Flying doesn’t come cheaply these days, particularly on long-haul flights across the Atlantic.
But Norwegian Air Shuttle, which specializes in low-cost flights within Europe, plans to bring its pared-down model to the United States and Asia.
Its strategy, however, comes with a few twists: Norwegian is moving its long-haul operations from Norway to Ireland, basing some of its pilots and crew in Bangkok, hiring flight attendants in the United States, and flying the most advanced jetliner in service — the Boeing 787 Dreamliner. In the process, it has infuriated established carriers and pilots.
Other airlines have tried a low-fare approach on long-haul flights, with little success. But Bjorn Kjos, Norwegian’s ebullient chief executive, is confident that his unconventional approach will allow the airline to offer fares 50 percent cheaper than the competition’s.
Norwegian started flying between Oslo and Kennedy Airport in New York in May and has round-trip fares starting at $509. The second-lowest price found recently was $895 on United Airlines flying out of Newark Liberty International Airport. Norwegian plans to add more than a dozen new routes this year, including direct service from London to New York and Copenhagen to Fort Lauderdale, Fla., once regulators approve its new registration in Dublin.
“We expect to see more dramatic reductions in fares,” said Mr. Kjos, a former maritime lawyer who co-founded the airline in the early 1990s.
But Norwegian’s novel model has raised stiff opposition from American labor groups, airlines and pilots who see it as a backhanded attempt to outsource cheaper labor and undercut competition.
Norwegian, these critics argue, is unfairly taking advantage of an open-skies agreement between the United States and Europe even though Norway is not a member of the European Union.
“Complex is not a good word here for what they are trying to do; I’d say it’s convoluted,” said Lee Moak, president of the Air Line Pilots Association, a union that is one of the leading opponents of Norwegian’s plans. “They want to exploit legal and regulatory loopholes to give them an unfair economic advantage over U.S. airlines that operate in a global marketplace.”
In a joint letter to the Department of Transportation, Delta Air Lines, United Airlines and American Airlines said the low-cost airline wanted to skirt labor laws by resettling its long-haul operations in Dublin, while using a Singapore-based company to hire pilots on its behalf in Thailand. The result would give it “a competitive advantage on trans-Atlantic routes in direct competition with U.S. carriers.” (A Norwegian subsidiary, called Norwegian Air International, is waiting to be certified as an air carrier by Irish civil aviation authorities.)
The lobbying battle is heating up. American and European Union officials and pilots met in Oslo this week to press their opposition to Norwegian’s expansion plans. At the same time, the Norwegian transportation minister, Ketil Solvik-Olsen, made the airline’s case on Monday in a letter to his American counterpart, Anthony Foxx.
“I believe we should not hinder the establishment of new business models just because we cannot know for sure how they will develop,” Mr. Solvik-Olsen said in his letter.
Norwegian’s case may be testing the spirit of the labor protection provisions in the open-skies agreement, according to William S. Swelbar, an aviation expert and the executive vice president at InterVISTAS Consulting, but the airline will provide the type of competition to United States carriers and their global partners that was contemplated by regulators.
“They are the first true low-cost carrier to take advantage of the opportunities provided for under that agreement,” he said. “As in any agreement, the first case always challenges the meaning of the negotiated language.”
Mr. Swelbar added Norwegian could be setting a precedent that incumbent airlines probably wish to avoid. “Maybe the fear is that if Norwegian is successful, then that will invite Ryanair and some U.S. low-cost carrier and others to take advantage of what was negotiated between the U.S. and the E.U.,” he said.
Other airlines are beginning to test those waters, too. Emirates, the Dubai-based giant airline, recently began flying direct service between New York and Milan, a move that has also angered domestic carriers.
Norwegian’s long-haul business model essentially establishes new bases for pilots and flight attendants in the United States and Asia that will serve nonstop destinations in Europe.
The airline opened a base in Bangkok last spring, as it began its international service out of Thailand with flights from Bangkok to Oslo and Stockholm. Pilots for the 787s based there come from various European countries, and have previously flown for airlines like British Airways and KLM Royal Dutch, Mr. Kjos said. They are paid competitive salaries averaging $200,000 a year, he said.
The airline also just started two new bases in the United States and plans to hire 300 flight attendants and ground agents in New York and Fort Lauderdale.
“You need to put your crew in large catchment areas,” Mr. Kjos said, meaning it makes more financial sense for the airline to hire crew members outside of Europe since that’s where most of its long-haul passengers and traffic will come from. For instance, out of the 10 weekly flights that Norwegian plans to have out of Kennedy Airport, just three will fly to Norway.
In a letter to the Department of Transportation, the airline said its planned trans-Atlantic service was “precisely the kind of pro-competitive, pro-consumer, pro-growth innovation that the department has long supported and that was envisioned by the framers of the Open Skies Agreement.”
Norwegian, the third-largest low-cost airline in Europe after Ryanair and EasyJet, carried more than 20 million passengers last year.
It has shown no signs of slowing down. In 2012, it made what was then the largest plane order in European history, pledging to buy 222 jets from Boeing and Airbus worth nearly $22 billion at list price. Most of those are the more efficient B737 Max or A320 Neo — narrow-body planes for the carrier’s European network that will be delivered starting in 2016.
The order also included 10 787s that will form the backbone of the airline’s long-haul operations. Three were delivered last year; Norwegian will get four more this year and the rest through 2016. The 787s are also critical to the business plan since they promise fuel savings of 20 percent compared with similar-size planes. Norwegian is flying 291 passengers in a coach-only cabin, with 32 seats in a “premium economy” configuration that provides a little more legroom. (The planes have individual TV screens, but the airline charges for food.)
The long-haul plan has had its share of hiccups. The 787 has had numerous problems since its commercial debut in 2011, and the fleet was grounded for three months last year after a couple of unresolved battery flameouts.
Norwegian was forced to lease an Airbus A340 for its new long-haul route and Mr. Kjos has complained loudly to Boeing about the fleet’s reliability.
In the most recent incident, in January, a flight from Bangkok to Oslo was delayed 19 hours after passengers noticed a fuel leak from one of the plane’s wings.
Still, Mr. Kjos remains confident in the 787. “It’s a great airplane,” he said.
Labor relations have also been tense in the past year, particularly after the airline decided to hire a Thai cabin crew at lower wages than those paid to Scandinavian employees. Norwegian pilots threatened to go on strike but a deal for a new contract was eventually reached in November.
“Southwest and JetBlue established new standards of fares,” he said. “That is exactly what will happen across the Atlantic. We just need to be incredibly efficient.”
Mr. Kjos once wrote a spy novel about his years as a fighter pilot in the Norwegian air force policing the skies against potential intruders from the Soviet Union.
He now seeks to challenge the iron grip of the three global airline alliances — Star Alliance, SkyTeam and Oneworld — which he said accounted for 87 percent of flights across the Atlantic. (United, Delta and American each belong to a different group.)
“Obviously they want to keep competition out.” Mr. Kjos said. “Especially low-cost carriers.”
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