Saturday 24 March 2018

How Europe's three biggest budget airlines plan to take over the world

'Low-cost alliance'

Norwegian. Photo: Deposit
Norwegian. Photo: Deposit

Hazel Plush

Rival airlines Ryanair, Norwegian and easyJet could team up to take on the airline industry.

The head of Norwegian has revealed plans to join forces with the likes of Ryanair and easyJet in a bid to create a powerful “low-cost alliance”.

The partnership would aim to challenge the long-haul routes of full-service airlines – such as British Airways or Emirates – with lower ticket prices and links to more regional airports. In time, it could make inroads into other markets in Asia, the US and the Middle East.

The collaboration would be a momentous U-turn for the rival airlines, usually fighting for business in an increasingly competitive marketplace.

Bjørn Kjos, founder and chief executive of Norwegian, told CNN Money that he hoped to formalise a partnership with Ryanair before the end of this year.

“If we can do it with Ryanair, we can cover lots of routes,” he said. “We should definitely like to do it with EasyJet as well.”

Frankfurt-Hahn Airport. Passengers board a Ryanair passenger plane. Photo by Ulrich Baumgarrten via Getty Images
Frankfurt-Hahn Airport. Passengers board a Ryanair passenger plane. Photo by Ulrich Baumgarrten via Getty Images

A spokesperson from Ryanair confirmed that the airline is currently in negotiations with Norwegian. “We are speaking to a number of airlines concerning feeding their long haul flights, and we are in advanced talks with Aer Lingus and Norwegian. It’s a logical move and a very attractive proposition for long haul carriers.”

A partnership would enable passengers to buy connecting flights across participating airlines’ networks, without the need to book separate tickets.

It would also enable budget carriers to compete with bigger flagship airlines, driving down the cost of long-haul travel.

“The passenger [would have] access to a huge network,” said Kjos. “So they can fly cheap not only from A to B, but also from A to B to C to a variety of areas that we would never serve.

“Ryanair, EasyJet or Wizz Air fly to a lot of cities we don’t even know how to spell the names of,” said Kjos, referring to the airlines’ smaller Eastern European destinations. “It could be in the future a low-cost alliance. We’re the only one flying long-haul, so it’s a different structure.”

Ryanair, which serves 203 destinations in 33 countries, has the largest European route network of all airlines (surpassing even British Airways, which serves 183 destinations), with bases in Dublin and London Stansted.

easyJet has 19 European hubs, but has had a rocky year due to fluctuations in sterling and tumbling share prices.

Meanwhile Norwegian, which offers low-cost long-haul routes to the US, Caribbean and Asia, has announced it is expanding into Argentina.

An easyJet flight. Photo: PA Wire/Press Association Images
An easyJet flight. Photo: PA Wire/Press Association Images

“We can confirm that a new company, Norwegian Air Argentina, has been established to allow us to explore opportunities to enter the Argentinean market,” said a Norwegian spokesperson. “Though this is at a very early stage and no routes are confirmed at present.”

With regards to plans to collaborate with its European rivals, a spokesperson from Norwegian’s press office said that the airline has discussed its plans with numerous airlines, “including Ryanair… but nothing is agreed at this stage.”

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