Norwegian Air

[Ray Finkle]

Two new USA routes expected to be announced today.

Hmmm.......

United had claimed the Belfast-Newark route was not profitable enough.

Weeks ago, Economy Minister Simon Hamilton told the assembly he had approved unspecified financial assistance for two new routes.

http://www.bbc.co.uk/news/uk-northern-ireland-39058236

 

[Jerry]

I thought the EU had stopped financial aid for the route? Be interesting to know how they got around it!

 

[jfy1999]

Schedule now announced on the Norwegian website.

Belfast – five transatlantic flights per week from £69:

Stewart Intl (New York) – 3x weekly flights (Tues, Thurs, Sat). Depart Belfast Intl at 16:20, arrive Stewart 19:05
Providence (greater Boston) – 2x weekly flights (Tues, Sat). Flights depart Belfast Intl at 15:45, arrive Providence 18:20

 

[Ray Finkle]

I thought the EU had stopped financial aid for the route? Be interesting to know how they got around it!

I thought so too. It'd be very interesting to know.

 

[TheLocalYokel]

I thought the EU had stopped financial aid for the route? Be interesting to know how they got around it!

Regarded as contravening EU state aid rules. It seems the NI Government thought this might be the case but gambled on getting it through. They lost that gamble. See below BBC linked report.

http://www.bbc.co.uk/news/uk-northern-ireland-37834823

 

[Jerry]

Regarded as contravening EU state aid rules. It seems the NI Government thought this might be the case but gambled on getting it through. They lost that gamble. See below BBC linked report.

http://www.bbc.co.uk/news/uk-northern-ireland-37834823

That's why I don't understand how they can give financial aid to Norwegian and it's ok but the deal with United isn't? I'm wondering what they've done different for this route.

 

[TheLocalYokel]

That's why I don't understand how they can give financial aid to Norwegian and it's ok but the deal with United isn't? I'm wondering what they've done different for this route.

The below is taken from an Opinion given by two QCs expert in commercial law.

Second, and very importantly in practice, the State aid rules do not apply to measures taken by the State that are equivalent to those that a rational private operator in the market would take (the “market economy operator principle” or “MEOP”)). Since it is accepted that, in most cases, rational private investors might take a range of views, the MEOP in practice allows a range of measures to be taken by Member States provided that they ensure that they have sufficient evidence that the measure is one that a rational private operator could realistically have taken.

In essence it's the scale of the state aid that will be considered. In the United case the European bureaucrats clearly decided that the £9 million (over three years) offered that airline by the Northern Ireland government to maintain the United BFS-EWR route was more than a rational private operator would have offered.

It has to be presumed that the NI government learned that lesson and its subsidy to Norwegian is less (than the United offer) and in line with what a rational private operator would offer.

When an airport is state-owned as with CWL a less clear situation can be argued but the principle remains the same.

It's an open secret that CWL has subsidised the Flybe operation. Again the presumption is that it is line with the DSA subsidy to the same airline and that Peel is a rational private operator.

Of course, a private company could act irrationally and offer a ridiculous sum to an airline as a subsidy but its directors would be responsible to their shareholders if their action was reckless and led to the company going out of business.

 

[Jerry]

I found this review about the new Norwegian Belfast to New York flight. Seems pretty positive.
https://theholidayninja.com/2017/07/20/ninja-verdict-belfast-to-new-york-with-norwegian/

 

[TheLocalYokel]

It's certainly an encouraging report. Using a small airport away from New York has its advantages.

Incidentally, I love the expression "....... so you should be grand!" Grand was in common use before the war in the middle and upper classes. It was the equivalent of today's 'awesome' which seems to be rolled out to describe anything a bit above the ordinary.

 

[Jerry]

It's certainly an encouraging report. Using a small airport away from New York has its advantages.

Incidentally, I love the expression "....... so you should be grand!" Grand was in common use before the war in the middle and upper classes. It was the equivalent of today's 'awesome' which seems to be rolled out to describe anything a bit above the ordinary.

Yes i suppose time will tell whether it's successful but like he/she says in the article the other choice is to head to Dublin or connect via the continent. This flight drops you out of the way yes but if you aren't bothered about it you have a 2 hour bus ride that drops you in Manhattan and it's cheaper.

 

[TheLocalYokel]

The Norwegian US routes to Newburgh (for New York) and Providence (for Boston) had poor loads in September according to a poster on another forum. The CAA stats apparently show 49% load factor on Newburgh and 39% load factor on Providence.

We don't know yields of course but at this level of seat occupancy they are not likely to be good. This sort of service to what are really tertiary airports in the USA might catch on but surely loads will have to be consistently higher than this.

It'll be a shame if these routes can't work from smaller UK airports, although at approaching 6 mppa BFS is not exactly a real tiddler, as it could be an imaginative way of linking them with the USA.

 

[Jerry]

Norwegian Air will axe there US routes from Belfast with the last flight on the 27th October.
The airport said it was disappointed and blamed the airlines limited and inferior flight schedule.
In a statement, a spokesperson said: "Regrettably the limited and inferior product offered by Norwegian was creating awareness within the market, but moronically channelling much greater levels of Northern Ireland passengers onto Dublin flights (where the airline were offering flexible two daily services, rather than the limited two weekly product from Belfast). Hardly a conducive outcome for Belfast and Northern Ireland economically or socially.

"It is an unsustainable situation that two million people in our catchment area should be left with no option but to undertake lengthy and unnecessary journeys to Dublin in order to fly across the Atlantic
"It is of greater concern at a time when vital direct access from critical markets for trade, investment and tourism is becoming increasingly focal that the lack of any economically-driven strategy to develop and sustain Northern Ireland air routes from essential markets is creating setbacks of this nature.
"The Northern Ireland – North America market remains strong. We will continue to work to ensure that partner airlines are encouraged to serve our market in an appropriate and sustainable manner."
https://www.google.co.uk/amp/s/www....s/norwegian-air-belfast-new-york-15194208.amp

 

[TheLocalYokel]

I take it that by 'inferior' they mean in comparison with the airline's Dublin programme and not inferior as an airline per se.

It's a relationsip that really seems to have soured.

 

[Jerry]

I take it that by 'inferior' they mean in comparison with the airline's Dublin programme and not inferior as an airline per se.

It's a relationsip that really seems to have soured.

I assume so as i'd imagine they wouldn't want to burn their bridges completley with Norwegian.
It's possible BFS may feel Norwegian didn't give the route enough time maybe? Also did Norwegian get any sort of 'support' from the Northern Irish government i wonder?

 

[Eoin]

I assume so as i'd imagine they wouldn't want to burn their bridges completley with Norwegian.
It's possible BFS may feel Norwegian didn't give the route enough time maybe? Also did Norwegian get any sort of 'support' from the Northern Irish government i wonder?

Was no government from the time the routes were announced to now so that'd be impossible.

 

[Aviador]

I take it that by 'inferior' they mean in comparison with the airline's Dublin programme and not inferior as an airline per se.

It's a relationsip that really seems to have soured.

I'd say it's unusual for an airport to make such a statement with the loss of a route. I'd actually say it's quite unprecedented. Usually you get a standard press release saying the route didnt get the support from business. The fact that they had to release such a statement sounds like Norwegian left a particular sour taste in their mouth.

 

[jfy1999]

I assume so as i'd imagine they wouldn't want to burn their bridges completley with Norwegian.

But it sounds like they are going to do just that...I've never heard an airport spokesperson call an airline "moronic"

 

[Jerry]

But it sounds like they are going to do just that...I've never heard an airport spokesperson call an airline "moronic"

Where did they call them moronic? I must have missed that bit!

 

[TheLocalYokel]

Where did they call them moronic? I must have missed that bit!

It's in the piece that you quoted, Jerry. Norwegian's actions were described as moronic.

 

[Jerry]

It's in the piece that you quoted, Jerry. Norwegian's actions were described as moronic.

Yep i missed that bit!