Print Download as PDF Operations and Market Development

01.02.2012


In 2012 Norwegian expanded its network extensively with 52 new routes: 28 in Norway, 12 in Sweden, 7 in Denmark and 5 in Finland. By year-end the Group operated 359 scheduled routes to 121 destinations. Norwegian took delivery of a total of 13 environmentally friendly Boeing 737-800 aircraft during the year, while retiring 6 Boeing 737-300 and one 737-800 from the fleet. Net fleet growth was 6 aircraft, with the year-end fleet comprising 68 aircraft.

Network
 
The Group’s route portfolio spans across Europe as well as into parts of 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.
 
Norwegian opened two new bases outside the Nordic region in 2012; Malaga and Las Palmas. The new bases enable Norwegian to serve provincial destinations non-stop from the Mediterranean to Norway, Sweden and Finland. The new bases with predominantly long flights will have high an average aircraft utilization at approximately 14 to 18 hours a day.   


Optimization of ROI is 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 one example.
     
  • Replacing Mediterranean routes with routes to the Alps and the Middle East during the winter season.
     
  • Replacing business routes with leisure routes during the mid-summer period operating flights at nighttime during peak seasons.
Domestic, intra-Scandinavian and typical European business destinations have the highest frequencies, which attracts business travelers. The Oslo-Bergen and Oslo-Trondheim routes have the highest frequencies with 13 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
 
Approximately 17.7 million passengers traveled with the Group in 2012, an increase of 13 percent, reflecting the Group’s expansion strategy. Intra-year variations in passenger volume are significant as a large share of the route portfolio is allocated to international destinations, increasing the Group’s exposure to seasonal fluctuations. Despite seasonality, quarterly year-on-year growth was considerable throughout the year.


passengers.png


In 2012 passenger traffic (RPK) increased by 17 percent while the increase in production (ASK) was 18 percent. The load factor was 79 percent during 2012 which is equivalent to 2011. Norwegian operated 138 342 commercial flights in 2012 with an average flying distance of 1 048 kilometers, up 5 percent from 1 000 kilometers last year.


ask.png



The ticket revenue per available seat kilometer (RASK) increased 4 percent in 2012. Both RASK and cost per available seat kilometer (CASK) correlate negatively with distance implying lower CASK with longer flight distance and vice versa. Intra-year variations in RASK are significant.


rask.png

 

 
Market Shares
 
 
The Group’s position in the Nordic market improved in 2012. Growth was focused on Sweden, Denmark and Finland. Norwegian grew its market share by 3 percentage points at all the capital airports in these countries, equivalent to an increase of 1.4 million passengers or 70 percent of the overall growth.
More than 0.1 million additional passengers chose to travel with Norwegian to or from Oslo Airport in 2012 which is equivalent to 6 percent of the Group’s total growth. The growth in Oslo was slightly less than the market resulting in a market share of 36 percent which is a one percentage point decrease from last year.

Norwegian opened a number of international routes from new bases in Malaga and Las Palmas to provincial airports across the Nordics in 2012, helping passengers avoid tedious intermediate landings at one of the capital airports. More than 2.5 million passengers chose to travel on domestic and international provincial routes in 2012, an increase of 0.5 million which is equivalent to 24 percent of the overall growth.

 


marketshare_per_airport.png

 


Ground Operations and In-flight Services
 
The Group outsources all ground handling services at all destinations. Outsourcing and monitoring are performed by a small team of dedicated staff. The focus on cost effective self-service solutions remains and in 2012 Norwegian has introduced self-service bag drops on several Nordic destinations. This focus will continue in the coming years to secure cost effective handling of passengers and flights all over Europe.
 
Gate Gourmet provides catering services to the Group. The airline and the caterer work closely together to provide an attractive “shop on board” experience tailored to Norwegian’s customers in the different markets.
 
By year-end in-flight Wi-Fi was available on 54 out of 58 Boeing 737-800 in the fleet. All 737-800 aircraft will be Wi-Fi enabled.
 

Punctuality and Regularity
 
Punctuality measured in delays exceeding 15 minutes was 85 percent which is equivalent to last year. The Group, with the support of all its employees, aspires to achieve an average of 90 percent punctuality. The main reasons for delays in 2012 were related to third party industrial actions and understaffed ATC in Norway, air traffic congestion in Central and Southern Europe, and adverse weather conditions at the end of the year, particularly in December.
 
Norwegian reported a regularity of 99.55 percent in 2012 (97.67 percent).
 

puntuality.jpg