It’s snowing in Copenhagen as Norwegian Air Shuttle Flight DY7041 lifts off. There are nearly 300 passengers on board, most of them Norwegians, Swedes, and Danes eager to escape the gloom that engulfs their part of the world in late November. Today they will arrive in Florida faster than usual. This is the first direct flight from Scandinavia to Fort Lauderdale. And it’s a bargain: The tickets are a fraction of what larger airlines charge.
Norwegian Air Shuttle Chief Executive Officer Bjørn Kjos has come along to celebrate the occasion.
Norwegian is Europe’s fourth-largest discount airline. Until recently, it was little known outside Scandinavia. Then, in 2012, Kjos made the largest airplane order in European history, buying 222 jets from Boeing and Airbus Group (AIR:FP) for $21.5 billion. Most of these are narrow-bodied Boeing 737 MAX8s and Airbus A320neos that will begin arriving in 2016. Kjos will use them to increase Norwegian’s presence in Europe and challenge the top three discount carriers: Ireland’s Ryanair (RYA:ID), Britain’s EasyJet (EZJ:LN), and Germany’s Air Berlin. Last year, Norwegian acquired its first two Dreamliners, which list for as much as $289 million each. Kjos is using these wider-bodied jets to offer cheaper international flights to distant places such as New York, Los Angeles, and Bangkok, undercutting established carriers in Europe and the U.S. Norwegian’s $180 tickets between New York and Oslo cost 10 percent of the equivalent ticket on British Airways. In effect, Kjos wants Norwegian to become a global version of Southwest Airlines (LUV).
Other upstart airlines have tried this and failed. Kjos says Norwegian will succeed because it has the Dreamliner and a new group of travelers to fly: the emerging middle-class citizens of China and India. He predicts that in the next decade there will be 500 million new airline passengers, and he hopes to attract them with low fares.
Kjos will have to do many things right for it all to work, and he’s already run into turbulence. He narrowly averted a strike by 600 pilots in November. They are unhappy with his plan to base Dreamliner flights outside Norway and staff them with lower-paid workers from Thailand and elsewhere. The Dreamliner still needs debugging. Kjos’s new jets have been grounded repeatedly by technical problems