Darby

Norwegian has nothing other than a wing, a prayer and $100 TATL fares. Why should anybody care about Norwegian's business model when they are flying TATL in a brand new 787 for $100? That sure beats a trip across the pond in the back of an old United garbage truck for much more money in my book.

I find your endless venom directed at Norwegian hilarious. Why do you feel so threatened by them?

LangenOrme

Norwegian stock is up 28% so far in 2018. In passenger terms they grew with 13.7% to 33.2 million in 17, making them the 8th biggest airline in Europe (SAS - 28m, Finnair - 12m). Some of you guys make it sound like this is an upstart doing a crazy gamble knowing nothing about running an airline, when in fact the transatlantic operation is an addition to their backbone operation. Since 2005, they've been profitable in 10 out of 12 years. In 2016 they made a profit of 1.5 bn nok. 2017 was a bad year for many different reasons, the CEO calling it a sh*t year. They'll be around break even, while 2018 is set to be a decent money making year. 17 and 18 are the big expansion years, from 19 and onwards the expansion will happen at a less breakneck speed. If things go reasonably well, Norwegian will be a 40m airline making a decent profit mid 19, solidifying their operations and maturing their markets in the years coming. Of course things can go wrong, it is risky, this business is risky, in which case they will have big assets and they will be an attractive candidate for a takeover.

iahphx

It's not venom. Just reality.

Shares of Norwegian went up last week because they issued a traffic report that was viewed as optimistic -- optimistic in the sense that it did not indicate any further deterioration in their business.

But they are still only achieving unit revenue of about 5 cents a mile. That's crazy low. There's no way that's sustainable.

irishguy28

Summer 2018 from T.F: Green Airport:
Dublin - 5 times weekly
Shannon - 4
Cork - 3
Edinburgh - 3
Belfast - 2

Adirondacker

http://www.courant.com/community/new-britain/hc-br-norwegian-air-bradley-20180115-story.html

Norwegian to drop Bradley to Edinburgh

irishguy28

Oops....

hughc99

Just flew PVD-ORK round-trip. Plane was half empty on the way there and more than half empty on the way back. Glad I got a chance to do it because it seems impossible to think this one is going to stick around.

iahphx

Well, obviously, that was an insane route to begin with.

The language in the article made me dig further (as there doesn't seem to be any national media coverage of these developments). It appears that they're going to go from 7 to 4 weekly flights on the Newburgh-Edinburgh route, but increasing Newburgh-Dublin from 2 to 3 weekly flights.

Norwegian Air Making Some Changes at Stewart Airport

Norwegian says the problem isn't demand, but taxes. They were hoping that Scotland would lower its departure taxes (the UK departure taxes are crazy high) and that didn't happen. This is largely disingenuous, of course. I guess the hope is that if Scotland reduced taxes by $50, Norwegian could pocket that and make the route profitable. I say good luck with that! The market is not static (like they have competitors), and they're probably going to have to pay more for fuel this summer than last.

Norwegian'd big problem is that they have a transatlantic business model that doesn't work. That said, if you wanted to lose less money, logic would suggest that 2x Dublin and 7x Edinburgh was not the best way to do that.

BTW, I love how the local reporter said the Newburgh service is "a big success" in a story discussing a cutback in service. He's obviously not talking about financial success.

Adirondacker

https://patch.com/new-york/midhudsonvalley/express-bus-service-stewart-airport-celebrates-50k-riders

irishguy28

It is not being disingenuous.

If you look at the locations from which B737 Max service was launched - Dublin, Shannon, Cork, Belfast, and Edinburgh - it should strike you that no English or Welsh cities were served. The Republic of Ireland has no equivalent of UK APD. In Northern Ireland, APD was abolished 5 years ago for direct flights of greater than 2,000 miles. Edinburgh is therefore the standout.

Scotland had planned to replace UK APD in Scotland with a new devolved Air Departure Tax (ADT) from April next year, initially at a rate of 50% of UK APD [so, an ADT rate of Ł39 from 1 April 2018 instead of the APD rate of Ł78], before being scrapped altogether. However - as with so many other topics in the UK at present - the entire scheme is in limbo while the "strong and stable" Westminster government continues to squabble amongst itself, rather than running the country.

iahphx

A reduction in tax at Edinburgh would increase RATIONAL transatlantic air service to Edinburgh. It would not help Norwegian, unless you consider "helping" to mean losing less money.

The Scottish market is smaller than Dublin's. Dublin has modest taxes. Believe me, if it was a great idea to fly lots of low cost flights across the Atlantic, Ryanair would have done it a decade ago from DUB. It's only 3000 miles to BOS from DUB.

irishguy28

No-one is talking about "helping" Norwegian.

You implied that Norwegian's stated reasons for reducing service from EDI were disingenuous. I have proven that this claim is itself disingenuous - until October it was almost universally assumed that APD would no longer be charged from April 2018 in Scotland, and that a lower Scottish ADT would take its place, before being abolished.

It is now clear that UK APD will continue to apply from Scotland for the foreseeable future.

How so?

Scotland has a higher population than the Republic of Ireland.

If we go along the lines of your argument regarding, say, Emirates, who have "no home market to speak of", then we can't even account for the fact that Dublin is the hub for that airport's largest transatlantic operator, and is therefore able to carry far more passengers than the "Dublin market" alone can sustain. (Dublin is the EU's 11th largest airport in terms of passengers handled, but the 5th largest in terms of transatlantic passengers, behind only Heathrow, Paris-De Gaulle, Frankfurt and Amsterdam. I need hardly remind you that Dublin/Ireland is many times smaller in terms of "market size" than the UK, France, Germany or the Netherlands.

As such, the fact that Dublin handled 20% more transatlantic traffic last year than in the previous year - up to a record 3.5 million - must only be attributed to Dublin's "modest taxes", right?



A decade ago, Ryanair were a mere third of their current size (in terms of passengers carried), and were not yet Europe's largest airline. Their growth plans are still focused on shorthaul...and they are still growing the market.



Ryanair are not "innovators"; once the long-haul ULCC model has been proven, you can expect them to muscle in.

And besides, you know that there were no aircraft capable of sustainably operating low-cost flights across the Atlantic in existence a decade ago.

This assumption that money can't be made across the Atlantic, when there is still such potential scope for growing the market (just look how much European shorthaul has grown over the last 20 years), shows a lack of vision. The TATL is not a zero-sum game with a fixed, unchangeable number of pax.

To return to your "Dublin market", it has doubled in the past 15 years; and transatlantic traffic has more than doubled since 2010 and is growing at 20% per annum. And that's in a stable, mature "market".

irishguy28

iahphx

Norwegian is already warning that their financial results -- which will be announced tomorrow -- are "a mess."

Duh.

https://skift.com/2018/02/13/norwegi...liver-in-2017/

I guess we'll see how messy tomorrow. The problem is that I don't see how their transatlantic model will ever work. High traffic routes from major cities would seem most logical, but the major carriers have gotten more sophisticated in competing against such competition. In the USA, this has caused the ULCCs to seek nonstop markets from non-hub cities which, at least theoretically, stimulates new traffic. But I don't see how that works across the Atlantic. I don't think you can sell enough Hartford-Cork tickets at any price to have a business.

irishguy28

Are you leaking the next route announcement?