Two companies that have shaken up the airline industry may be about to shake it again. Ryanair and Norwegian are working on a deal that will allow Ryanair to feed its short-haul passengers into Norwegian's trans-Atlantic flights, and will give Norwegian reach into many more European destinations..
The plan would sharply impact European legacy carriers such as British Air and Lufthansa, which have been struggling to compete for short-haul passengers with discounters such as Ryanair, EasyJet and Wizz while also trying to hold on to the lucrative long--haul market against Norwegian's discount pricing.
Ryanair would also gain an advantage over its lowcost rivals by being first to be able to sell long-haul tickets to North America, Asia and other destinations. It could also serve as a model for linkups by U.S. low-cost carriers such as Spirit and Allegiant, either with Norwegian or another carrier.
The deal has been under discussion for a while, according to Ryanair marketing officer Kenny Jacobs. He's quoted by the Sunday Telegraph (UK) saying that talks “are now moving forward with more pace than when we first started discussing the deal – there’s new momentum behind it now...Feeder deals will become an aspect of the European aviation market in 2017 and we’d like to see this deal come through as early as possible,”
The deal, if made, appears to offer strategic competitive advantage for the future rather than immediate financial benefit for the companies. Both are already routinely flying with full planes and don't have a lot of empty seats to fill, but by getting there first, they hope to stave off rivals who have similar ideas.
Comments (1)