Norwegian announced it will no longer operate long haul flights. For years Norwegian has tried to conquer the transatlantic market by trying to develop a low cost long haul model. Other companies like WOW Air and Primera went bankrupt trying to successfully operate low cost long haul airlines. Why is it so hard to copy the Ryanair-model to transatlantic flights?
Text by Nico
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For years we’ve seen a ‘quest for the Holy Grail’ when it comes to airlines trying to develop low cost long haul airlines. On short and medium haul trips, low cost airlines have overtaken classic carriers. Why doesn’t that model work for long flights?
Let’s start by taking a look at the success of low cost airlines on short routes.
Why long haul airlines work on short routes
In Europe Ryanair and Easyjet are the most well-known low cost airlines. But the original founder of the low cost model we know today is actually Southwest Airlines in the US. Off course low cost airlines try to save money on everything, but Southwest discovered the most important cash cow: time.
Back in the days, planes used to stand on the ground for at least an hour between flights. Southwest successfully reduced that time on the ground and Ryanair perfected that model. Their planes are on the ground for only 25 minutes between flights.
If you can’t bring checked luggage for free on a low cost flight, that’s not just to save money on baggage handlers, but more importantly to save time. If you don’t get a free snack during the flight, that’s not just to save money on peanuts, but also to save time because you don’t need a catering truck before or after every flight. If the aircraft is not cleaned between two flights, that’s not only to save money on cleaning teams but also to save time.
The shorter you stand on the ground, the more flights you can operate on one day. The more flights you operate, the more tickets you can sell. The more tickets you sell, the more money you make even when your tickets are cheaper.
This success can’t be copied and pasted to long haul flights
The biggest costs when operating a long haul flight are fuel and crew. Low cost airlines typically don’t do nightstops: crew always start and end their day at the same airport so the airline doesn’t need to pay a hotel and a night allowance. When operating long haul flights, you can’t just send the crew back straight away. You could spare some coins by selecting cheaper hotels than your competitors, but that wouldn’t make the big difference.
Same goes for fuel: you could try to save some fuel by not accepting checked luggage, or try to split the costs between more passengers by offering less space. But at the end of the day, that doesn’t make enough difference to make these flights much cheaper.
What makes long haul flights profitable?
The economy passenger in the back of the plane is not the passenger that makes a long haul flight profitable. It’s the premium traveller, who is willing to pay more for extra service.
In 2019 Lufthansa revealed that their premium economy class was the most profitable class at that moment: bringing 33% more revenue than classic economy class, and 6% more than business class. So even though premium passengers have more space than economy passengers, they still bring more revenue at the end of the day.
Norwegian didn’t offer business class at all, just like their former rivals WOW Air and Primera Air. Eurowings, the low cost airlines of Lufthansa, started with all economy long haul operations, but decided later to install business class.
So basically there are two main problems when operating low-cost long haul flights: airlines didn’t find a way (yet) to make these flights much cheaper and to operate more profitable.
Are passengers willing to pay less and have (much) less comfort?
On a flight from Brussels to Berlin you might not care about leg space, the flight is only one hour anyway. You might not care about getting a drink or a snack. For just a short city trip you might not need luggage. But would you feel the same when we’re talking about a 8 hour flight from Brussels to New York?
The answer is yes. Norwegian, WOW Air and Primera didn’t have any trouble at all filling their planes. If the price is right, apparently we don’t care about our comfort, even on long flights. WOW Air reported a load factor of 88% before going bankrupt, for example.
Nobody has found out yet how to operate long haul flights in a way that they would be fundamentally cheaper and profitable. With long flight times and both the fuel and crew costs that come along with that, airlines find it hard to reduce costs. And with premium passengers being the most lucrative on long haul flights, it’s yet to be discovered how to make a decent income with only cheap tickets. But the passengers will come as soon as the first airline solves the enigma.