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Tuesday, February 27, 2024

Norwegian eyes AirAsia alliance

Norway’s low-fare airline Norwegian Air appears keen on forming an alliance with AirAsia, its largest counterpart on the other side of the world. Norwegian’s CEO Bjørn Kjos calls the prospective partnership “a perfect match.”

Norwegian Air thinks a an alliance with AirAsia would make for a "perfect match" in feeding each other passengers on their Asian and European routes. PHOTO: Norwegian Air Shuttle
Norwegian Air thinks an alliance with AirAsia would make for a “perfect match” in feeding each other passengers on to their Asian and European routes. PHOTO: Norwegian Air Shuttle

Kjos and top AirAsia executive Aireen Omar were among the speakers at this week’s annual Skagen conference in Oslo. They spoke highly of each other, and newspaper Dagens Næringsliv (DN) reported on Wednesday about how they opened up for a model where each airline would operate on its own, but cooperate closely on passengers.

“It’s a perfect match,” smiled the ever-enthusiastic Kjos, going on to describe how Norwegian’s intercontinental flights could feed onward-traveling passengers onto AirAsia flights, and AirAsia passengers could fly on to Europe with Norwegian.

After a panel debate on changes within the aviation industry, both Kjos and Omar aired some thoughts about how a partnership might work. Kjos’ Norwegian launched its long-haul Dreamliner service between Oslo and Bangkok in 2013 but lacks connections onward within Asia.

AirAsia, meanwhile, flies more than 200 routes within Asia that could carry Norwegian passengers who are onward bound beyond Thailand. The two airlines could share revenues from the low-fare revolution in a possible joint venture.

“AirAsia is one of the world’s largest low-fare airlines,” Kjos told DN. “If we should cooperate with anyone, it would have to be them.”

‘Good idea’
Omar responded positively: “I think it can be a good idea if the passenger stream from Europe is strong enough,” she said. “If a serious proposal comes about, I will take it back to our chief executive, Tony Fernandes.”

He’s known as an innovative and entrepreneurial boss, much like Kjos. Based in Kuala Lumpur, he has guided AirAsia’s growth into an airline serving Bangkok, Kuala Lumpur, Singapore, Jakarta, Manila and other Asian destinations, and the airline is growing quickly in China. That’s where Norwegian is expected to seek new destinations over the next few years.

Until now, Norwegian Air has concentrated its growth on traffic between Europe and North America. It also has expressed ongoing interest in South America. The company hasn’t won rights to fly over Russia on its Bangkok-bound flights, making them more costly because of the need to skirt around Russian territory. Meanwhile, Norwegian is taking delivery of more Boeing 787 Dreamliners in a year, and needs to deploy them.

Norwegian would need to offer more direct routes between Europe and Asia in order to make itself interesting for AirAsia. Kjos thinks that could happen in 2017 or 2018. “When we get enough aircraft, I think it will be especially interesting to look towards China,” he said.

AirAsia has talked about flying long-haul routes between Asia and Scandinavia itself. It dropped a route between Kuala Lumpur and London when oil prices climbed over USD 120 a barrel. Now, with oil trading down around USD 30, new attempts may be more likely, unless it teams with Norwegian and feeds into them instead. AirAsia has also had financial challenges since a crash in December 2014, and stock market turbulence since.

Omar was clear on one point, though: Any new long-haul routes should have crews from several Asian countries, not just Thailand, where Norwegian has hired its own Asian crews. “There could surely be a cost advantage to only employ Thai crews on board,” Omar told DN, “But it appears they don’t speak English particularly well and there can also be culture clashes if all the crew is only from one country.” Berglund



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