Contributor - Europe

Cathy Buyck

Norwegian Air Shuttle has overtaken British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area, even while its pursuit of international long-haul market share has not come without a cost. In fact, the Nordic low-cost carrier’s time and effort in expanding its long-haul network have&nbsp;served to weaken its balance sheet with an unsustainable level of debt. Norwegian carried 1.67 million passengers to or from airports in the New York area in the 12 months to the end of July, beating BA’s 1.63 million, according to data released by the Port Authority of New York and New Jersey (PANYNJ). Data included traffic at John F. Kennedy, Newark Liberty, La Guardia, Stewart, and Teterboro airports (although Teterboro doesn't have commercial airline service).

 


“Fares have been too high for too long as transatlantic routes have been long dominated by carriers with outdated legacies running on fumes,” commented Norwegian CEO and Founder Bjørn Kjos, while noting that the passenger numbers by the PANYNJ also reveal Norwegian flew more customers to and from New York “than any other international airline” in the 12 months leading to July 2018.

 


In addition to overtaking BA, Norwegian has also beaten Emirates and its European rivals Lufthansa, Air France, and Virgin Atlantic to reach the top spot.

 


Norwegian currently operates 16 routes from three airports in the New York City area—John F. Kennedy International, Newark Liberty International, and Stewart International—to Amsterdam, Barcelona, Belfast, Bergen, Copenhagen, Dublin, Edinburgh, Guadeloupe, London Gatwick, Madrid, Martinique, Oslo, Paris, Rome, Shannon, and Stockholm. The LCC launched its first route to New York on May 30, 2013 from Oslo and Stockholm on May 31, 2013, and had to wait years before receiving a foreign air carrier permit from the U.S. Department of Transportation&nbsp;(DOT) for its Irish and UK subsidiaries, Norwegian Air International (NAI) and Norwegian Air UK (NUK).

 


Its application for a foreign air carrier permit under the EU-U.S. open skies agreement met with fierce opposition from a number of U.S. and EU legacy airlines as well as labor groups, which accused Norwegian of operating a flag of convenience model. The procedural delay in approving NAI’s foreign air carrier permit prompted the European Commission to make a request for arbitration over the matter. The UK’s pending exit from the EU could prove tricky for NUK, which holds a UK operating license but is majority owned and controlled by Norwegian interests. Still, Kjos told AIN in a recent interview he harbors no concern about NUK losing its traffic rights from the UK to the U.S.

 


Norwegian’s rapid expansion in the transatlantic market has led BA’s parent company, International Airlines Group, to acquire a near 5 percent stake. IAG’s two approaches to buy the Oslo-based group’s board both met with rejection, though Kjos has said he would sell his stake if the majority of shareholders would opt to divest their shareholdings. To strengthen its financial footing, Norwegian is now trying to sell its Irish leasing division and up to 140 aircraft

 


Norwegian’s entry in the transatlantic market has prompted Europe’s legacy airlines also to venture into the low-cost, long-haul market; IAG launched Level, Air France created Joon, and Lufthansa has begun expanding Eurowings.

 


So far, no U.S. major carrier has entered the transatlantic market with a low-cost brand. The PANYNJ data showed four U.S. airlines—United, Delta, JetBlue, and American—rank by far as the biggest carriers of international passengers out of the main airports in the New York area. Transatlantic services accounted for 26.1 million passengers in the 12 months to July 31, making it the largest of the area’s international markets. &nbsp;

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