View Single Post
Old 30th Dec 2018, 21:00
  #28 (permalink)  
calypso
 
Join Date: May 2000
Location: SV Marie Celeste
Posts: 540
Nah. Big egos playing to see who has the biggest aviation group in Europe. If you buy NAS and close it down you don't achieve anything wizzair or transavia or whoever would just grow to fill the gap. IAG wants to be the biggest and to grow it needs to buy up smaller players. NAS + VLG are bigger than Easyjet and makes IAG the 2nd biggest player in European Low cost shorthaul. Keeping the separate brands gives the appearance of choice to consumers while taking advantage of economies of scale. It also fills a gap that cannot then be filled by other competitors. In the other hand a large airline is quite a good hedge to a large oil company hence the Norwegian sovereign fund is not letting go that easily, unlike other investors they are in a position to take the long view.

Low cost long haul is just a marketing concept, quite a nice one if it helps you to promote brand awareness and drives consumers to your website. Norwegian does not really need to be low cost to benefit from the low cost label, specially since there isn't really any benchmark as to what constitutes low cost in long haul. Not may tickets sold at low cost prices I suspect. Proof of that is they have increased the size of the premium cabin which tends to be quite full.
calypso is offline