Airlines brace for more delays
July 20, 2012
Airlines serving Norwegian airports, especially the country’s main gateway at Gardermoen north of Oslo, were warning of another weekend of delays because of inadequate staffing among air traffic controllers. Norwegian Air is especially unhappy, after claiming it has lost millions on airport trouble in recent weeks.
Norwegian isn’t alone, and representatives of other airlines including Scandinavian (SAS) and Widerøe have had more meetings with top officials of Avinor, the state agency in charge of Norway’s airports and air traffic controllers, to register their complaints. Another meeting on Thursday, however, failed to ease their concerns, as Avinor admitted that short-staffing blamed on summer holidays would likely affect airline traffic once again.
Anne-Sissel Skånvik, communications director for Norwegian, was concerned on behalf of both the airlines and their passengers. She told Norwegian Broadcasting (NRK) that Norwegian was dissatisfied with Avinor, and that the prospect of more delays “is something we are very unhappy about.”
Many travelers and airline officials blame the ongoing delays and staffing problems on labour disputes between Avinor and the air traffic controllers, who narrowly averted a strike earlier this month. The trouble may ultimately prompt Norwegian politicians to follow through on calls to privatize Avinor and make air traffic control subject to competition. The monopoly situation they now have, argue many business leaders and frustrated airline officials, give them far too much power to disrupt air travel. Avinor’s boss, director Dag Falk-Petersen, is among those saying he welcomes competition, as does Skånvik.
Norwegian Air claimed that labour disputes at Norwegian airports cost the low-fare carrier around NOK 70 million in the second quarter. Norwegian reported sharp increases in passenger counts and profits last week but they were lower than analysts had expected and would have been much higher without the delays and cancellations suffered.
Norwegian, meanwhile, is moving forward with major fleet and route expansion plans that some analysts call “a huge risk” but which Norwegian boss Bjørn Kjos believes will fuel far more growth in the years to come.
The plans include entry into long-haul flights far from Norwegian’s original market within Norway and, later, its expanding route system around Europe. Norwegian is taking delivery of large new aircraft from Boeing, 787 Dreamliners, and using them to launch new scheduled service from Oslo and Stockholm to New York and Bangkok next year. More intercontinental routes are expected to follow.
Analysts warn of risks
Norwegian is also taking delivery of a fleet of smaller new Boeing jets, with Kjos bullish on the expansion. Analysts have been expressing concern.
“Norwegian has, in an impressive manner, achieved rapid growth in the European market. It’s a completely different challenge to succeed with long-distance routes to the US and Asia,” Danish analyst Ole Kirchert Christensen of Travelbroker told newspaper Aftenposten. “There’s an enormous risk and cost tied to such a move. If it goes bad, it could quickly ruin the positive image Kjos has created around Norwegian as a reliable airline that succeeds with everything it does.”
Analyst Ivar Andreas Lemmechen Gjul at Fondsfinans agrees. “Norwegian is on the offensive and their move into long-distance routes is exciting,” Gjul told Aftenposten, “but they trying something no one before them has managed to do.” He pointed to other low-fare carriers that tried to expand internationally, but didn’t succeed.
Norwegian officials remain undaunted. “This is about understanding the risk, and positioning (the airline) in the right way,” said Norwegian’s finance director Frode Foss. Norwegian officials claim to have studied others’ mistakes and Foss doesn’t appear worried, also noting that the airline is using brand-new jets that are “extremely cost-effective.”
“I wouldn’t say this is especially risky,” he told Aftenposten. “It’s improbable that the start-up will be a mistake.”
Views and News from Norway/Nina Berglund
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