For residents in Los Angeles, New York, South Florida and other major metropolitan areas, catching a flight to Europe has likely never been cheaper, thanks in part to the rise of a new breed of low-cost international airlines headlined by Norwegian Air Shuttle.
This group, which also includes Icelandair and WOW air, has brought the unbundled model used domestically by airlines like Spirit and Frontier to the trans-Atlantic market, offering one-way fares as low as $180 targeted toward leisure travelers.
The trio of airlines has grown rapidly over the last five years and now combine to connect more than a dozen U.S. cities to London, Scandinavia and beyond. Although they represent a sliver of the total trans-Atlantic traffic, they exert a disproportionate downward pull on fares and have eyes on continued expansion in the coming years.
But so far, North Texas travelers have been left out of the low-fare frenzy, due to a combination of geography, competition and market dynamics. And there’s no sign any of these airlines will be touching down at local airports any time soon.
“We won’t see the benefit of this as much because really Dallas is perfect for business long-haul travel but not great for leisure long-haul. The coasts are better for [that],” said Rick Seaney, CEO and co-founder of Dallas-based booking site FareCompare.
The idea of low-cost trans-Atlantic air service traces back decades to the likes of Laker Airways and People Express Airlines. But those carriers never amounted to more than a few planes serving limited routes before being driven out of the market in the 1980s by larger airlines, said aviation analyst Robert Mann.
There was also Icelandic Airlines, a precursor to today's Icelandair, which became known in the 1960s as the "Hippie Express" for shuttling American college students to Europe on the cheap.
Norwegian Air, which launched U.S. service in 2013, has made use of the new generation of highly-efficient planes and engines, like the Boeing 787, to make long-haul flights more economical.
Icelandair and WOW air, which is also based out of Iceland, have used geography to connect U.S. travelers to Europe with one-stop service through the island’s Keflavik International Airport. Like the rest of the airline industry, all three have benefited from low fuel prices over the last several years.
Initially, the airlines largely focused on coastal U.S. cities, including Los Angeles, San Francisco, Boston, New York, Washington, D.C., and Miami. But they’re slowly adding more inland destinations such as Minneapolis, Denver and Pittsburgh.
Their route maps tend to favor cities with large volumes of originating passengers, including leisure markets like Orlando and Las Vegas, as well as regions with secondary airports like Oakland, Calif., and Fort Lauderdale, Fla., that don’t have a dominant trans-Atlantic carrier.
Norwegian in particular is poised for even more growth after the Department of Transportation this month approved the company’s Irish subsidiary Norwegian Air International to begin operating flights to the U.S.
The decision, which took three years of deliberation, was fiercely contested by major U.S. airlines and their unions, who warned that the arrangement would undermine wages and safety standards -- claims Norwegian Air denied.
The approval opens the door for Norwegian to connect U.S. passengers to even more destinations in Europe. The carrier plans to add 20 more 787s to its long-haul fleet over the next two years and is establishing crew bases in Fort Lauderdale and New York.
While the growth of these airlines has caught the attention of legacy U.S. carriers, they’re unlikely to threaten the dominance of antitrust-immunized partnerships like the one between American Airlines and British Airways on trans-Atlantic flights.
Still, these low-cost options can cause headaches as they siphon off price-sensitive customers needed to fill out legacy carriers’ planes carrying high-value business travelers.
That could prompt carriers such as American, Delta and United to expand the new no-frills basic economy fares that are being introduced on domestic flights to their international routes, Mann said. Much like their low-cost competitors, these basic economy fares offer a low ticket price, but charge additional fees for everything from checked bags to seat assignments.
As for North Texas, the region lacks most of the market characteristics that have drawn in Norwegian Air and its brethren.
DFW International Airport is a major hub for connecting travel, but lacks the volume of originating traffic or draw for leisure travelers of other airports around the country. There’s also the matter of American Airlines’ dominance, a battle low-cost carriers so far have avoided at DFW and at Delta’s hub in Atlanta.
“You can kind of poke at the dragon from a slight distance, but you really don’t want to go in its face,” Mann said. “It’s just not a good idea.”
Dallas does have a secondary airport in Love Field, but international flights aren’t allowed there under terms of the Wright Amendment Reform Act.
That means North Texans wanting to head to Europe are for now largely left with American Airlines or one of its Oneworld alliance partners, unless they want to get creative.
“As a leisure consumer,” Seaney said, “one of the options you have is splitting your ticket purchase up by getting to the coast and then buying one of these lower-cost tickets to Europe.”
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