Low-cost airline Norwegian aims for partnership with Finnair

Norwegian will also compete with Finnair and Blue1 for passengers on Finnish domestic routes

Bjørn Kjos

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Norwegian Air Shuttle, a stock exchange listed low-cost airline from Norway, looks set to become Finnair’s competitor and possibly even a partner next year.
      Norwegian will become Finnair’s competitor in March-May of 2011 when it starts to fly passengers on the Finnish carrier’s most important domestic routes.
      It may also become Finnair’s partner, if it starts shuttling passengers from various European locations to connect with Finnair’s long-haul Asian flights.
      According to Norwegian CEO Bjørn Kjos, the possible partnership with Finnair will be decided on in a matter of weeks rather than years.
      “Possibly during the first quarter of next year”, Kjos says.
      Kjos was interviewed in the American west coast city of Seattle last week. The CEO was there to pick up the latest addition to the airline’s 85-strong fleet from American aircraft manufacturers Boeing.
     
Norwegian operates according to the low-cost airline business model. For example, the airline charges a separate fee for checked-in luggage.
      Finnair, on the other hand, operates like a traditional network airline and offers a wider range of services for the charged airfare.
      According to Kjos, the companies’ different approaches can be meshed together.
      “It is but a technical issue to make the two differing systems talk to each other”, Kjos explains.
     
Compared with Finnair, Norwegian has two operational advantages.
      The unit cost-effectiveness with the company’s workforce is 44 per cent better than that of Finnair.
      Furthermore, Norwegian is renewing its fleet and is switching to new Boeing 737-800 planes.
      According to aviation analysts, the 737-800 uses 3-5 per cent less fuel per passenger than the Airbus A320 aircraft used by Finnair.
      “Finnair would benefit because our expenses are smaller in the feeder traffic. Finnair could concentrate its efforts on the long-haul flights”, Kjos reckons.
     
If the company’s promises materialise, Finnish air travellers may soon begin to benefit from Norwegian’s competitiveness.
      This coming spring Norwegian will commence flights between Helsinki and Oulu, and Helsinki and Rovaniemi.
      The company has analysed carefully the price level of airline tickets in Finland.
      “Far too expensive. The prices should come down by 30 to 50 per cent”, Kjos states.
     
Kjos believes that Norwegian will steal some of its passengers from the Finnish airlines Finnair and Blue1, which currently operate on the routes in question.
      According to Kjos, however, the bulk of Norwegian’s future Finnish customers will be formed by those passengers who until now have opted to travel by bus or train because of the higher cost or air travel.
      In other words, Norwegian is unlikely to snatch away all the clients from the Finnair planes, Kjos reckons.
     
Kjos does not see any reason why Norwegian and Finnair could not be competitors and partners at the same time.
      “It is just business. I do not believe Finnair has any ill will as such against us”, Kjos explains.
      What also paves way for some form of future cooperation is the fact that Finnair owns five per cent of Norwegian Air Shuttle.
      Finnair received the stock as a payment for selling its share in the Swedish cut-rate airline FlyNordic to Norwegian in 2007.


Previously in HS International Edition:
  Influx of budget airlines into Finland´s airspace continues (29.4.2010)
  Cut-rate airline Norwegian to launch flights from Helsinki to Stockholm and Oslo (12.2.2010)

Links:
  Bjørn Kjos (Wikipedia)
  Norwegian Air Shuttle (Wikipedia)
  Norwegian

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