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Contestable Markets: Norwegian Airlines takes on the Transatlantic Carriers

Geoff Riley

14th February 2018

This is a quite superb article for students wanting a great example of an increasingly contestable market - namely transatlantic travel. Can the fast-growing Norwegian Airlines achieve commercial sustainability in a battle against established rivals? They have just announced a hefty loss for 2017.

Having flown from Gatwick to Boston last year I can confirm that Norwegian's use of the Boeing 787 Dreamliner aircraft provides an economy experience that is a cut above what we have come to expect from flying EasyJet or RyanAir to the Med! Norwegian uses the standard tactics of flying into airports where landing and take-off slots are cheaper and obviously seeks to make as much ancillary revenue as they can from fees for checked-in baggage, seat reservations and on-board food and drink. Michael O'Leary, CEO of RyanAir has claimed that Norwegian will go bust - a case of hope over fear? 

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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