Contestable Markets: Norwegian Airlines takes on the Transatlantic Carriers
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?
A new breed of low-cost carriers such as Norwegian, Wow, and Primera are taking on the old guard such as British Airways and Air France-KLM in the skies above the Atlantic https://t.co/BHH6b2Z2Rj
— BBC Business (@BBCBusiness) February 14, 2018
Norwegian Air's results
— Simon Calder (@SimonCalder) February 15, 2018
One analyst says: "A fast expansion costs money. This is fine if done by a company with a solid balance sheet and enough cash reserves. Norwegian has neither"https://t.co/CCcet1WQY0
Thanks to all 8.1 million passengers who travelled with us fourth quarter. We are truly grateful! Where will you travel next? #Flynorwegian pic.twitter.com/hQuZCp3bFG
— Norwegian (@Fly_Norwegian) February 15, 2018
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Temporary Teacher of Mathematics
Frensham Heights School, Nr Farnham, Surrey
- Economics
- In the News
- Contestable Markets
- Transport economics
- Norwegian Airlines
- Business growth
- Business objectives
- Business finance
Geoff Riley
Geoff Riley FRSA has been teaching Economics for 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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