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Discount carrier Norwegian Air scrambles to make up for grounded 737s on Hamilton-Dublin route

Discount carrier Norwegian Air scrambles to make up for grounded 737s on Hamilton-Dublin route
Business
When Marc Gibbons and his friends heard there was a new, cheaper way to get to and from their hometown of Dublin, they were delighted. After all, crossing the Atlantic can cost upwards of $1,000.

Seeing a round-trip Norwegian Air flight between Hamilton’s John C. Munro International Airport and Dublin for just over $500 including taxes and fees seemed almost too good to be true.

A grounded Boeing 737 Max 8 passenger plane of the low-cost airline Norwegian is parked at the tarmac at Vantaa airport in Vantaa near Helsinki, Finland this month.  (HEIKKI SAUKKOMAA / AFP/GETTY IMAGES)

Now, because of the worldwide grounding of the Boeing 737 Max 8 prompted by a pair of deadly crashes in Indonesia and Ethiopia, the flight Gibbons’ two friends were scheduled to take April 1 from Dublin to visit their Toronto-based friend is in question. The discount carrier relies heavily on the 737 Max and had been planning to use it for the Hamilton-Dublin route.

“They were going to be immigrating here. I’m not sure how this affects them, exactly,” said Gibbons, manager of P.J. O’Brien Irish Pub and Restaurant in Toronto.

The new route was scheduled to start March 31. For now, Norwegian — one of the world’s fastest-growing carriers — says it will try to use other planes on the route. Canada’s two biggest airlines have also been heavily affected by the grounding. Because it’s still unclear when the grounding will end, Air Canada says it’s planning to fly without the Max at least until July 1. WestJet, meanwhile, says it expects to be able to rearrange its fleet and cover roughly 75 per cent of the flights it had expected to use the Max for.

Norwegian is making no promises that every flight will be replaced.

“Norwegian is working on reallocating its fleet options to cover the route and minimize the inconvenience for affected passengers. An update will be provided in the next few days as Norwegian is working on providing a solution during this extraordinary situation,” Norwegian spokesperson Anders Lindstrom said in an emailed statement.

“The airline is committed to the safety and security of all of its customers as well as colleagues, and it will do its best to minimize the inconvenience caused by this disruption,” Lindstrom added.

The deep discount fare is now showing up as sold-out on the Norwegian site, with only a “flexible” fare of more than $2,000 currently available. Lindstrom says that’s because the airline’s priority is helping customers who’ve already bought their tickets, while the implications of the grounding are worked out.

In addition to 18 of the grounded 737 Max planes, Norwegian’s fleet includes two other planes, both also made by Boeing — the 737-800, and the 787 Dreamliner. It has 33 of the Dreamliners, and 118 of the 737-800s. The Dreamliner carries 291 passengers, while the Max 8 and 737-800 both carry up to 189.

If the grounding is short-lived, there shouldn’t be too much disruption, but a longer interruption could wreak havoc, according to Preben Rasch-Olsen, a research analyst with Carnegie, who covers Norwegian Air. Because there aren’t as many travellers in the airline’s Scandinavian home turf at this time of year, they’ll likely have enough planes to go around for the moment, Rasch-Olsen said.

“March is a very low-season month in the Nordics, and hence the grounding of Max planes should be compensated with existing capacity. However — if this stretches into Easter, and more importantly, June-August — it will start to become costly for Norwegian,” said Rasch-Olsen.

On the other hand, argued HSBC analyst Andrew Lobbenberg, the grounding could help Norwegian, which already owns too many planes, and has more on the way. With the grounding, they might not have to pay for the new ones as soon, Lobbenberg said. It might also be able to sell some of its existing planes to other airlines who need to find replacements — temporary or otherwise — for their Max planes.

“Ironically, we think this situation could be to Norwegian’s strategic advantage. Norwegian’s key challenge lies in its fleet and order book, which are far too big for its network needs and a challenge to its financial position,” Lobbenberg said in a report.

Still, Lobbenberg said, the grounding will likely be expensive in the short term for Norwegian, which he said is the largest operator of the Max in Europe.
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