Fast-expanding low-fare carrier, Norwegian has reached agreement to purchase a further 19 Boeing 787-9 Dreamliners, more than quadrupling its current long-haul fleet to 38 aircraft within the next five years. The agreement is the largest single order of 787-9s in Europe and includes purchase options for an additional ten aircraft of the same type.
The new order will facilitate the company’s goal to launch even more long-haul routes and expand its existing network in the coming years as it aims to continue to pressure legacy airlines and introduce more flights from its numerous bases across Europe.
Norwegian currently operates eight 787-8 Dreamliners and has eleven of the bigger 787-9 already on order. With this latest order its long-haul fleet will grow to 38 Dreamliners by 2020 with first deliveries from the new order commencing in 2017. The larger 787-9 will seat an additional 53 passengers to its current 291-seat 787-8s and will be owned by the carrier’s asset company, Arctic Aviation Assets Limited.
"This order of 19 new Dreamliners is a major milestone and enables Norwegian to offer a wide range of new routes to travellers worldwide. After two years of operating low-cost long-haul flights, our load factors have averaged in the nineties, which proves the demand for affordable flights between Europe and the US and Europe and Asia,” said Bjørn Kjos, Chief Executive Officer, Norwegian.
Norwegian has led the way in utilising the performance of the 787 to develop a successful low-cost long-haul operation and the addition of 787-9s to its fleet will enable it to grow its route structure, while providing more range and capacity.
“Future growth and competiveness in the long-haul market depends on the fuel-efficient, state-of-the art 787 Dreamliner. Not least, the Dreamliner offers the best passenger experience,” added Kjos.
The airline currently has a North American focus for its 787 long-haul operations with the Thailand capital, Bangkok, the only market outside of the Americas to be served by the carrier with flights from Copenhagen, Oslo and Stockholm.
In fact Norwegian is currently selling 25 non-stop routes from the US to the UK and Scandinavia, as well as six new winter routes from the US to the Caribbean and actually links the US to more European points than any other European airline, with connection options also available via its expansive short- and medium-haul operations across Europe and into North Africa and the Middle East.
In the coming months Norwegian will add flights to Las Vegas (from Copenhagen and Stockholm), San Juan (Copenhagen, London, Oslo and Stockholm), St. Croix (Copenhagen via San Juan), while next year services will start to Boston (from Copenhagen, London and Oslo).
The carrier will also debut its 737-800 narrowbodies on a new Transatlantic link between Cork and Boston in preparation for the arrival of its 737MAX fleet, which will further expand its opportunities to serve long-haul niche markets through its improved efficiency and extra range.
Many observers had suggested that Norwegian would fail to make its long-haul operations profitable, but this week the carrier confirmed they had made a positive effect to its third quarter results, a pre-tax (EBT) of $134.3 million (1.1 billion Norwegian Krone), a strong improvement from $61.7 million (505 million Norwegian Krone) performance from the third quarter of 2014.
“The third quarter results show that Norwegian’s long-haul operations and international routes are becoming significantly more important. This is where we see most of the future growth potential, enabling the company to compete in a global market with strong competition,” said Kjos.
The Scandinavian and European route networks play an increasingly important role in our long-haul strategy, as many of our passengers use connecting flights with Norwegian,” he added.
Norwegian is known to be studying a number of new markets for growth as it starts planning for the arrival of its new 787-9s. Although further growth in the US is among the scenarios under consideration, a number of other markets are also under evaluation, including São Paulo, Rio de Janeiro, Buenos Aires, Delhi, Mumbai, Cape Town and Durban.
"We are currently negotiating with the two South African cities and those in India, so they will likely be the first ones. Brazil and Argentina will come after that, but it all depends on where we get flight permission first," Kjos recently told Berlingske Business.
The value of serving multiple bases across Europe is that Norwegian can operate to long-haul destinations from a range of different markets from Bergen, Copenhagen, Oslo, Stavanger, Stockholm and Trondheim in Scandinavia, and Helsinki in Finland, through London Gatwick, in the UK, to Alicante, Barcelona, Las Palmas, Malaga and Tenerife in Spain.
Although it is growing its Dreamliner fleet, the type accounted for just 3.0 per cent of its total network capacity in 2014 (it will grow to 4.2 per cent in 2015, based on published schedules, according to OAG data). And while it is certain the 787-9 will enable new city pairs to be introduced, the use of 737s on long-haul flights could also open up exciting new opportunities for long-haul growth from any point on its network.
Norwegian is the third largest low-cost carrier in Europe and the world’s seventh largest, but over the past couple of years its ambitions have positioned it as one of the most prominent operators in the global aviation arena. Since 2005 it has boosted network capacity more than seven fold, an average annual growth rate of 74.3 per cent and with major aircraft orders for short- and long-haul aircraft it has scope for further rapid growth.