Why Norwegian is the World's Unluckiest Airline

low cost carriers have completely changed the way that the airline industry operates by leveraging innovative practices they drive down operating costs and pass the savings off to their customers making air travel accessible to all today there are nearly 100 low-cost carriers operating globally many of which have demonstrated the ability to achieve and sustain profitability however something you'll notice is that almost all low-cost carriers are localized their operations are primarily short haul routes a successful blueprint to long-haul low-cost air travel has remained elusive many airlines who've tried it have failed miserably and yet one airline has recently had a breakthrough developing a business model that can buck the trend but due to extenuating circumstances it may never get the chance to really prove it and it might just be if the world's unluckiest airline let me explain the airline in question is norwegian air shuttle if you've ever flown Norwegian you know it's a classic no-frills budget experience you've got to pay to check your bags you've got to pay for food and drinks you've got to pay for entertainment Wi-Fi seats election blankets pillows etc but this approach allows Norwegian to offer up front fares at a much lower price and it's been extremely successful in that approach between 2008 and 2018 the airline sought its annual number of travelers quadruple in size now Norwegian has been employing these sorts of low-cost tactics since they began operations back in 2002 but it wasn't until 2010 that they decided to break into the long-haul segment they were empowered to do so largely thanks to the advent of a brand new plane the 787 dreamliner for Norwegian the plane was the perfect tool to crack the long-haul puzzle in general the biggest obstacle to cheap long-haul flight is fuel as I covered in my Emirates a380 video which I'll link in the upper right a plane's fuel cost grows exponentially with distance so the viability of budget travel becomes harder to realize the longer the trip but when Boeing launched the 787 program they built in a number of moonshot technologies designed to bring about remarkable efficiency gains and not only has the plane proven to be 25 percent more efficient than its predecessor but it's also optimized to fly on longer routes by pairing its budget airline tactics with the 787 sufficiency Norwegian had a really interesting formula on its hands and over the course of the next several years Norwegian aggressively through its 787 fleet agreeing to acquire 36 total aircraft all the while they continued to reap massive gains seeing their largest profit ever in 2016 at about a hundred and forty million dollars the long-haul low-cost model that they were building seemed to work but then things started to unravel and while most budget airlines fail because of poor management or an unsustainable approach Norwegians demise was largely out of its control in 2016 Japan's all upon airwaves discovered corrosion related fatigue cracking in the engines of their 787's those engines were of the rolls-royce Trent 1000 variety which happened to be the same type that norwegian used it soon became clear that the problems a na was having were systemic to all trent 1000s in service consequently dozens of airlines including norwegian had to bring in their seventy sevens for repairs the only company with the expertise to actually fix the problem was rolls-royce itself since hundreds of engines needed fixing and rolls-royce have limited staff and repair infrastructure a massive bottleneck emerged as such norwegian was forced to stagger its 77 groundings over the course of a couple of years keeping a close eye on and constantly monitoring those that were still in the air because of this staggered repair process it meant their fleet would remain at reduced capacity for quite some time the airline had to do a few painful things as a result first they had to cancel a lot of existing long-haul flights second they had to either rebook the passengers on other airlines or issue them refunds both of which were expensive options third they had to temporarily suspend at some routes cutting off potential revenue streams this definitely hurt the airline and they saw their profits completely wiped out just a year removed from their largest ever profit they suffered a 240 million dollar loss luckily their business wasn't entirely staked on long-haul travel they were still operating the same short haul routes that had built the company in the first place plus demand for budget air travel across Europe was exploding at the time even with the 787 7 the airline was well positioned to pounce on this opportunity and they had just the tool to make it happen as they would soon be introducing another brand new plane that was perfect for short-haul expansion so what was this plane that was going to help Norwegian weather the storm well you guessed it it was the 737 max Norwegian first took delivery of the Macs in 2017 and less than two years later the planes had to be parked indefinitely after serious safety concerns emerged in that timeframe Norwegian had taken delivery of 18 units the third most of any airline Norwegian again had to engage in the vicious cycle of canceling flights refunding and rebooking passengers and suspending certain routes by the end of 2019 the airline had posted its third straight year in the red now not only was the airline's long-haul business in jeopardy but the viability of their entire operation had been thrust into dire straits and oh yeah things were about to get worse just a year or so later the corona virus pandemic began wreaking havoc on the aviation industry well I'm not going to belabor the point toven 19 has crushed commercial aviation demand which might be the nail in norwegians coffin some airlines with deep pockets and cash reserves will survive the pandemic however it's becoming painfully obvious Norwegian is not one of those airlines they were already siphoning cash before the crisis as of April 2024 of Norwegian subsidiaries have filed for bankruptcy and 4700 jobs are at risk by the time this video is posted who even knows if Norwegian will exist in the same capacity at the end of the day Norwegian is a cautionary tale I've said time and time again that the aviation industry is a risky business to be in and this is a perfect example of why less than five years ago Norwegian was a free airline who was innovating and finally cracking the code for long-haul low-budget travel but today it stands on the brink of collapse thanks to factors largely outside of its control and because of that Norwegian might just be the unluckiest airline of all time now I've only flown on Norwegian once and it was short haul on a 737 if you flown long haul with them I'm curious to hear what that's like so let me know in the comment section below if you haven't let me know what airlines you are most hoping survive the coming months thanks so much to my patrons for making this video possible and as always if you learn something new today leave a like and subscribe to keep learning and until I see you again don't forget to look out

Channel: Coby Explanes

Views: 425,729

Keywords: Norwegian, Norwegian Air Shuttle, Norwegian Air, Norwegian Airlines, Aviation COVID, 787, Norwegian 787, 737, Norwegian 737, 737 max, Norwegian 737 max, 737max, Norwegian 737max, Airline Bankruptcy

Id: rdCMH1FGYZw

Length: 8min 42sec (522 seconds)

Published: Fri Jul 17 2020