. On top of that, you've got US immigration and customs taxes.
So no, I didn't need to run numbers to know that it was a money losing price. I don't know why so many here seem to think that this is a realistic - or even sane - ticket price.
For most people traveling over an Ocean with less than 10KG of luggage is a nog go. Also they get plenty of stupid people who don’t do research, see this random airline they never heard of selling flights hundreds of dollars cheaper than the next competitor (that they probalby hear of), who turn up at the airport and are shocked to find out they are going to have pay a hefty fee to check their 20 KG suitcase, and when they get on the plane are shocked to pay for water and food. Read Norweigen and Wow’s Tripadivsor pages, plenty of people don’t know the basic rules that these airlines make super clear on their websites, and end up paying handsomely for it at the airport.
Also, I am unsure of EU regulations, but in the U.S. fees, as opposed to airfare, are untaxed.
And like one of the above posters said, free publicity. When news broke that Wow was entering CVG, the Cincinnati Enquirer ran stories with headlines like “$99 to Iceland Budget AIrline Coming to CVG”. Also, not to mention that people will post on social media about it. A friend of mine flew to Iceland on Wow after I told her about my ticket.
May 6, 2018, 11:33 pm
#360
Join Date: Nov 2005
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