Assignment 5 Airline Case Study. Norwegian Air Shuttle

Norwegian Air Shuttle
Student’s Name
Institutional Affiliation

Norwegian Air Shuttle
A Brief History of the Norwegian Air Shuttle (NAS)
The establishment of the Norwegian Air Shuttle (NAS) took place in 1993. Since the airline was founded, it has been growing and has become among the biggest low-cost carriers (LCC) globally. In 2002, NAS added Boeing 737 in its fleet, which is the reason why it reduced its fares. The airline keeps introducing new aircraft and launching new routes in South America, the United States of America (USA), Europe, and Asia. Currently, NAS has approximately 160 fuel-efficient aircraft that has a mean age of 4.6 years. The new aircraft enable NAS to offer excellent services to its customers, preserve the environment due to reduced air pollution, and maintain its vision, which is providing affordable fares to all individuals. The airline employs around 11,000 employees. Customers can choose from 500 routes and more than 150 destinations, namely the Middle East, Canada, the USA, Asia, North Africa, South America, and Europe. NAS is one of the best and LCC worldwide that serves millions of passengers without compromising its high-quality services, which keep clients coming back.


Figure 1: NAS at a Glance.
Route Architecture
The majority of people like NAS since it offers affordable and high-quality services to its customers flown using numerous routes. For instance, clients can choose over 500 routes. For this reason, individuals can get connected to various destinations by using pathways of their choice. Additionally, NAS offers the best fares as compared to other airlines that provide similar services. The following is NAS route architecture showing some of the airline destinations.


Figure 1: NAS Route Architecture.
In most cases, a month does not end without NAS announcing a new long-haul route. Despite the availability of other LCC in Europe, such as Wizz, Vueling, and Ryanair, many individuals prefer NAS due to its routes flexibility (Coolidge, 2018). NAS offers outstanding services and has developed a superb reputation over time, which makes it unique. Consequently, NAS operates on different routes, which makes it convenient for its customers worldwide.
Fleet Type and Size
When it comes to the fleet, NAS keeps adding new and fuel-efficient aircraft in its fleet to ensure that it gives its customers the best services. The airline understands the significance of acquiring new aircraft since they are environmentally friendly, clients like them since they are comfortable, and NAS maintains its vision of providing affordable fares to all people. The table below portrays some of the fleet belonging to NAS.


Figure 2: NAS Fleet Matrix.


Figure 3: NAS Fleet List


Figure 4: Pictures of Boeing 737-800 and 737 Max 8.
As NAS continues to grow, it brings on board new aircraft, which make the airline able to offer low fares as compared to its competitors. For instance, in 1995, NAS’ revenues were NOK 86.6 million, where it made a profit of 2.9 million. As such, NAS added its fourth Fokker 50. By 1999, NAS had 6 Fokker 50s, and in 20,000 flights it flew around 500,000 passengers. In the same year, the firm had a revenue of 172 million and made a profit of 13 million (Dobruszkes, Givoni, & Vowles, 2017). As such, NAS adds new aircraft depending on the market demand so that it can provide high-quality services to its clients.
Product
The primary product offered by NAS is safe, comfortable, and convenient flights from one location to another. All the flight operations by this airline, including those of its subsidiaries are handled by air operator’s certificate. NAS has all relevant documents that are required for an airline to operate and has received various awards for outstanding customer services. The LCC emphasizes affordable fares so that almost everyone can manage a flight. NAS has two classes of clients that include premium and economy. In particular, the premium class is available on Boeing 787 aircraft and has seats configured in 2-3-2 layout. Additionally, it has fifty-five inches of pitch configured with thirty-five premium seats, drinks, headsets, blankets, seat selection, three-course meals, and two slots of checked baggage. An economy class has a 3-3 layout and is provided by Boeing 737 Max and 737 (Goldstein, 2018). Moreover, it has 29 inches of pitch, seat selection, drinks, onboard snacks, checked baggage for an extra cost, and pre-ordered meals.
Cost structure
As discussed earlier, the vision of NAS is to offer affordable fares for all individuals using its aircraft worldwide. For this reason, the NAS cost structure is based on low-cost flights. The airline’s business model is driven by competitive low fares and high customer volume. Specifically, NAS realized that one of the most effective ways to keep existing clients and attract new ones is by providing low-cost flights. Affordable fares bring new customers on board since almost everyone likes high-quality and cheap products. The “low-cost brand awareness” fosters high capacity and high load factor per flight (Soyk, Ringbeck, & Spinler, 2017). With this cost structure, NAS has managed to outdo its business rivals, namely Braathens and Busy Bee. One of the strategies that make NAS’ low-cost structure feasible is that it hires employees from different places, such as Bangkok and Thailand, and pays them wages that are below the minimum level in Norway or other regions in Europe.
Fare Structure
One of the primary reason why the majority of people like NAS is due to its affordable fares. For local flights, NAS has LowFare, LowFare+, and Flex flight categories. However, for international long-hauls, the airline has LowFare, LowFare+, Flex, Premium, and PremiumFlex. These different categories charge distinct prices, which enable passengers to choose the ones convenient to them and which they can afford. For example, LowFare provides one underseat 10kgs bag while LowFare+ offers two bags and one checked baggage of 23kgs. The premium has one underseat and one overhead bag not more than 15kgs and two checked baggage of 23kgs each (Norwegian Air Shuttle ASA, 2018). Therefore, NAS has affordable fares for both local and international flights, which makes the majority of clients to use it at all times.
Distribution
When it comes to products and services distribution, NAS ranks among the top airlines. According to Bjorn Kjos, the former chief executive officer (CEO) and founder of NAS, the airline continued growth and success in the aviation industry has attracted more attention from its competitors. Specifically, it is the only airline with the newest aircraft in Europe, which means that it offers the swiftest, efficient, and most effective services to its customers. In other words, the former CEO asserted that NAS is capable of providing affordable fares without polluting the environment. Both short and long-haul flights are distributed depending on customer demand. Since the airline began with the primary objective of offering affordable fares, NAS disrupted the aviation industry when it started operating a few decades ago (Fageda, Suau-Sanchez, & Mason, 2015). Through the effective and efficient distribution of its services, the company has managed to become one of the best in Europe and internationally. Besides, some clients do not believe that they get all the comfort and best customer services with reduced fares at NAS, which is hard to get from somewhere else. 
Promotion
The main promotion stra...