Saturday, 16 April 2016

US move promises cheap flights bonanza

Razzmatazz as Norwegian launches London-Boston flights

The remarkable rise of low cost carrier Norwegian has gathered fresh pace following an amber light from the US Government for trans-Atlantic flights by its Irish based subsidiary, Norwegian Air International. The move paves the way for a new surge in the growth of cheap travel between Europe and America. In the face of fierce opposition from pilots and other workers, the Department of Transportation has issued an order proposing to grant it a foreign air carrier permit. This should allow it to launch services from countries outside Norway, starting with flights between Cork in Ireland and Boston. Confusingly, its parent airline (Norwegian Air) already had permission to fly to American from London under the EU's air agreement with Washington. It flies long haul from Gatwick to destinations including Boston, New York and Los Angeles. But the US had been dragging its feet over approval of its plans for global expansion. The DoT said it couldn't find any legal grounds to bar Norwegian Air International. It has given opponents such as the US Airline Pilots Association three weeks to file objections. While the Icelandic airline WOW has been marketing cheap flights cleverly via its Reykjavik hub, Norwegian is attempting to succeed with non stop low cost services where many others have failed. The reason success has proved so elusive is that the amount of expenditure airlines can trim from their budgets diminishes as a proportion of total operating costs the further they fly. Norwegian's enthusiasm continues to raise the question why Ryanair, one of the major pioneers of cut price air travel, still hasn't joined the trans-Atlantic fray. Last year it appeared to have decided to take the plunge, only to deny that it had any plans to do so. There's little doubt that in the medium term, at least, consumers can expect a bonanza. And it won't just be a mushrooming of direct services. The more European airports that Norwegian adds, the more the potential for indirect deals. Following the US decision, Bjorn Kjos, CEO of Norwegian Group, said: "A final approval, based on the Open Skies Agreement between the U.S. and EU, will be win-win for consumers and the economy on both sides of the Atlantic. It will allow Norwegian to expand our USoperations. Our continued presence in the US will create thousands of jobs and generate tens of millions of dollars of economic activity for the Group’s US destinations,” The company said it intended 'to continue hiring hundreds of American based crew members. It noted that it had placed US$18.5 billions worth of orders for aircrafts from American manufacturer Boeing.

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