By Mitchell Young
WINDSOR LOCKS: Vikings first found their way to the Americas in the tenth century, they reportedly didn’t stick around, but now some are back and they are offering really low cost air service, to Europe from Connecticut.
Nutmeggers taking off to Europe this summer will get a big boost from Norwegian Air [NAS.OL]. The discount airline has chosen Bradley International as a departure point to Edinburg, Scotland. Did we say discount, we mean basically near free, at least for a few passengers. The cost this summer will only be $65 for a limited number of one-way fares, there will be a $99 option available as well.
Passengers will pay additional tariffs, for food, baggage, a reserved seat, headphones and blankets however. A wink from the steward, Oxygen and a trip to the rest room are reportedly still included in the discount price. Considering the ala carte menu, unless your pockets are stuffed with cash,, Scandinavians or no – you might want to steer clear of the Mile-High Club.
Norwegian Air spokesman Anders Lindström, explaining the airline’s fare approach said, "I pay for what I want, you pay for what you want. We don't pay for what everybody else on the plane wants.
The prices may be cheap, but Norwegian Air itself is doing pretty well, sales were up in double digits to $3.2 billion last year. The company has a big expansion in the US in motion and 260 Boeing and Airbus planes are on order for delivery over the next few years. Investors however, are not completely onboard with the company's rapid expansion. The current stock price for the $9 billion market cap company is near its 52 week low, at approximately $250 per share, down from $351 and only 8 times annual earnings.
Getting the rights for expansion has been a circuitous route for the upstart airline. It has been a Viking tour de force of fierce battles with other airlines, regulators and unions for the past three years in both Europe and the US. The airline had to first establish a subsidiary in Ireland to maneuver around tight Norwegian labor and transport laws, then get the Obama Administration to approve their US licenses in spite of intense US airline union opposition.
The Hill news website, reported that US Justice and Transportation officials cited the application as “deeply controversial” in the industry and one of the most “complex” they had evaluated.
AFL-CIO President Richard Trumka was not happy and said after the approvals at the end of 2016,. “the Administration’s decision to allow Norwegian Air International to operate in the U.S. is disappointing and undercuts key protections in place for working men and women. The labor movement is united and ready to fight to overturn the decision.”
Considering that President Donald Trump has even questioned the high costs of Air Force One, and that Boeing is in line for billions in sales, it would seem a tough climb for the unions to get the current administration to back away from this Obama administration decision.
The current announced Norwegian Air expansion is adding 10 new routes and 38 transatlantic flights to and from the southern New England, Hudson Valley NY region, to Edinburgh, Scotland, Belfast, Cork, Shannon and Dublin, Ireland. The airline explained their strategy saying, “flights will focus on smaller US airports – these airports offer good access into New York, Boston and New England, but carry significantly lower landing charges.”
Bjørn Kjos, Norwegian’s founder and CEO, directed his comments in a written statement to passengers, political leaders and consumer advocates, “the wait is finally over for Americans who have been eagerly waiting for Norwegian to launch the cheapest nonstop transatlantic fares.” [ company release ]
In spite of a $9 million stop loss guarantee to attract competitor Aer Lingus to provide service from Bradley to Dublin, Connecticut Governor Dannel Malloy embraced the new airline. In a prepared statement, he said, "with the addition of these flights, travelers flying internationally for business or pleasure have even more convenient travel options in the Greater Hartford region." Adding, "Bradley International Airport is recognized by many as being faster and less stressful than other nearby airports – and with the addition of new flights to Europe, as well as new destinations around the country, that reputation only improves with this decision."
Bradley's CEO, Kevin Dillon, explained last Spring why Bradliey needed to provide incentives to attract Aer Lingus, "we are in a very competitive business, we compete with other airports for passengers." Perhaps with more than 680,000 Connecticut residents of Irish ancestry however, the subsidy was not a huge political risk.
Norwegian isn't expected to have the discount runways to themselves for too long however, new low cost subsidiaries from Air France, British Air and Lufthanasa are in formation and are expected to be taking off soon..