Thread: Deny NAI Again
View Single Post
Old 12-06-2014 | 07:12 PM
  #51  
Andy
Gets Weekends Off
 
Joined: Mar 2006
Posts: 5,213
Likes: 14
From: guppy CA
Default

I haven't been on this website in a long time, so pardon me for jumping in to this topic.

Typhoonpilot and I have had disagreements in the past. But he's very informed and one would be best served to respond to his comments with thoughtful responses rather than treat him dismissively.

Norwegian's business model is problematic for US long haul carriers - it lowers yields on transatlantic routes, just as all LCCs lower yields on routes that they fly. But this isn't the first transatlantic LCC, nor will it be the last. I remember Laker Airways, which died in the early 1980s. And even before that, there were 'travel clubs' which offered cheap transatlantic charter airfares. The only difference that I see between NAI and Laker, Maxjet, Eos, and all of the other discount carriers is that it has multiple subsidiary airlines that the parent company uses to shift flying in order to lower corporate costs.

If you guys are worried about transatlantic LCCs, I suggest that a bigger threat is transatlantic ULCCs. Like Wow Air. This airline is making flights to Europe as cheap as $99 - The Washington Post

Unfortunately, once the airline industry shows a couple of years of profitability, there will be new airlines that pop up which offer lower price tickets. Almost all don't survive in the long term, but they drive down airline profitability and employee wages in the short term. The problem is that there are very few barriers to entry in the airline industry. It used to be difficult to raise enough money to start up an airline - today, not so.

Rather than focus specifically on NAI, we should be focusing on how to increase barriers to entry to the industry.
Reply