Can Norwegian Airlines Do What Freddie Laker Couldn’t?

 

Can Norwegian Airlines do what the late Freddie Laker couldn’t? Can it break the stranglehold that the big carriers have on the transatlantic routes and offer genuinely low cost air fares to and from the US?

With the Christmas holiday season growing from two days into several weeks (!), many of our reader may have missed the announcement made last month by the low cost budget airline that it will be offering flights to the US for as little as £56. This price puts a trip to the US in the same category as a short haul one to Europe.

Like easyJet’s and Ryanair’s pricing policies, the actual cost will probably be much higher than this attention-grapping one. According to Norwegian’s website, seat reservations will cost £25 per person each way, meals will cost £28 each and checked baggage is £40 each way. So the actual cost could be nearer to £149 each way, which is still ridiculously cheap compared with their competitors.

So how can they make their numbers stack up?

Firstly, their aircraft fleet, based around the Boeing 737Max, is ultra-modern and ultra-fuel efficient. Their planes need less fuel than their competitors and as fuel can account for up to 30% of an airline ticket, there are some big savings to be made here.

Secondly, Norwegian has taken a leaf out of Ryanair’s book. So don’t expect to fly into a downtown airport in New York. Be prepared instead to arrive instead in an upstate airport like Newark, which is  about a half hour drive from Manhattan.

Oh, and did we tell you the flights will originate only from Edinburgh? Good news for the canny Scots but less so for the many of us that live South of the Border.

But. We shouldn’t harp. The Airline’s existing flights to the US are, on average 95% full. Airlines make their money by flying full planes and on this basis, Norwegian is making enough money to consider making a full frontal assault on the big carriers which have traditionally dominated this route. So how will they react? Our guess is they’ll have to start reducing prices whilst at the same time playing up  the other benefits they offer passengers – such as starting and ending your journey in a more convenient location.

What they’ll be less wary about doing is what they did to Freddie Laker in the 1970s. Freddie’s much loved Skytrain transatlantic service also offered air fares pitched at £59 but despite boosting transatlantic passenger traffic by over 30% was ultimately forced out of the market by his better-capitalised competitors.

If the prices for this new service seem attractive to us Brits, imagine how excited our US cousins are at the prospect of flying to the UK for $69? Many US publications reported on the story quoting ‘you have no excuse not to travel this year’. Edinburgh hoteliers, watch out, the Yanks are  coming.

 

 

 

 

 

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