Bloomberg News

Norwegian Air Targets California in Dreamliner-Led Low-Cost Push

September 03, 2013

Norwegian Air Shuttle ASA (NAS) will offer flights from Scandinavia to California using the latest batch of Boeing Co. (BA:US) 787 Dreamliner planes it says have made long-haul discount routes newly viable.

Services linking Stockholm with Los Angeles will commence next March, to be followed by flights from Copenhagen in April and Oslo in June, with an introductory fare of $236 each way. Oakland will be served from Stockholm and Oslo starting in May.

“We believe that the U.S is low-hanging fruit,” Chief Executive Officer Bjorn Kjos said today in a press briefing in the Swedish capital, adding that there are few direct flights from Scandinavia to West Coast cities. “People love to fly cheap and they love to fly far.”

Norwegian Air is leveraging the all-composite 787’s lower operating costs as it seeks to offer discounted trans-Atlantic trips at a profit and succeed where long-haul no-frills carriers such as Laker Airways have failed. The company will hire as many as 350 U.S. staff and add bases at existing destinations New York and Fort Lauderdale, Florida, Kjos said in an interview.

Fornebu-based Norwegian began long-haul operations in May and currently has five weekly services from Stockholm and Oslo to Bangkok and six from the two Nordic cities to New York.

Sales Success

Flights to the U.S. metropolis from Copenhagen will commence in February, according to a statement. The carrier will also add a second Florida destination, connecting Oslo with the theme-park resort town of Orlando from May, it said today.

Flights to Fort Lauderdale from the three Nordic bases have already been announced and begin in November. Ticket sales to New York, Bangkok and the Florida city have been “tremendous,” with most summer services fully booked, Kjos said, even after initial trips had to use Airbus SAS A340 jets when 787 handovers were delayed by battery glitches that grounded the Boeing model.

The CEO said in March that the longer-term aim for the Dreamliner, of which there are eight on order, is to focus on destinations in Asia, tapping demand for affordable long-haul trips among the emerging middle class.

The company has applied for a permanent air operator’s certificate in Ireland to establish a low-cost domicile for the long-haul unit that would permit the addition of flights to cities such as Beijing, Kjos said. Approval may take six months.

Norwegian, founded in 1993, switched to a discount model in 2001, emulating Ryanair Holdings Plc (RYA) and EasyJet Plc (EZJ) to sharpen short-haul competition with state-backed Nordic No. 1 SAS Group AB, and ranks as Europe’s fourth-largest low-cost airline.

The company last year ordered 222 Boeing and Airbus single-aisle jets valued at 127 billion kroner ($21 billion).

To contact the reporters on this story: Kari Lundgren in London at klundgren2@bloomberg.net; Veronica Ek in Stockholm at vek@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • BA
    (Boeing Co/The)
    • $129.55 USD
    • 0.20
    • 0.15%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus