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Newcomer Wizz Air offers airfares you’ve never seen before in Norway. There is explosive interest in tickets to Tromsø.
Hungarian low-cost airline Wizz Air will go live on November 5 with the three domestic routes Oslo-Bergen, Oslo-Trondheim and Oslo-Tromsø. The cheapest trips cost SEK 169 to fly to Bergen, SEK 199 to fly to Tromsø.
Finn Reise’s commercial director Terje Berge a Nettavisen says the lowest domestic airfares he could find were NOK 299 from Norwegian a few years ago.
Flight analyst Hans Jørgen Elnæs is pretty sure that 199 kroner is close to the cheapest one-way ticket of all time.
– So I’m talking about measuring yourself based on the number of seats offered at that price, and after the air passenger tax came in 2016, Elnæs responds. The tax has been temporarily removed until December 31.
I must buy you
– Are prices below SEK 200 too good to be true?
– The 199 kronor lure offer only includes one trip. You can’t bring more than one suitcase, and you have to buy to carry hand luggage, Elnæs responds.
Interest in flying north is huge with record prices. According to Berge, interest in flying to Tromsø has almost skyrocketed with the new low-cost offering.
Bookings between Oslo and Bergen, on the other hand, are down compared to the same week last year, but the decline is less than in recent weeks.
– Yes, reservations to Tromsø stand out in particular, with an increase of up to 41 percent compared to the corresponding week last year. There are as many who want to go to Tromsø on a package trip as to the Costa del Sol. Although the volumes are not very high, it is a fun thing, says Berge.
Also read: Norwegian responds in the air war: it throws prices to the bottom
Taken for granted
– The people of Tromsø have taken advantage of the offers, and it has been a great week for booking flights and quite inspiring that something happened during these crown times, he continues.
Berge believes that when trips to Troms and Finnmark end up in the Top 10 list for package tours, it says a lot about this market.
Elnæs is not much surprised by the sharp rise in interest in airline tickets to the north.
– Northern Norwegian markets haven’t had access to many low-cost tickets to Oslo, he says.
Also read: Wizz Air warns to stop free hand luggage
The business model
Elnæøs says the extremely low prices are Wizz Air’s business model. 45 percent of the company’s revenue comes from additional services, the rest comes from the flight itself. In Norwegian, the share of other income is only 18 to 20 percent.
Wizz Air highlights the three most profitable routes. As of November 5, the low-cost airline plans to participate in Christmas traffic as well.
– They have enough in-depth analysis, and if they are successful with these three routes, they put in more capacity, says Berge.
– How do you think the offer will be received in the market?
– What we know of the last 15 years is that the price is what is applied to the flights, he responds.
Also read: Ryanair with a Norwegian stick: – God help us
Norwegian cone
Both Elnæs and Berge believe Norwegian may lose more to the new competitor.
– Wizz Air is more attractive to the holiday and leisure market. This is where Norwegian has its largest market share. The business community, on the other hand, is very loyal to SAS, which has a high frequency on the most important routes.
FLOWING TO: Newcomer Wizz Air is establishing itself in Norway with record low prices.
Photo: Steve Parsons (Pa Photos)
It’s almost impossible for established Norwegian competitors to match Wizz Air’s costs.
– Yes, they have a crew with no Norwegian fees and are in a completely different class. Wizz Air has already come out and said they are half the cost of competitors. And Wizz Air has $ 17 billion in the bank, Berge recalls.
Norwegian and SAS have depended and do depend on fresh capital to survive. Wizz Air, on the other hand, has the financial power to withstand price competition.
Also read: Norwegian: nine out of ten passengers have left
Difficult
Norwegian has its CashPoints, Norwegian customers earn 1 crown in bonus for CashPoint. SAS has Eurobonus.
– But it is difficult to face the competition with something other than the price, it has been so easy. We have seen that on a return trip between Oslo and Bergen, they flew Norwegian one way and SAS the other just to save 30 crowns, exemplifies Berge.
There have been threats from various sectors in LO about a boycott of Wizz Air, because the Hungarian low-cost airline does not allow unions. Berge says he supports Norwegian conditions in Norway.
– But at the same time, we know from experience that those who say they don’t want to fly Wizz Air will fly whatever is cheapest anyway. It will probably be the case that people say one thing and do another, predicts Berge.
The wallet decides
– I don’t think the boycott will have any effect, it’s the wallet that counts. Price sensitivity applies not just domestically, but to all flights, and depends on what competitors do, he says.
Elnæs has previously worked for Ryanair. He says that with his knowledge, such threats rarely have much of an effect.
– Ryanair experienced a lot of the same a few years ago, but it had very little effect. When I worked for Ryanair, there were passengers who did not want to report that they were flying to London with the company. It was not entirely gloomy.
But Elnæs says that low-cost airlines now have a more accepted business model in which they score higher among passengers.
Serious donn
And if the unions are critical of Wizz Air, there is nothing to complain about the history and seriousness of the low-cost carrier.
– No, Wizz Air is “very serious” and has one of the most modern aircraft fleets in Europe. The planes are efficient, fuel efficient and environmentally friendly with new technology, Elnæs says.
According to Elnæs, both Norwegian and SAS have between 50 and 60 routes per week between Oslo and Bergen. As long as Wizz Air does not have a base in Norway, the number of aircraft they can deploy is limited. Until further notice, there will be two aircraft operating all three routes.
– But if they are successful with these three routes, they will put more capacity.
Fox ring
But it is not only Wizz Air that will now be launched on the Norwegian domestic market. Ring fox Erik G. Braathen has brought in former Norwegian top officials on the newly opened Braathen Air, but the company has requested up to NOK 1.5 billion in state support.
– Is there life for this company without this support?
– It will be difficult whatever happens, and the question is what position they will take in the market. It’s a cruel moment, as it happens at the same time as the investment in Wizz Air, responds Berge.
Elnæs says Braathen Air thinks a lot about Wizz Air, but perhaps focuses a little more on commercial traffic.
No war chests
– They have been clear that they do not have war coffers and cannot compete in price to the same extent. For Braathen Air, it’s about losing as little as possible in the next 12 to 18 months. Profits take time, they are talking about hiring 400 people.
– And even if they can rent affordable flights, the rates are the same for all companies. If the state doesn’t show up, it will be difficult to raise capital without risk-averse investors, predicts Elnæs.
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