So far, Norwegian primarily competes with SAS in its home market. The partially state-owned airline narrowly managed to escape bankruptcy earlier this year when unions agreed to extensive cost cuts at the last minute. And Kjos is quite happy about it: “I hope SAS will survive. The market is too big for us and if SAS disappears there will be a better competitor coming in.”
Norwegian's short-haul model is not the rock-bottom cost approach that Ryanair takes. The latter allows connections within its own network, but has so far abstained from interlining or code-sharing with others. Because the carrier already operates such a vast European network, it does not need another airline to feed the new long-haul services, at least not on the European end of its routes.
Even on narrowbody aircraft, Norwegian has begun to offer free wireless Internet access. That is of value to its passengers because its average segment length is quite significant. There are a lot of 5-6-hr. flights from Norway to the Canary Islands; the company even serves Dubai in the winter. And Kjos argues that Norwegian gains more from offering Wi-Fi for free, thereby attracting more passengers, than charging for the service.
“Longer sectors are part of our strategy,” Kjos explains. “The longer the sectors are, the lower the cost per available seat kilometer.” In first-quarter 2013, Norwegian carried 8% more passengers, but revenue passenger miles were up 19%, reflecting that trend. Kjos claims that the only reason Ryanair's unit costs are below Norwegian's is because their average stage length is even shorter.