Norwegian Air Shuttle
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OK, good news for Norwegian 
But - could anyone explain the logic of splitting the order between Boeing and Airbus, apart perhaps from a slight improvement in deliver times?
An order of this size will obviously mean extensive negotiation to beat the price well below the quoted list rate - but why haggle so far, when an even larger order might result in additional discounts beyond this?
Then there's the extra costs of two sets of pilots with different type ratings. I presume the cabin crew can switch between them, but wouldn't they still need some additional training (how do deal with the exits etc) to do this?
But - could anyone explain the logic of splitting the order between Boeing and Airbus, apart perhaps from a slight improvement in deliver times?
An order of this size will obviously mean extensive negotiation to beat the price well below the quoted list rate - but why haggle so far, when an even larger order might result in additional discounts beyond this?
Then there's the extra costs of two sets of pilots with different type ratings. I presume the cabin crew can switch between them, but wouldn't they still need some additional training (how do deal with the exits etc) to do this?
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OK, press release says:
Surely, capacity is down to the size of the jets you order, and same for flexibility? I'm surprised they are focusing largely on the 150 seat area, when they have previously operated F50s. If they want flexibility, there must be loads of thinner routes within the Nordic region that would benefit from lower cost competition using smaller jets or turboprops?
And is it really up to one airline to ensure there is competition between the players?
“Norwegian has now reached a size where we will benefit from having two suppliers, both in terms of ensuring adequate flight capacity, flexibility and competition between two manufacturers,” said Kjos.
And is it really up to one airline to ensure there is competition between the players?
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Totally_Bananas, already today there are both famous people from Sweden and Denmark on their tails. Next out I suspect famous people from Finland, and I'm certain there could space famous British or Spanish too - bases at Malaga and Gatwick may not be that far away?
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Jabird,
Can only assume they were offered good discounts from both Boeing and Airbusfor a certain number of planes.Otherwise makes little sense in ordering both, 2 types simulators, engines etc.
Nigel
Can only assume they were offered good discounts from both Boeing and Airbusfor a certain number of planes.Otherwise makes little sense in ordering both, 2 types simulators, engines etc.
Nigel
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Nigel,
Exactly. Conventional discounting for a bulk product may be along the line of x% off when you order over 10, then additional discount over 50, 100 and so on.
But you don't pop into your local wholesale warehouse and shove 300 planes in a trolley, wave the corporate credit card and walk out. I would have expected a bigger discount for getting the whole lot from one, combined with lower operating costs.
Unless both AB and B are so busy they could only fulfil 100 orders each?
The Southwest mantra was always stick to one type, and that is exactly what Ryanair have followed to the letter. I can understand mixing types to get different performance - e.g. like BE do between the Q400 and the E-Jets, and I can see the sense in smaller a/c for thinner routes or higher frequency - as Jetblue have done with their E-Jets.
Clearly the guys running Norwegian are no fools - I am just curious as to the logic behind this order.
Exactly. Conventional discounting for a bulk product may be along the line of x% off when you order over 10, then additional discount over 50, 100 and so on.
But you don't pop into your local wholesale warehouse and shove 300 planes in a trolley, wave the corporate credit card and walk out. I would have expected a bigger discount for getting the whole lot from one, combined with lower operating costs.
Unless both AB and B are so busy they could only fulfil 100 orders each?
The Southwest mantra was always stick to one type, and that is exactly what Ryanair have followed to the letter. I can understand mixing types to get different performance - e.g. like BE do between the Q400 and the E-Jets, and I can see the sense in smaller a/c for thinner routes or higher frequency - as Jetblue have done with their E-Jets.
Clearly the guys running Norwegian are no fools - I am just curious as to the logic behind this order.
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I completely agree. Very confusing (or extremely optimistic) as to where they will place these airplanes. It will be interesting to watch SAS, Ryanair, EasyJet, Air Berlin and Wizzair to see how they respond - especially the main LCC players. I suspect Norwegian will develop hubs (maybe 2-3 hubs) in each Scandanavian country if that is allowable. I also suspect that the orders are staggered over several years. The current 800s will probably be replaced by the 737 Max and Neo airplanes. I given the choice between the MAX and the NEO, I'd personally fly the NEO. 
I'd actually like to see Ryanair rebuff Airbus and Boeing and order a huge number of cheap Chinese airplanes (the new Airbus-like aircraft - cannot recall the name) to replace all of their Boeings. Now that would be interesting...
Does anyone know when the first 787 will likely arrive and start service? I had heard New York as a definite destination from Oslo - any other likely destinations for the 787s? I am hoping they order more than just 6 787s - especially since they will have a massive fleet to feed them.............
I'd actually like to see Ryanair rebuff Airbus and Boeing and order a huge number of cheap Chinese airplanes (the new Airbus-like aircraft - cannot recall the name) to replace all of their Boeings. Now that would be interesting...
Does anyone know when the first 787 will likely arrive and start service? I had heard New York as a definite destination from Oslo - any other likely destinations for the 787s? I am hoping they order more than just 6 787s - especially since they will have a massive fleet to feed them.............
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Financing
I heard a rumour, that a condition for investors to finance the 222 aircraft, is that all pilots will be employed as contractors - No permanent employess.
Can anybody confirm this?
Brgds
SE210
Can anybody confirm this?
Brgds
SE210
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That's gibberish SE210. I don't think Kjos would have allowed an outsider to impose in detail how to conduct their business. You may well have heard this rumour in Denmark, but I bet the people you have heard it from are either employed by SAS or other Danish carriers, but it could also be people that have applied for a job in Norwegian and didn't get it. Isn't Nykøbing Mors (aka Jante) a Danish town?
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Okay - LN-KGL
So you believe, that outside investors of about 20 Billion USD will have no influence on how the company is run???
I find that hard to believe - even if I am not Norwegian.
Brgds
SE210
So you believe, that outside investors of about 20 Billion USD will have no influence on how the company is run???
I find that hard to believe - even if I am not Norwegian.
Brgds
SE210
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One US analyst suggests that split between NEO and MAX is a hedge against problems with new engines given widely divergent technology approaches i.e. LEAP 1B (more stages, running hotter) and the GTF (fewer stages, running cooler but with gearbox). MAX only available with the LEAP 1B so if Norwegian select the GTF for the NEO the theory might hold water. Of course, if they select the LEAP for the NEO as well it's clearly hogwash!
Norwegian used to fly a route from London (can't remember if it was Stansted or Gatwick) to Tromso, which has now been dropped.
I can understand that as a route it's likely to be very seasonal, with peaks from December-March (for aurora borealis and husky sledging trips) and from May-August for midnight sun / Hurtigrute - maybe 3 flights per week would suffice
Question is - why did it get dropped ?
I can understand that as a route it's likely to be very seasonal, with peaks from December-March (for aurora borealis and husky sledging trips) and from May-August for midnight sun / Hurtigrute - maybe 3 flights per week would suffice
Question is - why did it get dropped ?
compton - thank you for your insightful and detailed answer.
Anyone else out there who can talk knowledgably rather than just make rough guesses ?
Anyone else out there who can talk knowledgably rather than just make rough guesses ?
Last edited by davidjohnson6; 14th Jun 2012 at 15:09.
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A more insightful maybe?
Norwegian has a shortage of aircraft and they pick the routes that brings the best yield. A return flight TOS-LGW takes twice as long as a return flight TOS-OSL. A return flight TOS-LGW last longer than the usual break between morning rush and afternoon rush. In other words this route has to wait until Norwegian get more aircraft - and the British are out of recession.
Norwegian has a shortage of aircraft and they pick the routes that brings the best yield. A return flight TOS-LGW takes twice as long as a return flight TOS-OSL. A return flight TOS-LGW last longer than the usual break between morning rush and afternoon rush. In other words this route has to wait until Norwegian get more aircraft - and the British are out of recession.
Why are Norwegian classed as a LOCO? Having checked fares recently they appear almost on par with SK on some routes. The other half also interested in flying to Tromso Feb next year to get the Northern Lights "experience". I am somewhat overcome with the fares with both Norwegian and SK fo such delights.
Nivsy
Nivsy
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nivsy, LOCO = LOw COst airline
A common error is to equate low costs and low prices, but that has never been the same. The Norwegian ticket prices are adapted to what the revenue mangement think potensial passengers are willing to pay. OSL-TOS is almost the same distance as OSL-LGW (1119 km vs. 1229 km), and the price difference is only £15 on a return ticket (£134 vs. £119) at Norwegian. SAS wants at least £170 for return ticket OSL-TOS and minimum £175 for a return ticket OSL-LHR.
All prices are for flights in February 2013.
A common error is to equate low costs and low prices, but that has never been the same. The Norwegian ticket prices are adapted to what the revenue mangement think potensial passengers are willing to pay. OSL-TOS is almost the same distance as OSL-LGW (1119 km vs. 1229 km), and the price difference is only £15 on a return ticket (£134 vs. £119) at Norwegian. SAS wants at least £170 for return ticket OSL-TOS and minimum £175 for a return ticket OSL-LHR.
All prices are for flights in February 2013.