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LOW COST HIGH BROW

With a larger premium cabin, Norwegian is expanding beyond its budget reputation

Premium cabin
Courtesy/Norwegian
Lean luxury in Norwegian's Premium cabin.
  • Rosie Spinks
By Rosie Spinks

Quartzy Reporter

Published This article is more than 2 years old.

Throughout Norwegian airline’s aggressive long haul expansion over the past four years, one thing has seemed clear: Their target passenger’s first priority is a low cost airfare.

Through a slew of tactics—such as flying hyper-efficient modern aircrafts, selling pay-for-what-you-use tickets, and servicing regional airports for some routes—Norwegian has succeeded in gaining significant market share on competitive routes, particularly transatlantic flights. By this summer, market share of the legacy transatlantic carriers—such as American Airlines and British Airways—is expected to dip below 90% for the first time, thanks to the low cost, long haul trend that Norwegian spawned.

But this week, with the launch of yet another long haul route as well as a newly-expanded premium cabin, Norwegian shows signs that passenger demand isn’t just coming from millennials and infrequent fliers looking to travel on the cheap. It’s coming from lucrative business travelers, too. It’s still low cost, long haul—but now with a touch more high brow.

The new London to Buenos Aires route, debuting Wednesday, will be serviced by the airline’s newly-configured Boeing 787 Dreamliner, which has 21 more seats in its Premium cabin, for a total capacity of 56. Throughout 2018, a total of 10 new 787s will replace its current London Gatwick-based Dreamliner fleet, meaning long haul passengers flying in and out of London will largely be treated to aircraft that are less than a year old. Lounge access is also included with a premium ticket and, by the end of the year, the airline plans to provide wifi on all its Dreamliner and 737 Max long haul flights (both a free and paid-for high speed option.)

The reason for these upgrades? Norwegian seeks to offer a “stronger proposition to business passengers” who are, of course, higher yielding customers. While Norwegian’s version of luxury may be a bit leaner than what’s on offer from, say, British Airway’s Club World business class, price-wise it’s a great deal. (The lowest one-way fare from London to New York is £450 ($625), including taxes). That fact, Norwegian CEO Bjorn Kjos told Quartz, has led to high demand for the premium ticket option on their transatlantic flights.

“Compare our Premium class to other airlines it’s 50% of the cost—people are starting to get aware of this,” Bjorn said at a press briefing in London. “Huge companies are saying ‘Okay you can fly on Premium on Norwegian—otherwise you have to fly on economy.’ This is probably one of the reasons why we have such high demand [for Premium] out of London and New York.”

In addition to its first South America route—which is the UK’s first ever direct, low-cost flight to South America, with fares starting at £259.90 one way—Norwegian has more long haul expansions plans for the coming year, too. With London Gatwick as its biggest long haul base, it has plans to increase the frequency of existing routes including those to Los Angeles and Fort Lauderdale (Miami), and hopefully offer triple daily service between London and New York. It’s also introducing direct services to Chicago and Austin in March.

More long haul flights mean more flexibility for business travelers—which the airline sees as a key step in asserting itself further as an upscale (and affordable) option for air travel. All of which is to say that Norwegian, despite its budget beginnings, is not slowing down any time soon.

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