Norwegian Air Shuttle may quit Ireland
Thread Starter
Join Date: Dec 2012
Location: Gatwick
Posts: 452
Likes: 0
Received 0 Likes
on
0 Posts
Norwegian Air Shuttle may quit Ireland
UPDATE 1-Norwegian Air halts talks to buy Dreamliners, may quit Ireland
* Suspends talks on Boeing plane due to US govt delay
* CEO says in letter that may rebase long-haul fleet in Norway
* Share price falls after comments (Adds detail from the CEO's letter)
By Joachim Dagenborg and Terje Solsvik
OSLO, April 28 (Reuters) - Budget airline Norwegian Air has suspended talks on buying 20 Dreamliner planes from Boeing because of a delay in receiving U.S. backing for its long-haul plans, Chief Executive Bjoern Kjos said in a letter.
The airline may also reconsider plans to locate its long-haul operations in Ireland, giving up the advantage of having a European Union-based carrier, Kjos told Irish transport minister Leo Varadkar in a letter dated April 23.
Norwegian launched flights to the U.S. and Bangkok from its Nordic bases last year and obtained an Irish air operators' certificate, hoping to base the business in the EU, where it can operate under more favourable conditions and take advantage of the Open Skies trade between the U.S. and the EU.
Norwegian is operating its flights to the U.S. under a temporary permit issued by the government in Oslo.
Its application to the U.S. Department of Transportation for a permanent licence, made via Norwegian's Irish affiliate, has been fiercely contested by its rivals and by unions.
They argue that Norwegian is simply trying to escape high Nordic labour costs and wants to employ cheap Thai crew, gaining an unfair advantage.
"Unfortunately, the delay in the DOT process has given us no other choice than to put our ongoing negotiations with Boeing to purchase 20 new 787-9 Dreamliner aircraft - due to be registered in Ireland - on hold until Norwegian Air International's future in the U.S. has been decided," Kjos said in the letter seen by Reuters on Monday.
"An additional delay - or in the worst case, a negative decision by the U.S. DOT - may regrettably force us to reverse our commitment to build an international long-haul airline in Ireland."
Norwegian has been expanding at breakneck pace in recent years and has more than 200 aircraft on order. It is opening bases across Europe and plans to take on one of the most competitive markets this summer, launching long-haul flights between London and New York.
If it left Ireland, where its long-haul planes are registered, it would rebase them in Norway, where it has a permit to operate, Kjos said.
The firm already has commitments to buy or lease 14 Dreamliners but it has been looking for additional planes, because it consumes 20 percent less fuel than older jets, giving the firm a cost advantage. The 20 new Dreamliners have a combined list price of $5 billion.
* Suspends talks on Boeing plane due to US govt delay
* CEO says in letter that may rebase long-haul fleet in Norway
* Share price falls after comments (Adds detail from the CEO's letter)
By Joachim Dagenborg and Terje Solsvik
OSLO, April 28 (Reuters) - Budget airline Norwegian Air has suspended talks on buying 20 Dreamliner planes from Boeing because of a delay in receiving U.S. backing for its long-haul plans, Chief Executive Bjoern Kjos said in a letter.
The airline may also reconsider plans to locate its long-haul operations in Ireland, giving up the advantage of having a European Union-based carrier, Kjos told Irish transport minister Leo Varadkar in a letter dated April 23.
Norwegian launched flights to the U.S. and Bangkok from its Nordic bases last year and obtained an Irish air operators' certificate, hoping to base the business in the EU, where it can operate under more favourable conditions and take advantage of the Open Skies trade between the U.S. and the EU.
Norwegian is operating its flights to the U.S. under a temporary permit issued by the government in Oslo.
Its application to the U.S. Department of Transportation for a permanent licence, made via Norwegian's Irish affiliate, has been fiercely contested by its rivals and by unions.
They argue that Norwegian is simply trying to escape high Nordic labour costs and wants to employ cheap Thai crew, gaining an unfair advantage.
"Unfortunately, the delay in the DOT process has given us no other choice than to put our ongoing negotiations with Boeing to purchase 20 new 787-9 Dreamliner aircraft - due to be registered in Ireland - on hold until Norwegian Air International's future in the U.S. has been decided," Kjos said in the letter seen by Reuters on Monday.
"An additional delay - or in the worst case, a negative decision by the U.S. DOT - may regrettably force us to reverse our commitment to build an international long-haul airline in Ireland."
Norwegian has been expanding at breakneck pace in recent years and has more than 200 aircraft on order. It is opening bases across Europe and plans to take on one of the most competitive markets this summer, launching long-haul flights between London and New York.
If it left Ireland, where its long-haul planes are registered, it would rebase them in Norway, where it has a permit to operate, Kjos said.
The firm already has commitments to buy or lease 14 Dreamliners but it has been looking for additional planes, because it consumes 20 percent less fuel than older jets, giving the firm a cost advantage. The 20 new Dreamliners have a combined list price of $5 billion.
Join Date: Jun 2011
Location: London, UK & Europe
Posts: 2
Likes: 0
Received 0 Likes
on
0 Posts
Of course it would have nothing to do with loco long haul flights not being very easy to be profitable. Flying over 20 B787 on long haul routes was and will never happen wherever they are registered IMO.
Join Date: Feb 2004
Location: London
Posts: 523
Likes: 0
Received 0 Likes
on
0 Posts
Openskys my **s.
Protectionism is alive and well in Brussels and Washington with a little help from three nice little cartels !
Evidence EK and Milan -JFK
Etihad and associates
JU/EY codeshares denied
EK and Air Berlin equity shares under investigation along with those of Etihad Regional
Biman proposed Dacca via Birmingham to JFK application stalled refer back to precedent set by EK Milan case.
And not a little of their own incompetence !
Appears the EU-US openskys treaty may have no provision for 5/7th freedom operations beyond those pre-existing in national treaties.
Protectionism is alive and well in Brussels and Washington with a little help from three nice little cartels !
Evidence EK and Milan -JFK
Etihad and associates
JU/EY codeshares denied
EK and Air Berlin equity shares under investigation along with those of Etihad Regional
Biman proposed Dacca via Birmingham to JFK application stalled refer back to precedent set by EK Milan case.
And not a little of their own incompetence !
Appears the EU-US openskys treaty may have no provision for 5/7th freedom operations beyond those pre-existing in national treaties.
Join Date: Nov 1999
Location: Ireland
Posts: 1,621
Likes: 0
Received 0 Likes
on
0 Posts
Join Date: Mar 2006
Location: Oslo, Norway
Age: 63
Posts: 500
Likes: 0
Received 0 Likes
on
0 Posts
Norway was 5th country with an Open Skies agreement with USA from 24 April 1995. In other words Norway was way earlier in the green than most EU countries that got part of Open Skies 30 April 2007 (over 12 years after the three Scandinavian countries). Norway and Iceland became party to the U.S.-EU agreement pursuant to an agreement signed and provisionally applied June 11, 2011.
Source: http://m.state.gov/md114805.htm
Source: http://m.state.gov/md114805.htm
Thread Starter
Join Date: Dec 2012
Location: Gatwick
Posts: 452
Likes: 0
Received 0 Likes
on
0 Posts
01475
Correct Sir.
Starting with LGW to the US in a couple of months with presumably other European to US routes to follow. Interestingly the only major airline group who have not opposed Norwegian's route licence application appears to be IAG, one wonders whether this is because the damage that Norwegian may do to yields is of a greater threat to SAS,Lufthansa and the US legacy carriers.
This also published yesterday.
BA came first for its food and drink, its on board experience, its style and its customer service in short-haul flights according to the survey by travel search site, Skyscanner.
But Norwegian was a surprise contender coming second in most of the categories and first in the value for money one.
EasyJet came second in the 'best value for money' category, with British Airways taking third place, while Ryanair failed to make it to the top five.
Skyscanner's Mary Porter said: "Being a Superbrand and one which Brits are very proud of, it's perhaps not surprising that British Airways has scooped the top spot in our survey.
"However it is particularly interesting to see such strong results for a far less well-known airline, with Norwegian taking second place and goes to show that low cost does not necessarily mean an inferior product or service."
The survey was of 4,000 British traveller, surveyed on their opinion of airlines flying short haul from the UK.
I was surprised that Norwegian did so well in this UK survey, not because the product doesn't justify the result, but more the fact that Norwegian's UK market share is tiny and is virtually unknown outside of LGW
Starting with LGW to the US in a couple of months with presumably other European to US routes to follow. Interestingly the only major airline group who have not opposed Norwegian's route licence application appears to be IAG, one wonders whether this is because the damage that Norwegian may do to yields is of a greater threat to SAS,Lufthansa and the US legacy carriers.
This also published yesterday.
BA came first for its food and drink, its on board experience, its style and its customer service in short-haul flights according to the survey by travel search site, Skyscanner.
But Norwegian was a surprise contender coming second in most of the categories and first in the value for money one.
EasyJet came second in the 'best value for money' category, with British Airways taking third place, while Ryanair failed to make it to the top five.
Skyscanner's Mary Porter said: "Being a Superbrand and one which Brits are very proud of, it's perhaps not surprising that British Airways has scooped the top spot in our survey.
"However it is particularly interesting to see such strong results for a far less well-known airline, with Norwegian taking second place and goes to show that low cost does not necessarily mean an inferior product or service."
The survey was of 4,000 British traveller, surveyed on their opinion of airlines flying short haul from the UK.
I was surprised that Norwegian did so well in this UK survey, not because the product doesn't justify the result, but more the fact that Norwegian's UK market share is tiny and is virtually unknown outside of LGW
Join Date: Apr 2002
Location: FUBAR
Posts: 3,348
Likes: 0
Received 0 Likes
on
0 Posts
Seems that Bjorn has decided to play the "how much money we are spending with you Yanks" card, rightly so.
Personally would love to see the IAA bit scuppered, but , how to make it work with labour costs in Norway is another thing, smacks a little of "end-game", hope he hasn't played the trump card too soon/too obviously.
Personally would love to see the IAA bit scuppered, but , how to make it work with labour costs in Norway is another thing, smacks a little of "end-game", hope he hasn't played the trump card too soon/too obviously.
Join Date: Jun 2011
Location: London, UK & Europe
Posts: 2
Likes: 0
Received 0 Likes
on
0 Posts
It's 34 Dreamliners we are talking about j636 - 8x 787-8 already on order and partly delivered + 6x 787-9 already on order + 20x 787-9 put on hold.
Personally would love to see the IAA bit scuppered, but , how to make it work with labour costs in Norway is another thing, smacks a little of "end-game", hope he hasn't played the trump card too soon/too obviously
Would Irish labour costs be lower tha Norways to operate as they may get it that way.
Join Date: Jun 2005
Location: UAE
Posts: 69
Likes: 0
Received 0 Likes
on
0 Posts
Very easy to change the US departments mind. Just say your cancelling all your Boeing orders. Over 130 planes altogether, that might change there mind. It has worked for rights and slots before.
Join Date: Apr 2009
Location: UK
Posts: 489
Likes: 0
Received 0 Likes
on
0 Posts
The difference here is that the entire US airline industry and most of the Europeans are opposed to Norwegian. Lots more orders than 130 aircraft from them all combined. Boeing isn't stupid either. Last thing anyone wants is one dominant player who can control the market eg: Like Ryanair did when it went shopping for 73s last financial crisis.
Join Date: Jun 2008
Location: ireland
Posts: 79
Likes: 0
Received 0 Likes
on
0 Posts
Chancel orders
If they cancel their orders of dream liners,then there are plenty more companies to take up the slack. That card could have been played 2-3 years ago. Not now.
Join Date: Aug 2002
Location: London (Babylon-on-Thames)
Age: 42
Posts: 6,168
Likes: 0
Received 0 Likes
on
0 Posts
so the Dreamliner hasn't been that hot the last 4 months.
Join Date: Jul 2009
Location: NI
Posts: 1,033
Likes: 0
Received 0 Likes
on
0 Posts
Technically this article is about NorwegianAir International, not Norwegian Air Shuttle ( the parent company which operates 737s to Dublin ).
They are two distinct legal entities; employees cannot transfer between then without resigning from one.
Here's the break-out of Norwegian's intricate web of companies:
https://www.norwegian.com/uk/about-n.../organization/
Norwegian Air International is the Ireland-based company that would damp-lease the 787s back to Norwegian Long Haul. I think that's how it's structured...
They are two distinct legal entities; employees cannot transfer between then without resigning from one.
Here's the break-out of Norwegian's intricate web of companies:
https://www.norwegian.com/uk/about-n.../organization/
Norwegian Air International is the Ireland-based company that would damp-lease the 787s back to Norwegian Long Haul. I think that's how it's structured...
Thread Starter
Join Date: Dec 2012
Location: Gatwick
Posts: 452
Likes: 0
Received 0 Likes
on
0 Posts
El Bunto
You are of course correct, but the point is largely academic ! Its says norwegian on the outside, on the website, to the layman it is the same thing, damage to long haul is damage to short haul ditto the other way round.
I think Bjorn is getting very frustrated with all involved, The Irish seem to have said 'yes' you meet all the requirement for a European AOC which should therefore guarantee 'open skies" to fly between Europe and the USA
Our American cousins want to sell the aircraft, the fact that they have not said NO means they haven't found a reason to reject it, but can't bring themselves to say yes because of the backlash from powerful senators, so they sit on their hands until something gives.
With hindsight Norwegian ought to have set this up before the dream liners turned up, if they had had a European AOC for the 800 fleet flying inter Europe then it might have cut more ice.
Question? how would the US DoT handle an application from Ryanair? even bigger Boeing customer, long standing Irish AOC and the Irish authorities don't seem to have raised any employment practices or safety issue over their operation, far from it, they have gone out of their way to extol the virtues of Ryanair's impeccable safety record and their oversight of it.
Norway should ban all american airlines from flying to Norway, ditto all far East airlines on the ground that they do not have to pay Norwegian unbelievable high social taxes and are therefore social dumping ...........the truth is that the American airlines (and employee's) know they would have to seriously up their game, trust me fly AA economy then Norwegian economy you'd never get on an AA aircraft again
I think Bjorn is getting very frustrated with all involved, The Irish seem to have said 'yes' you meet all the requirement for a European AOC which should therefore guarantee 'open skies" to fly between Europe and the USA
Our American cousins want to sell the aircraft, the fact that they have not said NO means they haven't found a reason to reject it, but can't bring themselves to say yes because of the backlash from powerful senators, so they sit on their hands until something gives.
With hindsight Norwegian ought to have set this up before the dream liners turned up, if they had had a European AOC for the 800 fleet flying inter Europe then it might have cut more ice.
Question? how would the US DoT handle an application from Ryanair? even bigger Boeing customer, long standing Irish AOC and the Irish authorities don't seem to have raised any employment practices or safety issue over their operation, far from it, they have gone out of their way to extol the virtues of Ryanair's impeccable safety record and their oversight of it.
Norway should ban all american airlines from flying to Norway, ditto all far East airlines on the ground that they do not have to pay Norwegian unbelievable high social taxes and are therefore social dumping ...........the truth is that the American airlines (and employee's) know they would have to seriously up their game, trust me fly AA economy then Norwegian economy you'd never get on an AA aircraft again
Join Date: Aug 2002
Location: London (Babylon-on-Thames)
Age: 42
Posts: 6,168
Likes: 0
Received 0 Likes
on
0 Posts
.the truth is that the American airlines (and employee's) know they would have to seriously up their game
American decided to use the farce that is Chapter 11 to say to their employees : "Thanks for your dedication, however because of globalisation, it's cheaper to outsource much of your role. Feel free to re-apply for the same job with an outsourced third party with less money and fewer benefits." Or leave.
We slag off the Wagon Dragons, old women flight attendants who "should retire" and we give awards to Virgin types, young disposable sexy things with no experience that are expected to be used up then foxtrot oscar sharpish before they want a raise.
In any business in that spiral, it's easier to start afresh, than raise your game because behaving like creates a malaise that's very hard to manage.
We continue as a society, to demand more choice for less money staffed by young perfect sexy things. It makes me uneasy, as the mantra of the rich getting richer has never been more true in my lifetime. It's not supposed to be like this. Driving down wages to be competitive with is not a one off, it's a continual corrosive process for too many.
Good point about getting an Irish AOC a while back though, that would have given some credibility I think.
Last edited by Skipness One Echo; 30th Apr 2014 at 17:07.
Thread Starter
Join Date: Dec 2012
Location: Gatwick
Posts: 452
Likes: 0
Received 0 Likes
on
0 Posts
Skipness one echo
I understand your sentiment re Virgin, however as anyone who has flown with Norwegian will testify their selection criteria is a long way way from the fulsome of breast and shallowness of brains, don't get me wrong they employee some stunning looking crew, girls as well, but being north of 30 or 40 or indeed 50 is not an impediment to gaining your wings at Norwegian, the oldest on our summer's 'butterflies" course was 59, the mantra for selection is customer service, not flight deck night stop fodder.....
Many of the Spanish cabin crew were literally in tears when selected by Norwegian after being laid off by Spanish carriers and thought the flying days were over at just age 35+
You should jump a flight with us some time Skipness I'd love to know your objective post flight opinion, trust me this isn't just another LoCo and that's why we win award after award, hopefully the DoT will grant approval soon, it would be good to see the Red Nose 787 based at LGW.
Many of the Spanish cabin crew were literally in tears when selected by Norwegian after being laid off by Spanish carriers and thought the flying days were over at just age 35+
You should jump a flight with us some time Skipness I'd love to know your objective post flight opinion, trust me this isn't just another LoCo and that's why we win award after award, hopefully the DoT will grant approval soon, it would be good to see the Red Nose 787 based at LGW.