Norwegian Returns Heathrow Lottery Slots To Airport


In early December 2019 I wrote about a development for Norwegian that seemed like a great opportunity on the surface, but not really.

Norwegian was granted Heathrow slots

Heathrow is one of the most slot restricted airports in the world. That means that in order to fly to the airport, airlines have to get “slots,” and those can be purchased and sold for some outrageous amounts. For example, in 2016 Oman Air made headlines when they paid $75 million for a Heathrow slot, as they purchased it from Air France-KLM.

Up until now Norwegian has operated exclusively out of Gatwick Airport in London, which is logical — it’s lower cost, and slots at the airport are easier to come by.

Well, several weeks ago Norwegian was granted six weekly slots at Heathrow (meaning three roundtrips, since a takeoff and landing each require a slot). They had requested 14, but as usual, airlines aren’t typically granted what they’re requested.

Since this was a lottery process, it’s normal for airlines to throw their hats in the ring and see what they get, since there’s not much downside.

The issues with Norwegian launching Heathrow flights

As I pointed out at the time, I didn’t really see how it would make sense for Norwegian to launch 3x weekly roundtrip flights from Heathrow:

  • Norwegian has no connectivity at Heathrow, while they have lots of connectivity at Gatwick
  • Arguably a 3x weekly flight out of Heathrow isn’t exactly going to build up much of a presence there, or pose a threat to British Airways or Virgin Atlantic
  • Presumably the operating costs for Norwegian will be much higher out of Heathrow, purely due to economies of scale; it’s more expensive to do everything when you have a flight every couple of days, rather than when you have dozens of flights per day

Norwegian returns Heathrow slots to airport

I guess it shouldn’t come as much of a surprise, but Norwegian is doing exactly with these slots what I expected — nothing.

Norwegian’s Head of Strategic Capacity & Slot Control has advised that the airline is returning the slots to the airport:

We would like to thank both ACL and Heathrow for granting Norwegian three slots for the Summer 2020 schedule. After careful consideration, which took into account the current fleet pressures placed on the airline by well documented issues with a specific Rolls Royce Trent engine type and the continued grounding of the Boeing 737 MAX aircraft, we have decided to return the slots as they do not fit into our network plan at this current time. As the airline moves from a strategy of growth to profitability, we look forward to having future discussions with ACL and Heathrow.

Bottom line

Ultimately this seems like the right move for Norwegian. While winning the Heathrow slot lottery sounds exciting, in reality operating such limited flights to Heathrow simply doesn’t make sense, in my opinion. And it seems the airline agrees…

It also shows some maturity on Norwegian’s part, and that they’re serious about focusing on profitability over growth.

I’ll be curious to see what airline gets these slots in Norwegian’s place.

Are you surprised to see that Norwegian returned these slots to Heathrow?

The post Norwegian Returns Heathrow Lottery Slots To Airport appeared first on One Mile at a Time

Source: local news


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