Norwegian confirms Heathrow slots, purpose remains secret
In a surprising move, Norwegian Air Shuttle has been granted six slots at one of the world’s most congested airports ‒ London’s Heathrow (LHR). The low-cost long-haul carrier has confirmed the news, but currently retains a secret on what future routes it might mean.
Norwegian Heathrow slots: what is known?
Norwegian’s UK subsidiary, Norwegian Air UK, initially asked for 14 slots at London Heathrow Airport but only 42% of its wishes have been granted, a report by LHR coordinator indicates. The airline got six slots ‒ three landing and three takeoff ‒ becoming the only new entrant in LHR for the summer season of 2020.
The airline has confirmed the news to AeroTime, adding that: “We have a strong track record of disrupting incumbent carriers and alliances by offering low fares and award winning service on specific routes and destinations that were previously operated as monopolies.”
“Our strategy benefits both consumers and businesses boosting local economies and employment.”
“We have a strong track record of disrupting incumbent carriers and alliances by offering low fares and award winning service on specific routes and destinations that were previously operated as monopolies,” Philip Allport, the airline’s Director of Communications and Public Affairs, UK & Ireland wrote in the email.
Obtaining six slots at London Heathrow means that Norwegian has been granted six times per week for the summer 2020 to use the airport’s infrastructure, such as runway, terminal, stands, etc.
Norwegian Air UK already operates in London but in a different airport. From Gatwick (LGW) it flies to the United States (Boston, Los Angeles, Miami, New York, Orlando, San Francisco and Tampa), Brazil (Rio de Janeiro), and Argentina (Buenos Aires).
While media reports suggest that it could now open a route between London and Orlando (Florida, United States), the airline itself currently keeps its network plans a secret. “We continuously adjust our network in response to demand and we will announce any further changes as and when it is appropriate to do so,” according to Allport.
The curious case of Norwegian’s Heathrow slots
Norwegian being granted airport slots in Heathrow is, no doubt, a success for the airline, keeping in mind that slots there are definitely not being handed to all seekers. However, the move has raised more questions than answers in the light of the carrier’s current strategy and financial situation.
Heathrow is one of the world’s most congested airports. In 2018, Airports Council International (ACI) declared it the seventh of the top ten busiest airports by passenger traffic. That year, 80 million people passed through it either enplaning or deplaning; 75 million of them were international passengers, making the airport also the second in the world by international passenger traffic.
Operating at its full capacity for years now, the two-runway airport has such high slot demand that it is famous in its own right. Some notable examples of the highest-ever fares paid for an airport slot concerned none other than Heathrow. For instance, Oman Air handed Air France $75 million for a slot pair in 2016, stealing the spotlight even from such pricy deals as $209 million for four pairs (paid by Continental Airlines to GB Airways in 2008) or $75 million for two slot pairs sold by Scandinavian Airlines, or SAS, in 2017.
The fact that demand is incredibly high at the airport, is well illustrated in the Heathrow Airport Initial Coordination Report for summer 2020. JetBlue (JBLU) , a low-cost carrier from the other side of the Atlantic, similarly to the Nordic counterpart, currently has no slots in LHR. For the same scheduling season of summer 2020 it has requested 70 slots ‒ and was granted none. SpiceJet, low-cost carrier from India, also did not get a chance to enter the airport, as its request for 14 slots came to no fruition. Two Heathrow’s old-timers, Flybe and Virgin Atlantic, were eyeing to increase their presence by 62 and 114 slots respectively. Only Virgin Atlantic’s effort came to some avail ‒ it was granted two slots.
However, while stepping a foot through Heathrow’s doors is a valuable asset, Norwegian’s newly acquired six slots are not exactly something that can be stacked in a bank for better days. This is because sustaining airport slots also has associated costs.
Take, for instance, the 80/20 “use it or lose it” rule. In general, it means that to maintain slots, an airline has to operate them at least 80% of the time. With six slots for summer 2020 scheduling season, which begins on March 29, 2020, and lasts until October 24, 2020, this would mean that Norwegian has to operate no less than 72 flights in/out of Heathrow during the period just to keep the slots.
The move is even stranger considering Norwegian’s current network and strategy. With six slots, it could operate around three weekly flights ‒ quite a sharp contrast to dozens of flights it operates in Gatwick. For a low-cost carrier, the lack of economies of scale is an unusual move.
Interestingly, the slots announcement comes just after the second Norwegian’s long-haul network trim announced in recent months. In late November 2019, the airline revealed that it would cease to operate half of its long-haul routes from Scandinavia towards Thailand and the United States. From September 2019 it also no longer operates six routes from Ireland to the United States and Canada. The airline is currently working on a strategic transformation, aimed to bring the carrier from “growth to profitability”.
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