Norwegian Air Shuttle

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Norwegian Air Shuttle ASA
Norwegianairshuttlelogo2013.png
IATA
DY
ICAO
NAX
Callsign
NOR SHUTTLE
Founded 22 January 1993
Operating bases
Frequent-flyer program Norwegian Reward
Subsidiaries Norwegian Long Haul
Fleet size 99
Destinations 126
Headquarters Diamanten” building
Fornebu (Bærum), Norway
Key people Bjørn Kjos (CEO)
Bjørn H. Kise (Chairman)
Website norwegian.com

Norwegian Air Shuttle ASA (OSE: NAS), trading as Norwegian, is the third largest low-cost carrier in Europe, the second-largest airline in Scandinavia, and the ninth-largest airline in Europe in terms of passenger numbers.[1] It offers a high-frequency domestic flight schedule within Scandinavia and to business destinations such as London, as well as to holiday destinations in the Mediterranean and the Canary Islands, transporting 20.7 million people in 2013.

As of August 2014, Norwegian operates 98 aircraft of which 90 are Boeing 737s and 7 are Boeing 787 Dreamliners, and is known for its distinctive livery of white with a red nose, with individual portraits of noteworthy Scandinavians on the tail fin. The airline has bases at Oslo (OSL), Copenhagen (CPH), Stockholm (ARN), Helsinki (HEL), London (LGW), Málaga (AGP), Las Palmas (LPA), Alicante (ALC), Bergen (BGO), Trondheim (TRD), Stavanger (SVG), Barcelona (BCN), Tenerife (TFS) and Madrid (MAD).

Norwegian launched its long-haul operation in May 2013. In line with the majority of Norwegian's operations also the long-haul flights are operated by two fully owned subsidiaries. Norwegian Long Haul is a legally separate entity with two unique AOC but shares branding and commercial set up with the rest of the Group. A crew base for long haul is established at Bangkok (BKK).

History[edit]

The routes operated on behalf of Braathens in Western Norway during the 1990s
A Fokker 50 operated by Norwegian Air Shuttle in 1999

Regional airline – 1993–2002[edit]

Norwegian Air Shuttle (NAS) was founded on 22 January 1993 to take over the regional airline services produced by Busy Bee for Braathens in Western Norway. Busy Bee, founded in 1966, was a subsidiary of Braathens that operated a fleet of Fokker 50 aircraft for charter. This included the network of regional services between cities on the west coast of Norway operated on wet lease for the mother company. Following the bankruptcy, NAS took over three leased Fokker 50 aircraft, and started operating from Bergen Airport, Flesland to Haugesund Airport, Karmøy, as well as from Bergen to Molde Airport, Årø or Kristiansund Airport, Kvernberget, and onwards to Trondheim Airport, Værnes. The company was established and owned by former Busy Bee employees and initially had a workforce of fifty.[2][3] It was based in Bergen, but later established a technical base in Stavanger.[4]

From 1 April 1994, the airline also began service from Bergen to Ålesund Airport, Vigra.[5] In 1995, the company received its fourth Fokker 50s, and had a revenue of NOK 86.6 million and a profit of NOK 2.9 million. It flew 50 daily services.[6]

By 1999, the company had six Fokker 50s and flew 500,000 passengers on 20,000 flights.[4][7] The company had a revenue of NOK 172 million and a profit of NOK 13 million. On 2 June 2000, NAS bought the helicopter operator Lufttransport from Helikopter Service.[7] In 2000, the NAS fleet was expanded to seven Fokker 50s. From 2 January 2001, several Braathens routes were terminated, including the NAS-operated services from Kristiansund to Trondheim and Molde. The route from Bergen to Haugesund, and Bergen–Molde–Trondheim were reduced.[8]

On 7 January 2002, NAS took over the responsibility for the route from Stavanger to Newcastle, flying two round trips per day. This was the first route where the airline did not wet lease the aircraft to Braathens, but instead operated the route on their own risk. After Braathens was bought by Scandinavian Airlines System (SAS) in November 2001, all the contracts for the routes on the Norwegian west coast that Norwegian had with Braathens, were cancelled by SAS, who wanted their subsidiary SAS Commuter to take over. NAS had an 18-month cancellation period in their contract with Braathens, however this was not respected by SAS, who terminated the contracts without any notice.[9]

Low-cost carrier – 2002 onwards[edit]

Boeing 737-300 taxiing to the runway, with Henrik Ibsen fin
Norwegian previously operated seven McDonnell Douglas MD-80 inherited from FlyNordic

Following the decision by SAS to purchase Braathens, and the subsequent termination of all the contracts between Braathens and NAS, NAS announced in April 2002 that it would start domestic scheduled services as a low-cost carrier on the most busy routes. From 1 September 2002, the airline re-branded as Norwegian.[10]

The airline opened their second hub at Warsaw Frederic Chopin Airport in Poland, flying to Central European destinations. There were two Boeing 737 operating from Warsaw.[11] The base was closed in 2010. Norwegian Air Shuttle ASA announced 24 April 2007 that they had bought 100% of the Swedish low-cost airline FlyNordic from Finnair plc; becoming the largest low-cost airline in Scandinavia. As payment for the shares in FlyNordic, Finnair got a 5% share stake in Norwegian.[12]

In February 2008 Norwegian announced their first destination outside Europe, non-stop to Dubai from Oslo-Gardermoen and Stockholm-Arlanda.

After the bankruptcy of competitor Sterling Airlines, Norwegian announced that they would open a new hub at Copenhagen Airport and service the most profitable routes. Flights to Aalborg and Stockholm as well as additional flights to Oslo would start immediately, with flights to London, Amsterdam and Rome to follow "shortly after".[citation needed]

On 30 August 2007, Norwegian ordered 42 new Boeing 737-800 aircraft, with an option for 42 more, an order worth US$ 3.1 billion.[13] This order was later increased by 6 aircraft in November 2009. In July 2010 15 of the options were declared, and in June 2011 15 more options were declared, bringing the total order of new, owned 737-800's to 78 aircraft with 12 remaining options. Additionally, Norwegian introduced leased Boeing 737-800 aircraft into the fleet. The first leased 737-800 arrived at Oslo Airport, Gardermoen, Norway, on 26 January 2008. It was registered LN-NOB, and has a tail picture of the Norwegian composer Edvard Grieg. The plane made its first scheduled flight on 1 February. As of August 2013, the number of leased 737-800 aircraft has increased to 29. The first owned 737-800 from the 30 August 2007 order, registered LN-DYA, arrived in Oslo in August 2009. This aircraft was given the tail hero of Norwegian artist Erik Bye.

In April 2010, Norwegian started flights from Oslo-Gardermoen and Stockholm to Helsinki-Vantaa Airport. During early 2011, Norwegian will have three aircraft stationed there and will introduce domestic flights to Oulu Airport and Rovaniemi Airport on 31 March 2011. Starting in May, additional flights will begin to nine additional international destinations.[14][15]

In October 2009, Norwegian announced it intended to start flights from Oslo to New York and Bangkok, requiring new intercontinental aircraft. In 2010, it said it was considering up to 15 intercontinental destinations from Scandinavia, and would also consider services to South America and Africa.[16] On 8 November 2010, Norwegian announced that it had contracted to lease two new Boeing 787 Dreamliners from International Lease Finance Corporation, with delivery in 2012, and that it was negotiating the leasing of additional aircraft.[17]

On 25 January 2012, Norwegian announced the largest order of aircraft in European history. The order consists of 22 Boeing 737-800 and 100 Boeing 737 MAX 8 with an option for another 100 for the latter. Also, it included an order for 100 Airbus A320neo and an option for another 50 Airbus A320neo.[18]

In late October 2012, the airline announced a new base in London Gatwick from spring 2013 with three Boeing 737-800s. The planes will be used on new international routes from London to leisure destinations in Spain, Portugal, France, Italy and Croatia. All announced routes are scheduled to be flown in competition with airlines like easyJet, Monarch, Ryanair and Thomson Airways. Gatwick is already served by Norwegian from a large number of cities in Scandinavia.[19]

Corporate affairs[edit]

Bjørn Kjos, Norwegian's CEO and largest shareholder

Ownership, management and subsidiaries[edit]

The company is headed by CEO and largest shareholder Bjørn Kjos, and the board is chaired by Bjørn H. Kise.[20] The airline is listed on the Oslo Stock Exchange.

The company's head office is in Diamanten, an office building at Fornebu, Bærum outside Oslo.[21] Previously, the airline had its head office functions inside other buildings in Fornebu,[22] but in 2010 moved to Diamanten, which had been the former Braathens, and later SAS Norway, head office.[21]

The Norwegian Group consists of the parent company Norwegian Air Shuttle ASA, and the fully owned subsidiaries Norwegian Air Shuttle Polska Sp.zo.o and Norwegian Air Shuttle Sweden AB. All flights are operated by the parent company Norwegian Air Shuttle ASA; the subsidiaries manage personnel, sales and marketing within certain geographical areas.

Norwegian Air Shuttle ASA owns 100% of the telephone company Call Norwegian AS, 99.9% of NAS Asset Management which owns the new 737-800 aircraft purchased from Boeing, 100% of NAS Asset Management Norway AS, and 100% of Norwegian Long Haul AS, as well as 20% of Norwegian Finans Holding ASA (Bank Norwegian AS).

Norwegian is a member of European Low Fares Airline Association.

Business trends[edit]

The key trends for Norwegian over recent years are shown below (as at year ending 31 December):

A Norwegian Boeing 737-300 takes off from Prague Václav Havel Airport
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Turnover (MNOK) 386 959 1,210 1,972 2,941 4,226 6,226 7,309 8,598 10,532 12,859 15,580
Profits (EBT) (MNOK) −52 −43 −110 39 −32 113 5 623 243 167 623 437
Number of employees (FTE) 320 374 445 560 882 1,417 1,596 1,852 2,211 2,555 2,890 3,738
Number of passengers (M) 0.3 1.2 2.1 3.3 5.1 6.9 9.1 10.8 13.0 15.7 17.7 20.7
Passenger load factor (%) 52 62.5 66.8 78.0 78.6 80.1 78.7 78.2 77.4 79.3 78.5 78.3
Revenue/RPK (Yield) (NOK) 1.17 0.8 0.7 0.68 0.67 0.67 - - - - 0.55
Revenue/ASK (RASK) - - - 0.56 0.54 0.52 0.49 0.47 0.40 0.42 0.43 0.38
Number of aircraft (at year end) 6 8 11 13 22 32 40 46 57 62 68 85
Notes/sources [23] [24] [25] [26]

Destinations[edit]

Destination map
Map of Norwegian's domestic routes in Norway

Norwegian serves Europe, North Africa and the Middle East for both business and leisure markets. In total the airline operates 416 routes to 126 destinations in 35 countries on four continents.

Domestic, intra-Scandinavian and typical European business and leisure destinations have the most frequencies. The busiest routes in Norwegians network are the Oslo to Bergen and the Oslo to Trondheim routes with 15 daily round-trips. Norwegian’s largest non-Scandinavian operation is to London Gatwick with up to 24 daily round-trips.

Typical leisure destinations in Southern Europe are typically served once or twice a day from the main Scandinavian cities. Norwegian's longest Boeing 737 route is from Oslo to Dubai, a distance of 5,133 kilometres, which is also the second longest scheduled 737 route in the world.

Long-haul operations[edit]

Main article: Norwegian Long Haul

Norwegian started long-haul flights on 30 May 2013.[27] The first scheduled flights are from Oslo and Stockholm to New York City and Bangkok, originally with wet-leased A340-300 aircraft while the airline awaited delivery of the new Boeing 787 Dreamliner aircraft. In March 2013 Norwegian Air Shuttle confirmed a new long haul route from Copenhagen, Oslo and Stockholm to Fort Lauderdale, beginning on 29 November 2013.[28] Norwegian has also (in September 2013) announced flights Stockholm to Oakland and Los Angeles beginning May 2014, and also Copenhagen-Los Angeles, Copenhagen-New York, Oslo-Oakland, Oslo-Los Angeles, Oslo-Orlando and Bergen-New York (JFK)

Norwegian Long Haul will also fly from London Gatwick to New York (JFK), Fort Lauderdale and Los Angeles from Summer 2014.

Domestic network[edit]

Norwegian operates an extensive domestic network within Norway, Sweden, Denmark and Finland.

For topographic and demographic reasons, the domestic market in Norway is one of the largest air travel markets in the Nordic region, and is also significant in European terms. The destinations served by Norwegian are generally divided by mountain ranges, unsheltered plains and fjords. Road and railroad networks are scant because of rather unwelcoming geographical conditions, and connections are unpredictable due to weather during mid-winter. Combined with vast distances, air travel is by far the most efficient mode of transportation.

The Finnish and Swedish domestic markets are to a large extent characterized by similar properties to that of the Norwegian domestic market, however rail is a large competitor on medium distances. Distances within Denmark are generally short and the landscape flat, but the country is divided by water making the longest rail and road distances long and thus air transportation efficient on some destinations. Denmark, Finland, Sweden is characterized by a large proportion business travelers on domestic air planes (since private travelers prefer cheaper trains and cars) except for the farthest destinations.

International network[edit]

Intra-Scandinavian routes, and in particular “the capital triangle” between Oslo, Stockholm and Copenhagen, is attractive due to extensive traffic both of business and leisure travellers. Other modes of transportation are generally inefficient and slow between these cities.[citation needed]

Scandinavia’s geographical placing in the far north corner of Europe also makes air travel the most efficient mode of transportation to continental Europe. Traffic to continental Europe is further enhanced by the demographics in the Scandinavian market, with considerable international trade and an extensive tradition for leisure travel.

Norwegian Short Haul Fleet[edit]

As of October 2014, Norwegian Air Shuttle's fleet consists of the following aircraft:[29][30][31]

A Boeing 737-800
Norwegian Air Shuttle fleet
Aircraft In Service Orders Options Passengers Notes
M Y Total
Airbus A320neo 100 50 0 180 180 EIS: 2016
Boeing 737-300 8 0 148 148 Exiting service. 5 owned, 3 leased. Leased aircraft phased out by Autumn 2014
Boeing 737-800 83 50 6 0 186
189
186
189
46 own orders remaining + 4 more leases. 41 planes owned, 42 planes leased.[31][32]
Boeing 737 MAX 8 100 100 0 189 189 EIS: 2017
Total 91 250 156

The −800s are equipped with winglets and CFM 56-7B26 engines. All −800s have a longer range than the −300, allowing 2,400 nautical miles (4,400 km; 2,800 mi). They are the only craft used to the Middle East, Africa and the Canary Islands; otherwise both types are used throughout the network, plus all domestic services in Sweden.[33] In 2012, Norwegian Air Shuttle received 13 new Boeing 737-800s. For 2013 and 2014 the corresponding figures are 14, and 11, respectively.[34]

Norwegian's aircraft livery is white with a signal red nose. The vertical fins of the aircraft in Norwegian's fleet feature depictions of historically significant Norwegians, Swedes, Danes and Finns.[35] Norwegian has also operated a single aircraft in a special promotional livery for the insurance company Silver.[36]

Norwegian Long Haul Fleet[edit]

Norwegian Long Haul Boeing 787 on approach to Gatwick Airport in July 2013

As of June 2014 Norwegian Long Haul's fleet consist of the following aircraft:[37]

Norwegian Long Haul fleet
Aircraft In Service Orders Options Passengers Notes
M Y Total
Boeing 787-8 7 1 32 259 291 EI-LNA and EI-LNB are leased from DP Aircraft,[38] EI-LNC and EI-LNE are owned through DY7 Aviation Ireland Limited [32][39] EI-LND, EI-LNF and EI-LNG are leased from Wilmington Trust (Dublin) + 1 more owned aircraft to be delivered in 2015.
Boeing 787-9[40] 0 9 Will be leased from MG Aviation and ILFC. Entry into service in Q1 2016 - 2018 [41][42]
Total 7 10

For more information on Norwegian Long Haul operations, go to Norwegian Long Haul

Historical fleet[edit]

From 1993 to 2002, the company solely operated Fokker F-50 turbo-prop aircraft primarily as a commuter airline, having a total fleet of six in 2002. The company ceased all F-50 operations at the end of 2003 in order to focus on the Boeing 737-300 jet operations and sold the last three of the Fokker F-50 in early 2004. For a limited period in the early years of the 737 operation Norwegian operated a 737-500 as an interim solution while waiting for 737-300 deliveries. Following the acquisition of Swedish low cost airline FlyNordic in 2007, Norwegian inherited eight MD-80 aircraft. The last of the MD-80 aircraft was phased out two years later.

Norwegian Air Shuttle historic fleet
Aircraft Total Introduced Retired Ref
Boeing 737-500 1 2002 2003 [33][43]
Fokker 50 7 1992 2004 [33][44]
McDonnell Douglas MD-82 5 2008 2009 [33][45]
McDonnell Douglas MD-83 3 2008 2009 [33][45]

Operations and services[edit]

Boeing 737-800 interior

All flight operations are performed under one single air operator's certificate (AOC) (ICAO airline designator NAX). The Group also held one Swedish AOC (ICAO airline designator NDC) up until 2009, but the double AOC operation was discontinued for efficiency purposes.[citation needed] The main technical base is at Stavanger, although heavy maintenance (C/D checks) and engine maintenance are put out on tender.[citation needed] Norwegian purchases all aircraft ground handling from a third party; in Norway, Aviator Airport Alliance, former Norport Handling and Røros Flyservice.[citation needed]

Norwegian, as a low-cost airline, operates aircraft with all-economy class seating. Surcharges are taken for on-board food and drinks, check-in baggage, payment by credit card and other non-core services.[46]

The airline runs two frequent flyer programs: Norwegian Reward is for travellers, who earn cash point based on a percent of cash paid for tickets and the ticket class (10% on full fares, 2% on discounted fares). Corporate Reward allows companies to redeem cash points on a similar basis. Norwegian supported the ban on point accrual that was in force on Norwegian domestic flights until 16 May 2013, but when that ban was lifted, the reward programs were extended to that market as well.[47]

Norwegian also offers free WiFi in its 737-800 fleet.[48]

Awards[edit]

In 2009, Norwegian CEO Bjørn Kjos received the annual leadership's prize "Kunsten å lede" from Manpower Inc. and HR Norge.[49] Kjos was also awarded the Ernst & Young Entrepreneur of the Year Award for Norway in 2009.[50]

Norwegian was awarded best European low-cost airline and fourth world wide in 2014 by AirlineRatings.com. In 2013 Norwegian was voted best low cost airline in Europe by Skytrax.[51][52]

  • 2014 Best in Region: Europe - Awarded by Apex Passenger Choice Awards [53] [54]
  • 2014 Best in Inflight Connectivity & Communications - Awarded by Apex Passenger Choice Awards [55] [56]
  • 2014 Best Single Achievement in Passenger Experience for its moving map on the 787 Dreamliners - Awarded by Apex Passenger Choice Awards [57] [58]
  • 2014 Europe’s best low-cost carrier of the year awarded by Skytrax World Airline Awards [59][60]
  • 2014 Named Biggest "‘new’ airline in the US market" by 4th US ANNIEs – Airline Awards of Anna.aero[61]
  • 2014 Voted “Best Low-Cost Airline of the World” by the 2014 Air Transport News Awards [62]
  • 2013 Europe’s best low-cost carrier of the year awarded by Skytrax World Airline Awards [63]
  • 2013 Best Inflight Connectivity and Communications awarded by Apex Passenger Choice Awards [64]
  • 2012 Best Inflight Connectivity and Communications awarded by Apex Passenger Choice Awards [64]
  • 2012 Second Best Low-Cost Airline in Europe awarded by Skytrax during the World Airline Awards 2012 [65]
  • 2009 Norwegian named “Market Leader of the Year” by Air Transport World (ATW)
  • 2008 Norwegian named the best low-cost carrier in Northern Europe by Skytrax
  • 2008 Norwegian was awarded a prize for being the best Norwegian company in terms of public reputation, and for having the best management of all companies in Norway.

Marketing strategies related criticism[edit]

On April 12, 2011, Norway's largest newspaper Aftenposten revealed employees from Norwegian's marketing company Vizeum, had criticized Norwegian's main Scandinavian competitor, Scandinavian Airlines, using ordinary personal Facebook accounts to write criticism on the competitor's site. The Facebook "like" function was also used among the employees of the company on comments with critical content. Vizeum apologized to Scandinavian Airlines for the event, but Norwegian Air Shuttle refused, as they claimed this was due to personal opinions from Vizeum's employees.[66]

Labour related criticism[edit]

Between 2011 and 2013, Norwegian Air Shuttle (NAS) has received harsh criticism regarding its treatment of employees. The media first reported NAS's announced intention to open a base in Helsinki, from where it hired pilots on short-term contracts (in Estonia) rather than as employees within the company. The Norwegian tax-office authorities suspected in August 2012 that many Norwegian citizens were working for NAS on these contracts and not paying Norwegian taxes despite operating on flights originating from Norway.[67][68]

The Norwegian Pilot's Union (NPU) brought NAS to court over the short-term contracts. NAS CEO Bjørn Kjos only inflamed matters when he declared that NAS would no longer hire employees on Norwegian terms.[69][70]

In the fall of 2012, NAS started to use contract-employed pilots on routes within Scandinavia, which was considered by the NPU to be an abrogation of labor terms regarding non-Scandinavian pilots on routes within Scandinavia. NPU soon after sued NAS.[71]

In October 2013, the NPU announced their intention to strike as NAS forced its pilots to face dismissal or transfer to Norwegian Air Norway or Norwegian Air Resources AB, both subsidiaries of NAS. The respective subsidiary would then lease the pilots back to NAS. NPU and their Swedish counterpart SPF accused NAS of using this ploy to break the solidarity and organization of the pilots, with the eventual goal of co-ercing pilots to converting their jobs to contract positions.[72][73]

In mid-December, NAS faced its Swedish non-contract flight-attendants with either dismissal or transference to Proffice Aviation, an external staffing company. According to the Swedish cabin-crew union, Unionen, it managed to save the jobs of 53 NAS employees, but it was dissatisfied with the direction NAS had taken. The situation led to the leader for the Swedish Left Party, Jonas Sjöstedt, to state that stricter regulation is needed for the use of staffing-companies in Sweden.[74]

Norwegian Long Haul[edit]

Main article: Norwegian Long Haul

Norwegian has also received criticism for the terms of its contracts with its long-haul flight-attendants, who are on contracts based in Thailand.[75] This has caused the Air Line Pilots Association to further accuse Norwegian of unfair competition practices.

The airline contests these accusations and has disclosed the pay scale for its Thai employees whom earn between USD 33,300 and USD 39,200 per year which is on par with the average pay for US flight attendants (though these comparisons are made between solely intercontinental Norwegian Long Haul flights versus domestic and intercontinental flights of US paid flight attendants).[76][77]

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External links[edit]