Thursday, January 24, 2008

NORWAY - Winners and looser as airline competition hardens

There are winners and loosers, as the fight for the wealthy Norwegian air traveler goes on. Yesterday one airline filed for bankruptcy, another increased their luggage fees, but there is good news for the domestic traveler – more competition may provide more and cheaper tickets to many destinations, and Scandinavian Airlines may be the big looser.

Yesterday you could read a short statement on the website of the small airline Coast Air, that it had filed for bankruptcy. Coast Air was founded in 1975 and was until its financial collapse the 4th largest air carrier in Norway. Coast Air operated daily services to Haugesund, Bergen, Sandefjord, Oslo, Fagernes, Trondheim, Molde, Stord, Bodø, Andenes, Tromsø og Stockholm. The company have grounded all their planes, and those that have booked tickets with the airline will not get their money back.

This happens as carriers are struggling to keep their schedules and lower the cost to stay competitive. This may affect the traveler too much, and bring the wrath of the ever more price conscious traveler. Ryanair, that operate from Sandefjord Airport Torp, announced that the company is determined to force passengers to travel with 10 kilos (20 lb) of hand luggage only. Those travelling with more will have to live with much higher luggage fees. From January 23rd you will have to live with a 50% increase from EURO 6-9, if you choose to bring one extra suitcase and if you choose to check in at the airport, and not on the Internet, the air carrier will charge you an extra EURO, a 25% rise in their fees.

The official explanation is that if you travel with one piece of luggage and check in on the Internet, you will increase their punctuality, thus keeping prices down for you and your fellow travelers. I suspect that there are other (read; financial) reasons for this rise in fees. Ryanair wants you to pay more for your trip in the form of other expenses not showing in the advertisements of bargain flights. but gets clear to you as you will pay your bill. This is a trick Sterling, and many other low price carriers use to disguise the fact that the cheap tickets you thought you had booked are far more expensive, in fact up 3-4 times the original bargain price.

Whatever explanation - this is not more than arrogant behavior from an increasingly large air bully, to say the least. Most passengers may still bank on its cheap airfare, but if Ryanair expect people leaving for a longer holiday or a break to bring a small suitcase or a backpack only, the air carrier may go in for a hard landing, as many travellers may choose other low price carriers with a better attitude.

As we speak of Sterling. The deputy director general of the Danish low price airline Sterling, Michael T. Hansen, suggests to the Norwegian newspaper Aftenposten, that the airline may start services in the Norwegian domestic market. Norwegian air space has until now been dominated by Scandinavian Airlines with its two subsidiaries Braathens and Widerøe, and Norwegian Air Shuttle. The latter has been a relative newcomer, and has made the domestic market much more competitive with more departures and lower prices for the consumer. Michael T. Hansen says that the low cost carrier may give the two rivals even more competition pointing to the effect the airline has had on their new services within Denmark and Sweden.

Well bearing in mind what I already have told on Ryanair, be aware that Sterling do the same thing, as they have introduced fees for luggage handling, booking, seat reservations, and excludes the taxes. So I think that Sterling may struggle, as Norwegian Air Shuttle has introduced very low prices on domestic flights.

I will keep you posted on which air carrier that win the fight to conquer the hearts, minds and money of the wealthy Norwegian traveller.

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