Lufthansa to buy Norwegian?, India’s Vistara to add international destinations, Air Belgium planning US flights, new sleeping facilities at Abu Dhabi airport
– Lufthansa is considering a bid for Norwegian as the cash crunch gets worse for the airline
Norwegian posted a NOK2.2 billion ($269 million) operating loss in the first quarter equivalent to a minus 31% operating margin. The growing losses come as the airline expanded capacity by 36% in the same period, mainly on its transatlantic long-haul network.
Some believe the current course is no longer sustainable. “The original plan is unattainable, restructuring unavoidable,” Bernstein Research airline analyst Daniel Roeska said. He expects Norwegian to reduce its growth ambitions substantially.
The carrier has orders in place for 95 Airbus A320neo family aircraft, 110 Boeing 737 MAX and 16 787s. Seven MAXs and nine 787s have been delivered. The airline also has a substantial fleet of leased 787s.
Roeska also argues that “long-haul, low-cost is not working for Norwegian. A dilutive mix-shift between short- and long-haul flying is causing operational performance to deteriorate significantly.” He estimates the airline faces an operating loss of up to NOK8.2 billion ($1 billion) over the next three years. Roeska believes Norwegian is losing up to $29,000 per long-haul flight because of weak yields, lack of feeder traffic and business traveler demand.
Norwegian would be a good fit for Lufthansa as Norwegian’s hubs and mini-hubs are outside Central Europe (where Lufthansa dominates). Norwegian’s huge list of active airplane orders are like gold for Eurowings which could grow much further with more planes and let’s face it the Norwegian brand is more sexy than Eurowings.
– Singapore Airlines’ offshoot in India – Vistara – is now planning international service from India
Government sources told India’s Business Standard that Vistara has already filed an application for slots at Delhi Int’l airport for flights to Colombo Int’l (Sri Lanka), Bangkok Suvarnabhumi (Thailand), and Malé (Maldvies) starting this 2018/19 winter season. The full-service carrier may also run Kolkata Int’l-Bangkok flights.
Vistara currently operates thirteen A320ceo and eight A320neo on scheduled flights spanning 22 destinations across India. Ahead of its international expansion, it has been linked to an order with Boeing (BOE, Chicago O’Hare) for up to ten widebody jets. According to Bloomberg, the order entails six firm B787s with options for a further four. The aircraft will allow Vistara to start flights to Europe and North America. At the same time, the report said the airline was also negotiating with Airbus (AIB, Toulouse Blagnac) for an order of up to sixty A320neo which would be used to boost both domestic and regional coverage.
– Air Belgium (which just started Hong Kong flights to Brussels) is planning service to the US
This would be departure from their original business model that was focused on Chinese inbound traffic to Europe. The airline needs to work out how to uniquely position themselves in Europe’s hyper-competitive aviation environment and how to generate enough feed for their long haul jets. Both are tricky projects (as Etihad has learned as well) and needs deep pockets.
– the Plaza Premium Lounge at Abu Dhabi airport has added sleeping rooms that can be booked at 6 hour minimum slots
Rates aren’t exactly super low but not leaving security can be a precious time saver.
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About the author: Torsten is a serial entrepreneur who started almost a dozen ventures on four continents. Torsten's love for travel has brought him to 130+ countries and travel with most of the world's airlines. You can reach Torsten at [email protected]
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