Kjos Contends Low-cost Long-haul has ‘Great Future’

 - November 22, 2019, 2:30 AM
Confident in the low-cost long-haul business model, Norwegian Air Shuttle has plans to become part of a large, as yet undisclosed, entity. (Photo: Norwegian Air Shuttle)

Bjorn Kjos, president and founder of Norwegian Air Shuttle, remains confident in the low-cost long-haul business model despite the company’s current financial difficulties and the bankruptcy of several of its competitors, such as Primera Air and Iceland’s Wow. “We see a great future in low-cost long-haul,” he said at the IATA Wings of Change Europe conference, noting that Norwegian in 2018 became the largest non-North American airline to serve the New York and New Jersey area—ahead of all other European carriers—only five years after launching long-haul flights.

He vowed Norwegian will be part of “a large entity coming up. Watch out.” He did not disclose details; however, a merger or acquisition does not appear to be in play as he set aside suggestions of a possible takeover by Lufthansa, saying: “[Lufthansa CEO] Carsten [Spohr] is a nice guy and Lufthansa is a great airline. But I think we are doing fine on our own.” Last year, Norwegian rejected two consecutive buyout offers by IAG.

According to Kjos, some of the players in the low-cost long-haul segment that ceased operations “forgot you need a good feeder network. We have some 550 routes, and we still don’t have enough feed, hence our cooperation with EasyJet and JetBlue.”

Norwegian inked a first partnership deal with EasyJet in September 2017, to connect Norwegian’s long-haul network with easyJet’s European routes, initially over London Gatwick, Norwegian’s largest base for long-haul routes and a large EasyJet base. A second partnership deal was signed in October with JetBlue, to feed passengers into each other’s networks. The interline agreement with JetBlue is expected to be operational in the first quarter of 2020, Kjos told AIN, acknowledging the planned cooperation with EasyJet is still not up and running. “There are some obstacles, mainly due IT issues; Easyjet has its own system and it is difficult to link it to ours,” he said.

He remained tight-lipped about the upcoming “large entity” and would not reveal which other connecting deals Norwegian is considering or negotiating. Some years ago, Norwegian held talks with Ryanair over a connecting flight agreement, but they did not result in an agreement. There no plans to become part of an alliance, Kjos said.

In July, Kjos stepped down as CEO of the airline after 17 years in the role, saying his departure from the daily management of the low-cost carrier was long overdue. Kjos, who still owns a large stake in the company, is 73.

The board turned to a non-aviation non-executive to steer the airline through the next phase of its restructuring and this week named Jacob Schram CEO of Norwegian. Schram, a Norwegian citizen, previously held managing roles in Circle K, Statoil, McDonald's, and McKinsey. He will begin his appointment in January.