Norwegian boss Bjorn Kjos shrugs off IAG’s low-cost, long-haul push as more transatlantic routes take off

 
Rebecca Smith
Low-cost challenger Norwegian has pushed on with its transatlantic focus (Source: Norwegian)

Bjorn Kjos’ colourful career has spanned stints as a lawyer, author and a fighter pilot, though he’s best known these days for his role as chief executive of Norwegian Air, the low-cost airline causing waves with its long-haul ambitions.

Recently, this has included low-priced transatlantic flights, costing from £69 for a no-frills, one-way ticket from the UK to New York. The carrier plumped for secondary airports as opposed to the likes of JFK and Newark to keep costs down, along with using a young fleet of fuel-efficient planes.

“I don’t think we do anything very differently,” Kjos says of the airline’s success. “I used to say the secret of low-cost, long-haul is there is no secret. It’s very much like on short-haul; you will not see any well-run low-cost operators with old airplanes.”

Still, the low-cost, long-haul venture has not proved the easiest nut to crack for airlines and Norwegian’s rise, now Europe’s third largest low-cost carrier, has not gone unnoticed.

In fact, British Airways owner IAG recently announced the launch of new Barcelona-based airline Level; a low-cost and long-haul competitor.

Read more: Norwegian launches Gatwick flights to Seattle and Denver from £199

Kjos is fairly circumspect on this development. He says competition is good for the industry, though does add wryly: “You can’t paint the aircraft and say ‘now we are a low-cost airline’.”

“There are a lot of things they have to do in order to create a low-cost airline. Willie Walsh is a smart guy so he might be able to do it,” Kjos says.

Norwegian is based at Gatwick in London, and its boss is adamant, “one runway is definitely not enough” when it comes to airport expansion.

Heathrow got the green light last October, but Kjos thinks if that is it for the foreseeable future, it will be bad news for both London’s airports (and the airlines using them), and also the capital’s tourism.

“You won’t get the tourists into London, they will fly to Paris, or they’ll fly to Rome or Barcelona or other places, because they can’t get access and you’ll have a limited amount of flights into London,” Kjos says.

Coming up on the calendar for Norwegian is its much discussed tie-up with Ryanair on feeder flights.

The partnership will allow passengers to book connecting flights on both airlines and allow them to compete with bigger airlines.

Kjos said the tie-up should be ready ahead of this summer, and is just dependent on IT niggles being ironed out.

Read more: UK government picks Norwegian as a preferred airline for business travel

He already has an eye on further collaboration in the future. “I think there are a lot of untapped markets and it’s very interesting for Ryanair, EasyJet and Norwegian.”

As for flying with airlines outside of his own, Kjos says with a smile: “Sometimes I have to!”

He is quick to add: “I try to fly on low fares, so normally Ryanair and EasyJet, and if I fly in the US I try to fly with JetBlue.”

Looking ahead, Kjos flags a couple of areas of potential turbulence.

“Having access. All governments have had a bad tendency, except for the British government which is very good in that respect, but other countries have a tendency to try and protect their old airlines that should have gone bankrupt years ago,” Kjos says. “That’s one thing and the other thing is terror.”

For now though, he has his sights set on bolstering Norwegian’s routes further.

“I’m looking forward to flying to lots of other continents, because I know that there are a lot of hidden areas on the globe,” Kjos says. “Like South America is a hidden jewel, but it is so expensive to fly to South America, and it’s even very expensive to fly within South America. So that will change.”

His prediction on the prospects of upcoming mergers and acquisitions within the airline industry is that it is a matter of when rather than if.

“You will see that the shop on the corner is disappearing sadly enough, and it is the large stores that survive. Airlines are just another sort of retail, in my opinion, airlines will have to grow bigger and bigger, because scale is vital in this industry as it is in any other consumer industry,” he says.

“A lot of airlines have merged without any great success; airlines are a complicated structure. However, I think a smaller airline, unless they are already in a niche area, will not be able to survive.”

Read more: Norwegian sets new budget flights to the US targeted at business travellers

As for a possible Norwegian merger, Kjos says he’d only be looking up. “We would never merge out of weakness,” he says. “If you ask me as a businessman, I would always say if I ever should merge it would be with an airline that’s at least as good as Norwegian.”

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