Two years ago, Norwegian Air Shuttle brought a low-cost business model to the U.S. with cheap flights between the U.S. and Europe, provoking rival carriers and airline employees on both sides of the Atlantic.
Now Norwegian will begin flying directly to the Caribbean from Baltimore, Boston, and New York under an Open Skies agreement between the United States and the European Union and Norway, expanding its cut-rate business right in the backyard of the U.S. airline industry.
Norwegian Air Shuttle Boeing 737-8JP (39006/3583) LN-DYN "Karen Blixen - Danish author" is captured on short final to Rwy 26L at London-Gatwick (LGW/EGKK) on September 15, 2011.
(Photo by Terry Wade)
Norwegian said today it will launch winter flights on Boeing 737s from the three cities to Guadeloupe and Martinique on Dec. 3, with fares starting at $79 from the U.S. The New York flights, from JFK International Airport, will operate three times a week; the other flights, twice weekly.
The carrier hopes to profit during the low season for European leisure travel, when it typically parks about 10 of the jets, Norwegian’s chief executive officer, Bjørn Kjos, said in an interview at the company’s New York office. If he can make money on the routes, Kjos said, he may expand service in the Caribbean the following winter.
The venture comes as the three biggest U.S. airlines urge the Obama administration to halt the much larger U.S. expansion of Persian Gulf airlines, which they accuse of receiving unfair subsidies from the United Arab Emirates and Qatar. Emirates Airlines drew the ire of U.S. and European carriers when it began flying between New York and Milan in October 2013. Delta Air Lines and Alitalia challenged that flight in Italian courts and lost a ruling in December.
The Norwegian flights could open a fresh round of tussling between the carrier and U.S. airlines and unions, which have lobbied heavily against Norwegian's application at the U.S. Department of Transportation for a foreign air carrier permit. Norwegian is seeking the permit for an Irish subsidiary it would like to use to expand its low-cost, long-haul operations.
Opponents argue that with its long-haul business model, Norwegian Air threatens U.S. aviation jobs and trans-Atlantic flights by hiring crews in nations that have lower wages and less stringent regulatory rules than Scandinavia.
The company said the Caribbean flights will be staffed by European crews.
“We can fly wherever we like with the Open Skies agreement,” Norwegian's Kjos said, arguing that flying to the French territories is the same as flying to France. "It should be Open Skies all over the world."
Kjos said the flights are a small operation unlikely to draw a backlash from competitors, given the service currently offered to Martinique and Guadeloupe from the U.S. “I don’t see it,” said Kjos, an attorney and former fighter jet pilot. “These islands aren’t being served.”
Air France-KLM offers winter service to the two destinations from Miami, with stops in Haiti. American Airlines flies those routes from Miami year-round.
Kjos noted that Norwegian already has a U.S. presence in its service to Europe on Boeing 787s. The airline is planning new flights this year to Europe from Las Vegas, Puerto Rico, and the Virgin Islands. Kjos said Boston is also a city from which Norwegian might begin trans-Atlantic service.
On European and North African routes, Norwegian Air flies 85 Boeing 737-800s, about 10 of which the company idles in winter, when leisure traffic declines. It decided that flying three of those planes in the Caribbean from December to April made better financial sense than parking them, Kjos said.
Guadeloupe and Martinique have a combined population of about 1 million people, with relatively high incomes, he said, and will generate some traffic from those who want to visit family and friends in the U.S. Access at JFK Airport, one of four U.S. airports constrained by landing slots, won't be a problem because the flights would arrive at off-peak periods after 7 p.m., Norwegian Air officials said.
“We said, ‘How can we utilize the fleet in other areas?’ If I don’t believe I can earn a profit, then I don’t fly them,” Kjos said.
Airlines venturing this far afield generally connect the flights to their home networks. Ethiopian Airlines launched a Los Angeles-to-Dublin flight on June 20, with continuing service to Addis Ababa. Air New Zealand extends a daily Auckland-to-Los Angeles flight to London.
Norwegian isn't connecting the Caribbean flights to its trans-Atlantic network, although unlike Ethiopian and Air New Zealand, it is a low-cost carrier.
(Justin Bachman - Bloomberg)