New international route business models – courtesy of Time
La Compagnie, Yvelin’s new carrier (in photo below) runs 74-seat, all-business-class 757s between New York City and Paris, charging about $2,000 round-trip vs. $5,000 to $11,000 for the same seat on a larger carrier.
WOW recently launched four-times-a- week service from Baltimore and Boston to Reykjavík for as little as $400 round-trip, with continuing service to 18 other European cities. Unlike some long-haul carriers, WOW uses narrow-body Airbus A320s for the five-to-six-hour trip. Using smaller jets means you need fewer passengers to fill them, so there’s less capacity risk; charging 400 bucks round-trip almost guarantees you’ll get all the passengers you need. The WOW approach is the opposite of another Scandinavian carrier, the rapidly growing Norwegian Air Shuttle, although both are devotees of the ULCC model. Already a power in Europe’s short-haul market, Norwegian has taken advantage of global deregulation to take on long-haul, point-to-point service. The company is flying wide-body, 294-seat 787 Dreamliners to London from New York City and Los Angeles as well as Orlando and Fort Lauderdale, Fla. The company is also running from Oakland, Calif., to Oslo and Copenhagen. With 11 Dreamliners on the way, including the newest, longer-range 787-9s, Norwegian has big plans. “Everybody thinks that long-haul, low-cost is a different ball game,” says CEO Bjørn Kjos. “What drives cost is utilization and how you operate.”