5 Essential Questions About IAG's New Transatlantic Low-Cost Airline

Travelers searching for transatlantic airfare deals this summer may see a new no-frills option — an airline called Level. It's one of two International Airlines Group responses to a threat from Norwegian Air, a discounter that in the past three years has delighted frugal travelers with transatlantic fares as low as $69, fees not included. Norwegian is big in several European countries, including France, Ireland, Norway, and Sweden, but of two of its biggest markets are the UK and Spain. International Airlines Group, or IAG, owns the biggest airlines in both countries — British Airways in the UK and Iberia in Spain — so it has more exposure to Norwegian than Lufthansa Group or Air France-KLM. To compete, IAG is trying two approaches. The first is at London Gatwick, where British Airways has added departures to New York JFK, Fort Lauderdale, and Oakland, all Norwegian markets. Onboard, British Airways offers its typical service, with free meals, but there's one caveat. On its Gatwick-based Boeing 777s, British Airways plans to add an extra seat per row. The approach will help British Airways lower its per-seat operating cost, allowing it to more closely match Norwegian's. In Spain, IAG's answer is Level, a new brand that starts in June with two Airbus A330s, outfitted with only economy and premium economy classes. At first, Level will fly four routes from Barcelona — to Los Angeles, Oakland, Buenos Aires, and Punta Cana, Dominican Republic. From L.A. and Oakland, Level will compete with Norwegian. "It is clearly designed to blunt Norwegian's impact," said John Kwoka, an economics professor at Northeastern University. "I think all of the major carriers are running if not scared, then very anxious, about Norwegian."