Norwegian Air CEO Shares His Outlook for Summer time 2024

Skift Take

Geir Karlsen leads an airline that defied the percentages (and lots of critics) to bounce again from the sting of extinction.

Gordon Smith

Within the fashionable airline enterprise, firms are normally divided by their “low-cost” or “legacy” fashions. The upstarts versus the previous guard.

However is there room for somewhat Scandinavian pragmatism within the combine? Norwegian Air Shuttle appears to suppose so. “We’ve by no means tried to be a superior airline for the few, or an affordable airline for the various,” touts its advertising and marketing supplies.

No matter Norwegian is doing appears to be working. The airline emerged from the pandemic with a stripped-back route community and restructured funds.

Lengthy gone are its long-haul flights, which as soon as stretched as far afield as Argentina and Brazil. Today it’s extra about Copenhagen than Copacabana. 

Even in its slimmed-down type, Norwegian has bounced again to turn out to be Scandinavia’s second-largest airline (behind solely SAS) and the dominant participant in its native Norway. It boasts a strong community criss-crossing the Nordics, complemented by hyperlinks to main enterprise capitals and leisure-oriented routes to southern Europe.

Illustrating the size of Norwegian’s gravity-defying turnaround, final yr it snapped up Widerøe – the nation’s largest regional service – as a part of a $105 million deal.

The Skift C-Suite Collection

Within the newest of our Leaders of Journey: Skift C-Suite Collection, we sit down with Norwegian CEO Geir Karlsen. He’s led the Oslo-based service since June 2021 and beforehand held the function of CFO on the airline.

We hear his predictions for the all-important summer time season and learn the way Norwegian is differentiating itself from big-name rivals.

Skift: Summer time is historically Norwegian’s most essential season. How is it shaping up this yr?

Geir Karlsen: This summer time is wanting good. We’re promoting tickets now for a 10-15% greater yield than we have been on the identical time final yr and cargo components [the number of seats sold on a flight] are additionally on par. It looks as if the reserving curve has normalized somewhat. Persons are reserving a bit earlier so we’re getting better visibility. 

How involved are you concerning the present demand ranges softening? 

It’s query, however a tough one. As of as we speak, we don’t see a softening based mostly on the visibility that we now have. For us, the main target is executing our plan. We’re extra involved concerning the potential for delays within the supply of the Boeing 737s. We had delays final yr, we now have them this yr and we can have delays subsequent yr as nicely. Aside from that, the market is fairly sizzling. 

Do you’ve got the flexibility to carry onto your older Boeing planes for longer to mitigate any supply delays?

Sure, we do. That’s what we did final yr and we’ll prolong a couple of extra this yr as nicely.  

How do you differentiate Norwegian from direct and oblique rivals? 

Our fundamental competitor by far is SAS [Scandinavian Airlines]. They’ve their product and we now have ours, which is someplace between the low-cost and legacy mannequin. We now have gathered the expertise to study that the markets we’re flying in are prepared to pay somewhat bit extra for what we consider is a greater product. 

Does this hybrid method win you extra enterprise vacationers?

We’re taking market share on the company facet. We’ve been doing this for fairly some time however we’re now spending extra time on the section. One of many fundamental causes is that these enterprise passengers are touring all 12 months of the yr, which helps to ease out a number of the seasonal fluctuations. 

Excessive seasonality has been an enormous problem for airways within the area. What are you doing to assist counter this?

We’ve made good agreements with all of the unions – and there are fairly a couple of of them in Norway. This has made it doable for the corporate to take out capability within the off-season. We now have a part of the crew that’s solely flying in the summertime – these are extra like six-month, seasonal contracts. I like to consider it as a menu the place you’ll be able to determine in case you have an 80% place or a 70% place and so forth. Utilizing this method we now have managed to get via the seasons – it’s working for us. 

Are you seeing fewer vacationers visiting from Asia as a result of closure of Russian airspace?

Possibly to some extent, however we’re additionally seeing extra Europeans touring as much as the north. That is particularly the case in winter to see the Northern Lights and different sights. We now have been barely shocked – in a optimistic manner – by how fashionable this section has been. 

You took over regional airline Widerøe in January. What occurs now? 

We’re going to maintain Widerøe as a separate airline with a separate administration group, however we’re going to take up the synergies between the 2 firms. The largest one is clearly on the community facet the place we’re going to align the 2 networks in a greater manner. That may take somewhat little bit of time. For instance, we each have the summer time [2024] season on sale, so this might be a 2025 impact.

Does it fear you that there’s no apparent alternative for Widerøe’s turboprop fleet?

Sure and no. We all know that there is no such thing as a various as we speak to fly this community. We now have spent many hours within the hangar to get comfy with the life extension packages that the plane are at the moment in the midst of. We consider that we are able to fly them for no less than 7-10 extra years. Then we’ll see what occurs and what options are coming.

Learn extra from our new Leaders of Journey: Skift C-Suite Collection right here.