Norwegian Air Shuttle

Norwegian Air Shuttle

den 29 oktober 2015

Important legal information


No-frills airlines conquered half of the total market volume. After improving service and punctuality, even business travelers have switched to the cheaper alternative. This year especially low oil prices and the extremely high holiday traffics in summer have also increased airline’s profits. Next to Easyjet and Ryanair the Scandinavian Airline Norwegian Air Shuttle was able to raise its market share.

Norwegian Air Shuttle recently ordered 19 Dreamliners from Boeing, worth 5 billion USD. They have the option to order 10 additional. This is the highest number any airline has ever ordered from Boeing and could indicate high growth forecasts. The new aircrafts are planned to be used on long-distance flights. So far there is no other no-frill airline that offers long-distance flights. Ryanair once announced to open up this segment, but the operation failed due to high costs regarding the destinations. Norwegian Air Shuttle is aiming to smaller airports that are not connected with long-distance destinations yet. According to CEO Björn Kjor transatlantic flights could be offered for 69 USD one-way by 2017.

The only competitor in this business area might be Lufthansa. Their associated company Eurowings is starting first flights to Cuba and the Dominican Republic on the 2nd of November. According to Carolyn McCall, Easyjet, Eurowings could not be regarded as a no-frill airline though. Like Germanwings they wouldn’t be able to offer cheap flight tickets and wouldn’t have low costs. Additionally it will be hard for the German company to establish a discount-business with lasting strikes.

Norwegian Air Shuttle’s earnings increased by 68% compared to the year before, but are still 7% lower than expected. Reasons might be excess personnel due to high expected production growth during the next quarter, currency effects and short-term costs through technical maintenance.

 

 

2020-12-04 22:13:03