Asian airlines to be the new competitors
The emergence of Asian airlines such as Air Asia and Scoot, or Jetstar and Cebu Pacific keeps the chief-executive of Norwegian Air Shuttle Bjorn Kjos engaged.
“The Asian airlines operate with costs that are half that of Emirates and a third of Lufthansa’s,” Mr Kjos said to the BBC. According to him, the existing competition restrictions prevent them from competing head-on with carriers in Europe and North America, but lobbying to prevent them from coming would be futile.
Currently, nine out of 10 passengers on flights between Europe and Asia are European, but in a decade or two, that picture will have been reversed, Mr Kjos predicts. He believes that a global Open Skies agreement will strongly affect commercial flights.
To make sure Norwegian stays in the game, Mr Kjos has decided to compete in the low-cost long-haul market, initially with direct flights from Scandinavia to New York and Bangkok, then after a while through a prospective Asian subsidiary.
“Asian low-cost carriers will dominate the fast-growing low-cost long-haul sector, so if you’re going to compete in the future, you have to do like the Asians. You have to be there,” said Mr Kjos stressing the importance of cost-cutting. He adds that in Asia, people in aviation business earn the tenth of the salary in Scandinavia.
Mr Kjos’ vision and such statements have created tension with pilots, cabin crews and the government at home. Some accused him of social dumping, but he insists he has no choice and that Western airlines must be reshaped in order not to be outcompeted by the Asians.
[photo courtesy Norwegian]