Game changer? £300 to New York from Gatwick on a Norwegian 787

The new generation of fuel efficient airlines, driven by the Boeing 787 ‘Dreamliner’, was meant to open up new possibilities for low-cost airlines to operate on long-haul routes. We haven’t seen much proof of it so far, until yesterday.

Norwegian, the, erm, Norwegian budget airline, has announced three new routes from London Gatwick to the US.

Norwegian

New York will cost from £149 each way

Fort Lauderdale will cost from £179 each way

Los Angeles will cost from £199 each way

Services start in July 2014, using Boeing 787’s.

Norwegian will, of course, charge you for ‘extras’. A checked bag will be £20, food and drink is chargeable, seat reservations will be chargeable. (There is a ‘set menu’ of one bag, breakfast, dinner and seat allocation available at £30 each way, which seems reasonable.)

Importantly, tickets are available at these prices. At the time of writing (3pm Thursday), EVERY flight to New York in August 2014 is available at £149 each way. (You can buy one-way tickets as well, if you want to mix and match with an Avios or Virgin Flying Club redemption the other way, perhaps coming home overnight on a flat bed.)

Don’t forget that a ‘free’ flight on Avios in economy to New York next August will cost you 40,000 Avios plus £359 in taxes and charges …. compared to £300 cash on Norwegian.

(On the other hand, a BA Silver flying to Los Angeles on a cash ticket would be earning around 20,000 Avios if they flew BA. Throw in lounge access, free catering, free seat reservation etc and BA may still look like better value even if it cost £200 more.)

It remains to be seen how sustainable this model will be long-term. Even with a 787, you can’t make money on a 6 hour flight selling every seat at £300 return, especially given UK Air Passenger Duty. It will be interesting to see how BA and Virgin respond, though.

One hint on future pricing comes from the ‘premium’ cabin on these flights, which will offer a 46 inch seat pitch. This is far less attractive in terms of pricing compared to the competition – New York is coming out at £1,200 for instance. ‘Sale’ fares on legacy carriers from London in business class can occasionally be had for £1099 or a touch more. I can imagine those £300 return fares drifting nearer to £600 before you know it.

It is also worth noting that all three services – New York, Los Angeles and Fort Lauderdale – will be done using just one plane. You’d better hope there are no more B787 technical problems ….

Earn cheap Avios by finding very small cabbages (!)
600 Avios for £5 if you pre-order Destiny in Tesco ... or not?
About Head for Points

We help business and leisure travellers maximise their Avios, frequent flyer miles and hotel loyalty points. Visit every day for three new articles or sign up for our FREE emails via this page or the box to your right.

Comments

  1. Scarecrow says:

    When I was looking at FFL last night return flights had shot up to over £600. Still a bargain in school hols.

  2. erico1875 says:

    With just one plane, a 787 as well, they will be plagued with delays and cancellations.. GLOBESPAN were a profitable and reliable low cost airline until they started offering trans Atlantic. Before long their reputation was in tatters and they folded.

  3. I’m not particularly interested in using Norwegian, but as Raffles pointed out, it will be interesting to see how BA and Virgin respond. For this purpose alone, I’d like to see Norwegian do well, just to keep the others on their toes. A big challenge, nevertheless, for Norwegian.

  4. Also rather bizarrely, the per-person fare changes as soon as you go beyond one person in your booking

  5. I read that Norwegian 787 flights were operating at only 49% reliability, they had so many problems they grounded one and demanded Boei g fix it. Latest mishap is an 8×4′ panel falling off an Air India aircraft in flight. I think these will just be limitted availability and/or lauch fares. I suspect in reality fares will be comparable to promotional fares on full service carriers once all fees included. Like all LCC (possibly excepting Air Asia) they are probably hoping to attract sufficient custom from the less-savvy travel market that is easily mislead by slick advertising.

    • Indeed. BA could afford to give away economy seats to New York for free, with 48 to 72 people in Club paying £3,000 each return.

      The problem for Norwegian is that long haul flights are still booked via Expedia etc in the main and so people will be able to see the BA fare and compare it.

      BA’s short haul problem is that people go direct to easyjet.com and ryanair.com and don’t even bother comparing BA.

      • Agreed. I think if BA were smart they would lauch a whole new LCCesk website with all the usual propaganda and marketing to sell their shorthaul. There would be no need for new planes, livery or anything. Just use two different approaches to sell their existing product They fail to attract a whole market sector by not approaching it in the proper way.

        • Or they could set up their own LCC. And when they find that it was affecting their regular routes, they could sell it it easyJet.

          No, wait …

          • LOL or just go for a 5 cabin config and add a LCC section at the back of every plane following the PAL model. They could even promote one of the benefits as being statistically the safest seats onboard!

          • BA franchise Comair t/a British Airways do this (or something similar) in South Africa.

            Comair also operate an LCC, kulula.com with flight numbers consisting of 3 or 4 digits. 3-digit flight numbers are kulula-branded, 4-digit flight numbers are codeshares with BA!

            I understand that inflight service on the co-branded flights is the same, but only BA passengers earn and redeem miles.

            Seems to work in SA!

        • Lady London says:

          Excellent idea. As you say it just needs a front end and some publicity to direct people to the front end in the same way as ryanair and easyjet get their feed.

          I wish Norwegian every success. I just wish I could stop recalling Freddie Laker and what happened to his flights from Gatwick. I know Raffles survived his trip, but for the moment I refuse to step on a 787 Dreamliner anytime soon due to the extremely worrying reports of electrical problems. Otherwise I’m a huge fan of Boeing.

  6. Hold luggage, seat -selection and in-flight catering are not actually required! The costs for these should not be regarded as unavoidable ‘fees’ – unless you are so set in your flying habits that you can’t imagine life without them.

    As regards reliability, being an EU airline, Norwegian are bound by the tough EU directive which is proving a game-changer for the airline industry. The cost of automatic compensation for a serious delay is less than ensuring that a spare aircraft is available at short notice.

    The particular value I see is that one-ways are half the price of returns – a revolution in long haul dominated by antiquated fare practices. This makes that next repositioning cruise to/from the U.S. viable and for less than the taxes on an Avios redemption.

    • Doesnt seem to be incredibly cheap. I once flew bru-yyz-lga-ewr-bru with AC/SN for €352, all inc, no error fare, off season.

      • BA has done £299 to New York in the darkest dankest days of January not so long ago. But August is usually very expensive in economy (and cheap in Club World!).

      • That was then. I wonder what that would cost now.
        If you can get the <£300 fares now – and some are still available – they ARE cheap!

    • Dont put so much faith in tbe regs. The airlines will do the math. If its costing them too much they will find some extraordinary reason to avoid paying it. The majority of pax will get weary of the hassle. Despite the separate charging of luggage, meals etc I still suspect that after initial launch period the different between Norwegian and BA Virgin united etc will be low. I am also not happy at these smallish 787s hogging slots at already overcrowded airports. On high volume routes such as NYC and LA I think airlines should operate larger aircraft.

      • The 787 isn’t all that small. It is similar in size and floor space to the 777-200 or A330-300. Although initially marketed as a 767 replacement, it offers 777 floor space for less than 767 operating costs.

        • I thought the 7878 was only seating around 200, must have picked that up wrong someplace.

    • Are they bound by EU rules as Norway is not in the EU?

      • Norway, as part of the EEA, is bound by most EU rules (including this one). In fact I believe they are forced to implement something like 75% of EU law/regulation but as they are not part of the EU, get absolutely no say whatsoever in their creation.

        Though regardless, it’s about destinations not the nationality of the carrier. Any flight from London is covered.

        • The 787s are actually registered in Ireland and Norwegian now has an Irish AOC, so the long-haul in indeed an EU airline.
          An Irish airline, called Norwegian flying between LGW and the USA. Confused yet?

  7. I read somewhere it is obviously an introductory offer to launch Norwegian’s new routes from LGW to the US. After that prices will come back to more normal level. Normal prices will probably still be cheaper than BA and Virgin though…

    • BA and Virgin can crush it, though.

      New York may be viable at £500 per seat post price increase. The LA price is bonkers, though. It is almost twice as far as New York so twice the fuel burn, but they are charging only a modest premium. Meanwhile, BA is running A380s to LA with plenty of business class seats to subsidise cheap economy ones.

      Quick Google search shows that the fuel cost of a 787 is $24 per nautical mile. London to LA is 9500 nautical miles return. Roughly, you are looking at $200,000 of fuel per return trip.

      Lease cost of a 787 is $1.2m per month, possible more to Norwegian as they are not blue chip. That is another $60,000 for a 1.5 day return flight.

      We are at $250k / £150k before any other costs. 291 seats on the plane. Just to cover fuel and plane lease costs, you need to charge £250 return BEFORE taxes, so around £375. And that assumes 100 per cent occupancy and before staff, insurance, marketing and hundreds of other costs.

      • Staggering figures there Raffles. Just shows how tough the long-haul market is. Loads are going to have to be at or near 100% for this to have any hope of surviving. I don’t see why BA/AA, VS/DL and the LH family/UA would not dump cheap seats into LAX, JFK and MIA next summer. If this doesn’t kill them sustained pressure over the winter might. Not only do the network carriers have the F and J market to help cover costs, they have connecting traffic, which may help.
        The Norwegian fares look good and their service is regarded highly by those who have experienced it. I had hoped their premium cabin would be significantly cheaper than current prices. I felt that’s where they could have a real influence over the market. A glut of cheap Y seats with an overpriced premium Y is hardly revolutionary.
        EasyJet and Ryanair have been flying around Europe for well over a decade, Ryanair over two decades! Your figures demonstrate why, despite the talk, they haven’t ordered 50 787s each. You just can’t fly people across an ocean for £50 each. Someone has tried it every decade, all have ended up as footnotes in history.

      • mrtibbs1999 says:

        Great analysis Raffles. Would The numbers work from the republic or Belfast with 0 APD?

  8. Quark999 says:

    Yesterday evening, I managed to book one of these amazing deals to LAX on the inaugural flight on the 2nd of July (which I hope they will make sure somehow limbs off the runway), and returning on the 20th. I paid £438 return, which includes food, bag and importantly exit row seats in both directions.

    I know that this offer can’t last, and prices for the same combination are already up to £568 today. But I do think I got quite a bargain by booking early, and I have to say the charges (credit card surcharge of £4) are clearly laid out and not nearly as annoying as with Ryanair. Judging from my experience with Air Asia X, I actually prefer paying for drinks, but then also getting them exactly when I want them. I even got around 4£ in “CashPoints” for my booking. The only slight hiccup in the process was the fact that the website didn’t accept my UK postcode, as postcodes with letters in them are obviously the work of the devil…

  9. Fascinated to see where this goes. I flew Norwegian to DBV earlier this year and the experience was brilliant. Great service, lovely planes, free on-board wifi and nice map-on-your-iPad service. I’d say a better level of service than BA..! (less the food/drink etc.)

    • Sideysid says:

      I just came back from Arrecife yesterday with Norwegian. Whole heartedly agree with your points. Recaro seats too. :)

  10. Just an FYI the fares released to and bookable through agents on these include

    “ADVANCE SEAT
    RESERVATION / MEAL SERVICE ONBOARD /
    2 X 20 KG CHECKED BAG. “

  11. erico1875 says:

    Apart from these proposed flights, are there no other DIRECT flights between LGW and New York?