One aircraft departs and another is landing on an international airport.

Why It Took Decades To Have $70 Flights Between Europe and North America

All of a sudden Norwegian Airlines announced in end-2016 they can fly for some $200 to North America and transport passengers from North America to Europe for just above $80. A month later WOW, an Iceland-based airline, matched their offer announcing they can fly from North America to Europe, Iceland in particular, for $69. Where are the $1,000 flights and why it took so long for air carriers to start offering affordable transportation between the Old continent and North America?

In end-2016, Bjørn Kjos, Chief Executive Officer of Norwegian Air said the company would soon fly for $69 to Europe. The air fare from Europe to North America would be double that price but still much more affordable than existing air tickets that could sell for up to $1,000 and over for a one-way ticket. According to him, average prices can go down to $300 for a round trip ticket in the near future, or later in 2017. Currently, Norwegian Air charges over $500 for a round trip.

How Is That Possible for Norwegian Air?

One of the leading budget airlines in Europe is targeting U.S. airports currently do not offer international flights, thus hoping to significantly reduce their airport expenses. Such airports are New York’s Westchester County Airport and Connecticut’s Bradley International Airport, just north of Hartford. Their air fleet will fly to Edinburgh in Scotland and Bergen, Norway, which in turn are also cheaper airports compared to larger European airports.

Global Annual Growth of Air Traffic Passenger Demand, 2005 to 2017

A chart showing global air traffic passenger demand between 2005 and 2017.
Global air traffic passenger demand. Source: Statista

Norwegian will operate the smaller 737 MAX jets from Boeing Co., which allows to them to make direct cross-Atlantic flights to smaller cities both in the U.S. and Western Europe. A possible obstacle is the lack of customs stations at U.S. regional airports, but Kjos is hopeful that such stations to handle international passenger traffic can be opened within a short period, following some negotiations.

Wow Air Matches the Norwegian Offer

Another low-cost airline, Iceland’s Wow Air, is ready to match Norwegian Air’s offer, providing one-way fares between Boston and Paris for $99. WOW also offer a limited offer for $69.99 tickets from Los Angeles International Airport (LAX) and San Francisco International Airport (SFO) to Stockholm (ARN), Copenhagen (CPH), Bristol (BRS) and Edinburgh (EDI). The offer is valid until April 5, 2017 but most probably the price range after that date will be insignificantly higher.

Annual change in passenger yield of world commercial airlines, 2005 to 2017

Year-on-year change in passenger yield of commercial airlines worldwide from 2005 to 2017.
Annual growth in passenger yield of commercial airlines worldwide. Passenger yield measures the average fare paid by departing passenger per revenue passenger mile and is used to estimate changes in fares over a specific time period. Source: Statista

Skúli Mogensen, founder and CEO of WOW, boasted 130-percent growth of their total passenger numbers, which stood at 1,668,773 total passengers in 2016. WOW airline does not offer on-board meals or water and Skúli Mogensen urges his customers to get their own meals and water during trans-Atlantic flights. This, combined will newer Airbus aircraft that the company operates and which are more fuel-efficient, allows the company to compete on equal terms with budget air carriers like Norwegian Air.

Why It Took So Long to Have Cheap Cross-Atlantic Flights, Really

Mainly because of the aviation industry being developed as a wing of the hospitality industry. A bunch of stewardesses, two or three meals during the flight, non-direct flights offered by most of the carriers made the price of an air travel ticket sometimes overwhelming for the average passenger. We also have more fuel-efficient aircraft now, which allows to markedly reduce the operational costs associated with flying between Europe and North America.

A number of ambitious airlines like WOW and Norwegian, which have lower operational expenses and do not rely on exceptional and largely useless on-board service like serving exotic meals, etc., are disrupting the industry including through moving their operations to airports nobody considered important in terms of international service just a couple of years ago. Most established airlines have their base airports in large metropolitan areas like New York, Saint Luis, Los Angeles, Frankfurt, London, and Paris while smaller cities can provide the same international service for fraction of the cost, including transfer to the nearby big city.

This is the start of an amazing transformation of the air passenger transportation that will drive the air fares to the required minimum without sacrificing air flight security or other important indicators like transportation speed. Well, some of these flights may arrive or depart in unusual hours but who set a standard what is the usual hour to fly to Europe and North America. Overall, these low cost air carriers will contribute for development of a much affordable trans-Atlantic service similar to the cheap flights that are already available between most of the larger European cities and many large cities in North America.

 

 

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