The Adrian Loveridge COLUMN – Competition in the Airline Industry a Good Thing

Adrian Loveridge

Adrian Loveridge

After nearly three years of delays, the US Department of Transportation has finally given approval to what some with vested interests referred to as the ‘controversial’ air carrier permit application of the Norwegian Air Group’s Irish based subsidiary.

The application had drawn fierce opposition from legacy carriers including Delta, United and American, as well as from U.S. airline industry unions and some members of Congress. However, it received widespread and staunch support from the travel industry both in the United States and Europe and perhaps surprisingly, what will almost certainly become a major potential competitor to Norwegian Air across the Atlantic, JetBlue.

For sometime JetBlue and Norwegian have been working together dovetailing hubs like Fort Lauderdale, New York and Boston with seamless code share arrangements in the obvious financial interests of both airlines.

Initially, Norwegian planned to fly from the already approved routes of Cork, in southern Ireland to Boston and New York, but they have already announced a dramatic increase in flights between Gatwick and the USA, currently operating.

Why the Caribbean interest? Using existing European air treaties, Norwegian were able to operate routes between three US major airports to the French departments of Martinique and Guadeloupe with lead in fares as low as US$49 each way including taxes.

As I understand, provisional discussions have already taken place between certain Caribbean Governments, Norwegian Air and the Cork and Dublin airport operators to look at the feasibility of operating nonstop direct flights from the Republic of Ireland to the region. Even, at least in the initial days, a possible triangular service involving two island options to help minimise any perceived risk.

Needless to say, not everyone is happy. There has been a fierce reaction from the US Air Line Pilots Association (ALPA) whose President, Tim Canoll, was quoted as saying in response to the granting of final approval ‘This flawed action is a lasting legacy of the Obama administration and demonstrates an egregious lack of support for working men and women in this country’.

But what Mr. Canoll omitted to point out, that in fact Norwegian’s greater presence in the United States will create tens of thousands of additional jobs by the airline buying more American made aircraft, employing extra flight and ground crew and the unquestionable knock-on-effect created from more affordable travel and its trickledown effect on the entire US tourism industry, service sector and of course, endless shopping possibilities.

Norwegian had already placed the largest ever order in Europe, estimated at over US$5 billion (list prices) for the Boeing 787-9, with an additional nine or ten of these ‘Dreamliners’ starting to be delivered in 2017.

Another 100 of the re-engined MAX variant of the Boeing 737 have also been ordered for the short to medium haul fleet.

In the US Department of Transportation’s final order, acting assistant secretary for aviation, Jenny Rosenburg, said that the case was amongst the most novel and complex ever reviewed by them, but ‘regardless of our appreciation of the public arguments raised by opponents, we have been advised that the law and our bilateral obligations leave us no avenue to reject this application’.

Whether the incoming new US political administration will flip-flop on these conclusions remains to be seen, but in the interim the consumer or traveller will undoubtedly benefit from this increased competition.

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5 Comments on “The Adrian Loveridge COLUMN – Competition in the Airline Industry a Good Thing”

  1. Pachamama December 14, 2016 at 12:11 PM #

    For the second time in nearly 10 years the FED is expected to raise interest rates, today.

    We hope everybody was expecting this

    More so, that all the factors driving this are understood

    And ultimately all can forecast where these treads will lead us.

    Like

  2. Peltdownman December 14, 2016 at 1:16 PM #

    Canol is way off the mark. Higher fares came about as a result of de-regulation of airlines in the USA starting in the Reagan era. Nothing to do with Obama. It was thought that de-regulation would increase competition and reduce fares. The exact opposite was the result, with small carriers going to the wall trying to compete, and being swallowed-up by the big boys. The result was higher air fares, poor service, reduction in meal service, less seating space, and charging for everything. This Norwegian/Jet Blue competition has thrown a spanner in the works and of course the pilots see more downward pressure on their salaries.

    Like

  3. Peltdownman December 14, 2016 at 1:18 PM #

    I would really like to listen to a Frenchman who pays $49.00 from Paris to Martinique, and then has to cough up a LIAT air fare to go anywhere else in the Caribbean. Sacre Bleu!

    Like

  4. Hants December 16, 2016 at 7:16 AM #

    Trouble in the Caribbean.

    “AFTER 25 YEARS “the St Lucia Jazz Festival is finished.”

    http://www.nationnews.com/nationnews/news/91465/note#sthash.7gOKHTbZ.dpuf

    Like

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