Norwegian took ‘all the aircraft’

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Norwegian Air’s Chief Executive Bjørn Kjos told a packed house at a student conference in Oslo this week that his company’s long haul operation was at least five years ahead of main rival Ryanair’s, because Norwegian has “taken all the aircraft.” Meanwhile, a court has decided an unfair dismissal case filed by a Norway-based Ryanair employee can be heard in the country.

Norwegian Air chief executive Bjørn Kjos says the airline will register its new aircraft in Ireland, in order to be able to hire Asian crews at Asian pay levels that will allow Norwegian to compete with Asian carriers. PHOTO: Norwegian Air

Norwegian Air chief executive Bjørn Kjos said this week his company was at least five years ahead of main low cost rival Ryanair when it comes to the long haul market, and that customers will “quickly forget” the teething problems Norwegian experienced establishing its intercontinental service. PHOTO: Norwegian Air

Bjørn Kjos told students at the BI Norwegian Business School’s (Handelshøyskolen BI) Business Week (Næringslivsdagene) that Norwegian Air had set itself up for the future by securing a large share of Boeing’s new 787 Dreamliners, and moving its long-haul operations to Ireland. “Those companies that have not positioned themselves for the future will not survive,” he said, reported newspaper DagensNæringsliv (DN). “So be my guest if you will fly with seven- to eight-year old aircraft, that is. It is neither possible to survive with old planes, nor Scandinavian cost levels.”

“I know Ryanair is just waiting to get underway with their long-distance efforts,” Kjos explained. “But we have taken all the planes – and I heard that when I asked (Ryanair CEO) Michael O’Leary how it’s going: ‘Bjørn, godammit, you’ve taken all the aircraft!’ he said. So far, he must just wait. So we have at least five years head start on him.”

Securing the Dreamliners was nevertheless a turbulent experience for Norwegian. Delays in delivering the first Dreamliners last year meant the planes weren’t ready when Norwegian was due to start its intercontinental operations last May. The company had to lease old aircraft to operate the routes, and when the Dreamliners finally arrived they were plagued with technical problems. A series of lengthy delays and cancellations followed, and a hit to Norwegian’s profits.

On Monday it was revealed the four new Dreamliners Norwegian is due to receive in spring could also be delayed, after cracks were found in the wings of 43 of the brand new, yet-to-be-delivered Boeing 787s. Kjos told the audience on Tuesday that the first delayed plane was expected. “If there are delays with the next three planes as well, there will probably be no other consequences than we’ll get a little less time to train the crew on flights in Europe first, before we put the planes on long distance.”

People quickly forget
Experts have been skeptical over low cost carriers’ readiness and ability to provide long haul flights, reported DN. Norwegian attracted major criticism and complaints after widespread delays and cancellations left hundreds of passengers stranded over Christmas and the New Year.

Kjos acknowledged the airline has made mistakes, but said the industry is about taking chances and understanding the risks. “Of course you will always get a reputation in the short term when such situations arise,” he said. “I understand people become frustrated, because people are supposed to get going, and it doesn’t matter who is to blame. That the delays happened on Christmas Eve did not make it any better. But fortunately people quickly forget.”

Lower wages warned
Lars Sørgard, an economics expert at the Norwegian Business School, warned the international expansion of Scandinavian companies like Norwegian Air will drive down local employees’ wages. Sørgard said unions will have few options to protect wages.

“We looked at the consequences of hundreds of mergers in the American sector,” Sørgard told newspaper Dagsavisen. “If the company gets a bridgehead abroad, the unions know it may be that jobs can disappear to the foreign department, if they are too tough in wage negotiations.” He said strike action can make the situation worse.

Kjos has already said foreign crews would be standard for international journeys. Sørgard said Norwegian would have no trouble attracting the staff. “I believe we should accept that there are foreign staff who still want to work for lower wages,” he said. “In the construction, hotel and restaurant industries it is almost accepted that foreigners have taken over. I see no reason why that can’t happen in aviation also.”

Norwegian said its cabin crews and pilots are unionized with contractual terms, and whether its international branches would have any affect on Norwegian wage levels was purely hypothetical.

Ryanair faces Norwegian courts
Meanwhile, a Ryanair flight attendant who was based at the Moss Airport in Rygge won the right on Tuesday to have her unfair dismissal case heard in Norway, reported Norwegian Broadcasting (NRK) and news bureau NTB.

Trade union Parat took former Ryanair stewardess Alessandra Cocca’s case to the Borgarting appeal court, arguing the case should be heard under Norwegian law, where the Slovakian woman lived and worked. Ryanair argued the case should be heard before an Irish court because Irish law regulates working conditions at the Moss base, and won the initial hearing.

Cocca claimed she was fired 10 months after taking up the position at Ryanair in April 2012 after she reported smelling alcohol on the cabin boss, who responded by filing a report claiming Cocca had failed to use the plane’s PA system.

newsinenglish.no/Emily Woodgate