Norwegian Challenging Legacy Notions on Transatlantic Airfares

“Why should it cost twice as much to fly from New York to Europe than from New York to Seattle?”

This question was posed by Norwegian Air International CEO Asgeir Nyseth during the course of a nearly hour-long roundtable discussion with editors from ATW and Aviation Week. Nyseth was talking about NAI’s plans—assuming it gains US Department of Transportation clearance—to operate Boeing 787s and perhaps 737 MAXs on low fares, transatlantic flights. He said this is threatening to US and European legacy carriers accustomed to charging high prices for any ticket labeled “transatlantic.”

I did a cursory search online for roundtrip tickets between New York JFK and London Heathrow and between JFK and Seattle. In both instances, I sought flights leaving JFK on Nov. 7 and returning on Nov. 14. The result: nonstop flights on each route would be about the same duration—6 hours, 45 minutes to London and 6 hours, 30 minutes to Seattle. The cheapest roundtrip, economy-class ticket to Heathrow came in at $967, while the cheapest ticket to Seattle was priced at $336, a whopping 65% lower.

“The only thing that’s different is you have the sea under you,” Nyseth said.

Why the vast difference in prices? Nyseth argues that it is just a matter of legacy tradition that can now be made irrelevant by the super-efficient 787. “The 787 is the first and only aircraft you can do long-haul, low cost with,” he said.

Of course, a big part of it is customer expectation. Those flying across the pond expect meals, movies, blankets, etc., while those flying domestically in the US have come to expect little more than a seat and a soda. The legacy carriers also emphasize premium cabins on transatlantic flights and are in an arms race to provide the best business-class service between the US and Europe.

Norwegian currently has seven 787-8s and eventually plans to operate a fleet of 40-50 Dreamliners, a mix of -8s with 291 seats and -9s with 347 seats. Their 787s will be in an all-economy configuration with “premium economy” seats available—but no business class.

“We have no plan for business class,” Nyseth emphasized. Echoing what Spirit Airlines says about the US domestic market, Nyseth said Norwegian will attract passengers who previously bypassed transatlantic air travel because of cost. “We don’t take passengers from other airlines,” he said. “We create a new market.”

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