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Old 23rd Jan 2019, 09:31
  #62 (permalink)  
Skipness One Foxtrot
 
Join Date: Dec 2011
Location: London
Age: 42
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negotiating an amazing deal from MAG would be easy
It's not all about costs it's about yield and Norwegian would lose traction in the market from an outbound UK perspective as like it or not, a large % of London and SE based travellers who just won't make the trek to STN.
Their long haul strategy was to attack the market by very aggressively building market share in long haul out of London on certain core and under-served US routes. This would mean taking on BA on their home turf in London and under cutting their fares to build serious market share. In reality this means trading at a loss for some substantial period of time as IAG have deep pockets, so they either eventually get a win at Gatwick and fares rise to sustainable levels with losses falling over time, or they surrender the key point of their strategy due to unsustainable losses, which was to be a major player in this UK long haul market. In daz211's scenario, they get a "much cheapness" deal from MAG, move to another airport, and worst of all, leaving behind a lot of the new travellers they have brought to market, to remain at Gatters with BA. It's *really* difficult to shrink to sustainable levels of profitability, and leaving for STN would not take them forward in building market share and critical mass on which they've bankrolled the whole business plan. It's far from as simple as just paying less for the facilities, it's important but there are other factors in play.
And please don't leap all over me (again) for having an anti-Stansted agenda, I used it quite often and it does fine for me, so please no corbynista-style pile in. However in this case, it's not the answer to the business problems being encountered by DI around their Gatwick operations. Perhaps if they had stayed at STN all along and gone "big on a smaller more measured scale", then things might be different, but they stuck a finger in BA's eyes at their second biggest base.
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