Many a moon ago the promise of wireless internet on board an airplane was viewed as the business travelers utopia. The was first the phone, then inflight entertainment modules for each passenger and now there is the ability to connect to the internet. While Norwegian Airlines is a somewhat Niche airline that does not make it to the top of the league tables by passenger volume it does have the claim to be the very first European airline offering internet onboard. This is not a business class feature but one for the non-business traveller. My hypothesis is that innovation such as this is exactly what is slowly killing off British Airways and other larger carriers which have become the proverbial air-borne Gorillas unable to leap on to new branches of innovation that are able to keep their growth numbers moving. I used to be a British Airways regular and quickly moved over to Norwegian for my weekly commute to Oslo once I discovered how I was able to stay connected on board what many consider to be a ‘discount carrier’. Norwegian is much more likely to be seen at Ballearic airports delivering cabin full Norwegian travelers to European holiday destinations however its ambitions seem far more serious.
In January 2012 Norwegian announced that it had placed orders for 100 Airbus A320neos, 100 Boeing 737 MAX 8 and 22 Boeing 737-800s aircraft. This was arguably one of the larger orders for the year and underlines the airlines growth ambitions. Currently owned by the listed company that has a total fleet size of 66 planes, Norwegian is yet to join any Alliance network. Perhaps its best if it stays this way as unlike a number of other brands they have chosen to create a loyalty programme that is also transparent, easy to understand as well as use. The cash points programme is driving greater stickiness with customers and is another example of how the innovation machine at the company seems to be hitting all the right buttons with passenger numbers increasing as new routes continue to be launched. One of the airlines regulatory challenges in its home market of Norway is not being able to offer the rewards programme which is only available at the time of writing on international routes.
SAS is the airline most likely to suffer as Norwegian continues to take market share, however British Airways is likely to also take a small hit on the chin with European customers now well in the grip of the recession and business looking for ways to lower costs embracing the airlines low cost and high efficiency service.
Insight: Norwegian airlines has a real opportunity to continue to build on their regional and international plans but should invest in a small dose of ‘English’ education for their staff as well as some accessible ‘content’ from mainstream international papers perhaps through digital channels.
New world travel patterns are somewhat discernable in the airlines choice of its longest route which takes passengers from one resource economy to another. Oslo to Dubai direct is Norwegian’s longest route.
One last observation is certainly worth noting in how the company is starting to leverage communications and working to cross sell other group products. The Norwegian Group consists of the parent company Norwegian Air Shuttle ASA, which also owns 100% of the telephone company Call Norwegian AS, 99.9% of NAS Asset Management, 100% of NAS Asset Management Norway AS and 20% of Norwegian Finans Holding ASA (Bank Norwegian AS). As of now passengers are able to purchase communications products to lower their calling costs.
Insight: A space to watch may be airlines following in the footsteps of mobile carriers with a growing focus on financial services revenue as ARPU started to fall. The ability for an airline to offer flight insurance and other travel related financial services perhaps even money exchange and remittances would be quite a feat to pull off should the regulators not strangle the idea first.
Please note that this is not paid for advertorial.