Skift Take

It's true that competition is tough in London, so it makes sense Norwegian is reducing its short-haul flights. But the trans-Atlantic sector is also hotly contested, and Norwegian may eventually find the same troubles on long-haul routes.

Norwegian Air Shuttle ASA plans to scale back short-haul operations at London Gatwick airport as competition weighs on prices, freeing up scarce operating slots for new trans-Atlantic routes.

The discount carrier may trim intra-European services at its U.K. hub as soon as next winter and add U.S. flights using its fleet of Boeing Co.’s 787 wide-body jets, spokesman Lasse Sandaker-Nielsen said.

“We’re always looking at profitability, and it’s no secret that competition at Gatwick is pretty fierce,” he said. “If you have routes that are performing poorly it’s much better business to discontinue them and use the slots for a bigger operation where the competition is not so great.”

Norwegian Air is reviewing its network as a capacity splurge among European carriers coincides with a dip in demand following a spate of terrorist attacks. As the U.K.’s top leisure hub Gatwick is particularly exposed, and the airline forecasts prices will fall further as the pound’s slump after the Brexit vote pares Britons’ spending power.

Norwegian Air currently operates 36 long- and short-haul routes out of Gatwick and serves eight U.S. cities, Las Vegas and New York among them, providing competition for carriers including Virgin Atlantic Airways Ltd. and the British Airways arm of IAG SA. In total, the U.K. contributed 4.5 million of the group’s 29.3 million passengers last year.

A deal with Ryanair Holdings Plc should see the Irish carrier feed passengers from five cities in the U.K. and Ireland onto Norwegian’s long-haul Gatwick flights starting in September. Baggage will be transferred automatically, though there must be three hours between arriving and departing flights to prevent delays, Ryanair Chief Marketing Officer Kenny Jacobs said last week.

Norwegian Air has ruled out extending the deal to routes on which its own discount flights compete with Ryanair, Sandaker-Nielsen said.

To contact the reporter on this story: Benjamin Katz in London at [email protected]

To contact the editors responsible for this story: Chris Reiter at [email protected], Christopher Jasper, Tom Lavell

©2017 Bloomberg L.P.

This article was written by Benjamin Katz from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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Tags: London Gatwick, low-cost carriers, norwegian air

Photo credit: A Norwegian Air Boeing 737 taxis at London Gatwick. Norwegian is reducing its short-haul operation at the airport. Andrew Thomas / Flickr

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