Norwegian retrenching to a bleak future
This is what happens when an international airline get a top chief that have no experience from managing an airline. No experience from any other parts than a bit of consulting. Just thinks its about selling a ticket plus whatever extra you can add onto the purchase.
You don't make a Low Fares airline by lowering prices. You make the basis for it by keeping your costs low. And a key part of that is the single type of plane. But you need to spend time in engineering and ops to understand why that is so important. Just 1 set of spares and 1 type of engineer for all the planes, just 1 type of pilot so you don't have to double up on simulators and standbys, and the ability to swap any plane in on any route depending on what is available on the day. Did the company bosses visit other airlines that has done before the type of company they wanted to be. O'Leary of Ryanair did do a study visit to Southwest before forming his vision.
If you want to play with the big boys and source from more than 1 manufacturer you need to be boss over more than 1 ops. This means 2 separate airlines so if you get the best deal from Airbus the planes goes to airline A. If next time the one that offers the best deal is Boeing the planes goes to airline B. If you cut the hand of one supplier you can be left in a bit of a pickle when it comes to arranging the next competition.
Company management obviously didn't do very groundbreaking work when it came to negotiating either. Soon Norwegian is the only airline that haven't come to a deal with Boeing regarding the ExMax delays. Many of its smaller shareholders where expecting a 100 million settlement and some cash into Norwegian's coffers. That is not happening now and where probably never going to happen since Boeing prefers to pave over its blemishes via future discounts. Giving it ultimatums just stinks of desperation and is an invite for Boeing to hold off on anything that can improve the liquidity of what looks more and more like a customer one can expect no more custom from anyway, and therefore are now just a distraction.
Maybe Norwegian can tap into the plane leasers orders of jets delivered in the future. Those lease companies are after all now their owners. But no airline have survived long term without obtaining the discounts available direct from the manufacturer source. Norwegian themselves cashed in many a time by selling the planes they got from Boeing directly to a leasing company at above discounted price on delivery.
Norwegian's future as anything other than a mediocre Scandinavian market airline now seems bleak. There is no clear path to future fleet renewals and growth. The current management have displayed no real sign of long term direction for the company. At best we can hope for a shadow of its former self that might not even create real competition to SAS in its home market but more kind of keeping it honest. Maybe just keeping the airline running until bonuses are harvested but without belief in flying in a green future.
The company is missing the ruthlessness of an experienced leading light that knows what he/she is doing and shows it.
You don't make a Low Fares airline by lowering prices. You make the basis for it by keeping your costs low. And a key part of that is the single type of plane. But you need to spend time in engineering and ops to understand why that is so important. Just 1 set of spares and 1 type of engineer for all the planes, just 1 type of pilot so you don't have to double up on simulators and standbys, and the ability to swap any plane in on any route depending on what is available on the day. Did the company bosses visit other airlines that has done before the type of company they wanted to be. O'Leary of Ryanair did do a study visit to Southwest before forming his vision.
If you want to play with the big boys and source from more than 1 manufacturer you need to be boss over more than 1 ops. This means 2 separate airlines so if you get the best deal from Airbus the planes goes to airline A. If next time the one that offers the best deal is Boeing the planes goes to airline B. If you cut the hand of one supplier you can be left in a bit of a pickle when it comes to arranging the next competition.
Company management obviously didn't do very groundbreaking work when it came to negotiating either. Soon Norwegian is the only airline that haven't come to a deal with Boeing regarding the ExMax delays. Many of its smaller shareholders where expecting a 100 million settlement and some cash into Norwegian's coffers. That is not happening now and where probably never going to happen since Boeing prefers to pave over its blemishes via future discounts. Giving it ultimatums just stinks of desperation and is an invite for Boeing to hold off on anything that can improve the liquidity of what looks more and more like a customer one can expect no more custom from anyway, and therefore are now just a distraction.
Maybe Norwegian can tap into the plane leasers orders of jets delivered in the future. Those lease companies are after all now their owners. But no airline have survived long term without obtaining the discounts available direct from the manufacturer source. Norwegian themselves cashed in many a time by selling the planes they got from Boeing directly to a leasing company at above discounted price on delivery.
Norwegian's future as anything other than a mediocre Scandinavian market airline now seems bleak. There is no clear path to future fleet renewals and growth. The current management have displayed no real sign of long term direction for the company. At best we can hope for a shadow of its former self that might not even create real competition to SAS in its home market but more kind of keeping it honest. Maybe just keeping the airline running until bonuses are harvested but without belief in flying in a green future.
The company is missing the ruthlessness of an experienced leading light that knows what he/she is doing and shows it.
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