Network
The Group has a route portfolio which spans across Europe as well as into North Africa and the Middle East, serving both business and leisure markets. The basic principles behind Norwegian’s network development are to grow major point-to-point markets that have been excessively priced or underserved, while simultaneously maximizing aircraft and crew utilization. Optimization of ROI is sought to be achieved by:
- Operating high-RASK business routes during peak hours, and focusing production on low-RASK leisure routes during midday off-peak hours.
- Focusing on leisure destinations with year-round interest in the Nordic market. The Canary Islands is an example.
- Replacing Mediterranean routes with routes to the Alps and the Middle East during winter
- Replacing business routes with leisure routes during the mid-summer period
- Operating flights at night during peak seasons.
The company operates domestic flights in Norway, Sweden and Denmark.
Domestic, intra-Scandinavian and typical European business destinations have the most frequencies, something which attracts business travelers. The Oslo-Bergen and Oslo-Trondheim routes have the most frequencies with respectively 13 and 12 daily rotations on weekdays. Typical leisure destinations in Southern Europe, Northern Africa and the Middle East are typically served once a day or less.
Traffic Development
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In 2009 passenger traffic (RPK) increased by 17% while the increase in production (ASK) was 18%. The load factor was 78% during 2009, a 1 percentage point decrease from 2008. Norwegian operated 92,307 commercial flights in 2009 with an average flying distance of 913 kilometers, down 2% from 927 kilometers last year.
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The ticket revenue per available seat kilometer (RASK) decreased 4% in 2009. The development is partially driven by an adjusted route portfolio, larger more cost efficient aircraft which can sustain lower RASK levels, and the removal of a fuel surcharge which covered the record high fuel prices in 2008. As a result of the large share of flights to leisure-oriented destinations, the RASK is affected by seasonal fluctuations and particularly holiday seasons.
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Market Shares
The Group’s position in the Norwegian market improved in 2009. At the end of the year the Group had a market share of 47% on the four largest domestic routes in Norway, an increase of 3 percentage points from last year. The market share on all international flights out of Oslo Airport increased by 3 percentage points to 29%, the domestic market share from the same airport increased by 6 percentage points to 45%.
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The Group operates three domestic routes in the Swedish domestic market, with a market share of 35% at the end of the year. Norwegian’s market share on all international flights out of Stockholm Airport was 8% by year-end.
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The Group operated one domestic route in Denmark in 2009 and achieved a market share of 30% by the end of the first full operating year. Norwegian had an overall market share of 9% on international flights out of Copenhagen Airport by year-end.
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Ground Operations and In-flight Services
The Group outsources all ground handling services at all destinations. Outsourcing and monitoring is performed by a small team of dedicated staff.
Gate Gourmet provides catering services to the Group. There is close cooperation between the airline and the caterer to provide an attractive “Shop on board” experience tailored for Norwegian’s customers.
Punctuality and Regularity
Punctuality measured in delays exceeding 15 minutes improved by five percentage points in 2009, to 81%. The Group, with the support of all employees, aspires to achieve an average of 90% punctuality. The main reasons for delays are usually related to ground handling, shortage of crew, adverse weather conditions, air traffic congestion or technical issues. Norwegian reported a market-leading regularity of 99.73% in 2009 (98.93%).
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