Norwegian SWOT Analysis

Norwegian Air Shuttle ASA (NAS), often is known as the Norwegian. It was found in 1993 by Bjørn Kjos. It originated from the Busy Bee business of Norway. Norwegian started with three Fokker 50 machines (Nafarrate et al., p.1). In 2002, the airline changed most of its operating strategies and was repositioned as a low-cost airline. It operated from Oslo, Bergen, Stavanger, Trondheim, and Tromsø (Pike et al., 2010 p. 435). The firm was listed on the Oslo Stock Exchange in 2003. It is the second largest company in Scandinavia and stands as Europe’s third largest low-cost airline. In 2012, Norwegian bought the highest number of Europe's aircraft with both Airbus and Boeing purchasing 222 aircraft including 100 Boeing 737 MAX8, 100 Airbus A320neo and 22 Boeing 737-800 (Nafarrate et al., p.1). It has ordered Boeing 787-8 Dreamliner to focus on long-haul operations. It has plans to face-out the airline's older 737-300s and replace them with the most modern, environmentally friendly and efficient fleets for commercial services.

Current and Future Operations

Norwegian holds a number of Air Operator's Certificates (AOC). The certificates are technical and operational mandates that is given by the Authority of Civil Aviationthat grants the holder the privileges to conduct business flights (Obermeyer, Evangelinos, and Püschel, 2013, p.34). It also has two aviation operator ‘certificates in Norway, one that belongs to the Norwegian Air Norway (NAN) operatingatthe Scandinavian ports, and the other for Norwegian Air Shuttle (NAS),that operates outside Scandinavia (Storvold, 2006 et al. p.1751). It also has operator's certificate for Irish for its Norwegian Air Limited (NAI) in Dublin, London, United Kingdom, and Argentina (Pike et al. 2010, p.435). The airline has been free from severe threats and incidents involving planes and aircraft thus securing its operations. The Aviation Authority mandates all its programs, evaluations, and the qualification requirements.

The Corporation monitors its information and operations from its Flight Data Recorders in the company's aircraft. The evaluation is done to provide regulations on how aircraft are managed and flown. The crew members, maintenance staff, and the handling personnel utilise a system of web-based reporting that logs irregularities. Indeed, this data is an essential tool for analysing statistics and monitoring trends. The crafts are committed to a rigorous program of maintenance. The requirement of the manufacturer recommends the support to function in line with international authority regulations (EASA) (Williams, 2005, p.156). Norwegian conducts initial quality audits and consistent evaluation of its maintenance suppliers.

Norwegian Air picked up two Boeing 737 MAXs that are scheduled to operate in new transatlantic routes across the East Coast and also has plans for further expansion of its 787 services that will serve from Seattle to Europe. According to the management, the low-cost carrier, that is already commencing ticket sales for 787 Seattle for London flights will start its operations soon. The company has intentions of adding more routes to access more cities in Europe and gain the market advantage (Canelas and Ramos, 2016, p.89). It is important to note that the airline is coming up with bases of the pilot and cabin-crew at Stewart and Providence with an estimated number of sixty employees each. As Norwegian solicits for more market in the United States, it will open another 787 pilot and crew base in Florida, Oakland, and Los Angeles (Pike et al. 2010, p.435). The corporation has ordered a long-range version Airbus neo jet family, A321LR that uses auxiliary tanks of fuel to boost its 4600 miles range. The plane is intended to fly within Europe to other small cities in the Midwest of the United States of America. Undoubtedly, the above affirms that the firm has excellent plans for the future.

The Norwegian SWOT Analysis

Strengths

The Norwegian airline is one of the carriers that charges its customers low prices for the offered services in Europe after EasyJet and Ryanair. Regarding global ratings, the airline is the ninth-largest as well as low-cost in travel fees. It is the most significant service provider of the airline in Scandinavia. The company is deemed to be the eighth-largest airline in Europe with regards to the number of passengers in the Economy and Premium seats on the Boeing 787 Dreamliner fleet. The tickets are economical and offer flight entertainment, thirty-two inches of leg room, premium seats of about forty-six inches and in-flight meals (Graham, and Dennis, 2010, p.131). The meals can be ordered or pre-purchased from the plane's snack bar while a passenger is on his or seat. Norwegian airline indicates that its aircraft reduce jetlag with higher levels of oxygens, lower levels of noise, and dynamic LED lighting than other transatlantic flights. The Dreamliner's are eco-friendly and are fuel-efficient, thus, making it the most efficient fuel airline on transatlantic routes (Canelas and Ramos, 2016, p.89). These aspects give the airline a competitive advantage over other airlines acting as its value proposition. It runs a flyer program known as the Norwegian Reward. Passengers can earn points depending on their ticket prices and ticket class. Further, it provides free WiFi on its short services within Europe, the United States, and the Caribbean.

Weaknesses

All the flight operations of the airline are conducted under a single air operator's certificate making the services less efficient. Therefore, the management has set the main technical bases to address heavy maintenance and engine monitoring. Norwegian does not operate all its aircraft with economy class seating (Graham, and Dennis, 2010, p.131). For example, the Boeing 787 that only offers premium, two cabins, and economy. Furthermore, WiFi has not been installed for international long-haul flights (Salvanes, Steen, and Sørgard, 2003, p.387). On July 11th, 2017, a Norwegian shuttle Flight 4287, Boeing 737-8JP (LN-NHF) was involved in an accident after it ran off the way at Helsinki Airport, Finland (Bianchi, and Pike, 2011, p.736). Even though none of the passengers were injured, the reputation of the airline was adversely affected. Hence, making customers shun away and instead use its competitors' flights. Even though Norwegian is unique because it has a formidable reputation in Europe since passengers enjoy its services, the above weaknesses influence customers to opt for the company's competitors including the Royal Caribbean and Holland America Line.

Opportunities

Norwegian has partnered with UNICEF to support war-torn countries around the globe (Wilke, Majumdar, and Ochieng, 2014, p.138). The company, its workers, and passengers participate in charitable activities to deliver aid to these countries in need. Passengers contribute by purchasing tickets, meals, and onboard entertainment (Fenclova. and Coles, 2011 p.337). The two partners have conducted some humanitarian missions in the Central African Republic, Syrian, Jordan, Mali, and Yemen (Pike et al. 2010, p.437). They have facilitated emergency aid saving the lives of over 100000 children. Indeed, this has attracted more customers following the good service offered to the community resulting in increased profits.

Threats

In speculation, the basics of Norwegian airline transportation has undergone radical systemic changes for excellent aviation security (Wilke, Majumdar, and Ochieng, 2014, p.138). The threats that relate to competition, consumer patterns, route structure, and fleet decisions have been addressed by hiring professional and experienced managers. They compete directly with notable full-service carriers, for example, British Airways and the American Airlines among others. Thus, this has a significant impact on their business. They have to continually upgrade their systems and technologies to keep up with the competitors since they share the same haul routes. The British Airways has had an interest in considering the acquisition of the Norwegian airline (Xu, and Sun, 2009). Essentially, this has raised mixed reactions from people with customers expressing their disbelief and disappointments leading to loss of loyal customers.

The domestic ultra-low charges carriers have enabled the airline to enter new markets opportunities. Low-income people can enjoy the services of a plane. These services have been very transformative to the airline boosting its sales across its local market (Dobruszkes, 2013, p.78). These services have also enabled brand loyalty among its customers and attracted potential stakeholders. The Norwegian has chosen secondary airports at different destinations to reduce the landing fees, for instance, opting for landing in Oakland instead of San Francisco, and opting for Fort Lauderdale instead of Miami (Pike et al. 2010, p.438). The operations have been facilitated by Norwegian's full-reliant aircraft, seats of high-density, and low costs of operations. Therefore, its prices are much lower than its competitors. The services are best primarily for passengers that are willing to do without the luxuries of flat-beds, lounge access, and champagne.

To address the various aspects of the strengths, weaknesses, opportunities, and threats, the company has acquired professionals with vast experience to manage the industry. These leaders can forecast future predictions on how to run the business and the possible threats. For instance, the company has solicited for various new markets and ventured into new activities (Chen and Pawlikowski, 2015, p.86). It has gained more routes and upgraded its value proposition. It also has increased the number of its fleet to a sustainable number and improved its economic scales for profitable gain.

Future Traffic Levels and the Current Routes

The Norwegian airline has impacted both the domestic and international markets by changing its transportation system (Klein-Paste et al. 2012 p.31). It has since announced trans-Atlantic services from big cities like as Chicago, Denver, and Austin. As the air shuttle accumulates planes, it has been expanding to other new destinations at a significant pace, from the smaller United States cities, South-end Asia to Africa. The airline anticipates to start its services in and around Argentina, a move that will support approximately seventy aircraft (Pike et al. 2010, p.436). The firm's London Gatwick long-haul 787 destinations currently include Austin, Boston, and Buenos Aires (Bianchi and Pike, 2011, p.738). Norwegian also operates from Oslo, Rome, Paris, Stockholm, Copenhagen, and United States.

The Economic and Current Financial Situation of the Norwegian Airline

Several airline industries have changed meteors impacting their businesses. However, toxic financial circumstances have hindered development in those airlines. Norwegian airline has experienced successful outcomes by engaging strong personnel management. It is in an environment where competition is relatively stable (Kjærnes, and Qvist, 2011, p.169). The administration of the industry analysts has not noticed any critical upheavals with regards to its horizon, saving the hand-wringing on shifts in revenue per mile, and the general labour agreements (Salvanes, Steen, and Sørgard, 2003, p.383). In Europe, the prices of oil are not a significant threat and capacity control is also rational. Therefore, difficult issues between airlines are generally territorial and squabble settled faster (Dobruszkes, 2013, p.75). The organisation has addressed the economic meteors by fixing the business environment. If Norwegian airline was in a bad financial position, its shareholders and beneficiaries would accept a takeover offer from the British Airline (Jacobsen, nd). The airline has grown within a short period spreading its wings to other realms of the business.

Even though the airline's financial situation is not readily available, its development is moving faster aiming for more flights with low-cost-carrier. The management is happy with the financial position of the company. The Norwegian has a responsibility to finance all its aircraft and most of its planes (Kulmala et al., 2009, p.2826). The company can pay its bills and employees in time and venture into new markets. For instance, it has a plan to introduce thirty-eight nonstop routes through America, London, and Paris. The departure of planes will witness transatlantic flights connect people of diverse groups to improve trade partnership and bilateral relationships especially within Oakland, Las Vegas, Los Angeles, Orlando, New York, Puerto Rico, and Puerto Rico (Chen, and Pawlikowski, 2015, p.56). The airline will also offer direct seasonal routes to the French Caribbean from Washington D.C., New York, and Boston.

Critical Analysis of the Airline Prediction

Norwegian is usually under investor scrutiny because of its large order including more than 200 aircraft split that entails Airbus SE and Boeing Co., supporting a universal growth spurt (Daft and Albers, 2015 p.9). Caution should be observed even with the existence of low prices of fuel and costs of labour since the competitive capacity, and cheap tickets may negatively affect the long-term financial impact (Wheelen, and Hunger, 2011 p.14). Indeed, this may hinder stability in tough economic times globally or around the Atlantic. The airline has poached pilots from other airlines, for example, the Ryanair airline. Poaching weakens other competitors (Somaya, and Williamson, 2008, p.29). The firm's strategy to negotiate deals such as passenger transfer and connecting flights would see it spend life in their operations. The airline should also formalise its assignments and collect new charges given that in Europe some passengers fly discount carriers and are self-connected at airports.

The airline should determine the external and internal factors to meet its essential purpose and impact its ability to realise the set goals for its system of quality management. The company should streamline its long-term developments projects by ensuring it has clear mission and vision statements (Noe et al. 2006, p.34). The firm should employ qualified personnel, and define clear roles and responsibility to ensure there is accountability in their operations. Customer satisfaction must be met at all costs. The company must also embrace technology and innovation to ensure it remains dominant in the market against the competitors. The allocation of resources and constant evaluation of progress regarding strategic objectives will be a critical feature for the company (Stevenson, Hojati, and Cao, 2007, p.14). Employees must be provided with the right tools, equipment, and training to undertake their daily tasks and roles. The technicians and engineers of the planes must be given protective gears and means to avoid possible accidents.

Departmental managers should be supported by the top management and facilitated with adequate budgeting, power, and authority to motivate and direct the subordinates. Constant evaluation of the company's different departments’ performance and organisational goals will allow the airline to monitor, upgrade, and adjust any facet of the business that is moving in the wrong direction (Wheelen, and Hunger, 2011 p.14). The company should consider possible changes that may result from the ongoing assessment like tactical adjustments, training, and development. All the stakeholders have a responsibility to ensure the goals of the firm are met within the set timeline. Every individual must support one another in collaboration towards a sustainable objective. As a result, the Norwegian airline will stay as one of the market leaders and maintain the attained competitive advantage.

References

Bianchi, C. and Pike, S., 2011. Antecedents of destination brand loyalty for a long-haul market: Australia's destination loyalty among Chilean travelers. Journal of Travel & Tourism Marketing. 28(7), pp.736-750.

Canelas, H. and Ramos, P., 2016. Consolidation in Europe's Airline Industry. Boston: The Boston Consulting Group.

Chen, L. and Pawlikowski, H., 2015. The expansion of low-cost carriers into the long-haul market: a strategic analysis of Norwegian Air Shuttle ASA (Master's thesis).

Daft, J. and Albers, S., 2015. An empirical analysis of airline business model convergence. Journal of Air Transport Management. 46, pp.3-11.

Dobruszkes, F., 2013. The geography of European low-cost airline networks: a contemporary analysis. Journal of Transport Geography. 28, pp.75-88.

Fenclova, E. and Coles, T., 2011. Charitable Partnerships among Travel and Tourism Businesses: Perspectives from Low‐Fares Airlines. International Journal of Tourism Research. 13(4), pp.337-354.

Graham, A. and Dennis, N., 2010. The impact of low-cost airline operations to Malta. Journal of Air Transport Management. 16(3), pp.127-136.

Jacobsen, I.F., A Financial and Strategic Analysis of Norwegian Air Shuttle ASA.

Kjærnes, K. and Qvist, C., 2011. Valuation of Norwegian Air Shuttle ASA. Copenhagen Business School.

Klein-Paste, A., Huseby, A.B., Anderson, J.D., Giesman, P., Bugge, H.J. and Langedahl, T.B., 2012. Braking performance of commercial airplanes during operation on winter contaminated runways. Cold Regions Science and Technology. 79, pp.29-37.

Kulmala, M., Asmi, A., Lappalainen, H.K., Carslaw, K.S., Pöschl, U., Baltensperger, U., Hov, Ø., Brenquier, J.L., Pandis, S.N., Facchini, M.C. and Hansson, H.C., 2009. Introduction: European Integrated Project on Aerosol Cloud Climate and Air Quality interactions (EUCAARI)–integrating aerosol research from nano to global scales. Atmospheric Chemistry and Physics. 9(8), pp.2825-2841.

Nafarrate, G., Gran, E. L., Ferreira, N., Manresa, G. D., Amat, O., & Parrondo, L. (n.d.). NORWEGIAN AIR SHUTTLE ASA, 1-10. Retrieved from https://www.upf.edu/documents/2963149/3508563/65en.pdf

Noe, R., Hollenbeck, J., Gerhart, B., and Wright, P., 2006. Human Resources Management: Gaining a Competitive Advantage, Tenth Global Edition. McGraw-Hill Education.

Obermeyer, A., Evangelinos, C., and Püschel, R., 2013. Price dispersion and competition in European airline markets. Journal of Air Transport Management.

26, pp.31-34.

Pike, S., Bianchi, C., Kerr, G. and Patti, C., 2010. Consumer-based brand equity for Australia as a long-haul tourism destination in an emerging market. International marketing review. 27(4), pp.434-449.

Salvanes, K.G., Steen, F. and Sørgard, L., 2003. Collude, compete, or both? Deregulation in the Norwegian airline industry. Journal of Transport Economics and Policy (JTEP). 37(3), pp.383-416.

Somaya, D. and Williamson, I.O., 2008. Rethinking the war for talent'. MIT Sloan Management Review. 49(4), p.29.

Stevenson, W.J., Hojati, M. and Cao, J., 2007. Operations management (Vol. 8). Boston: McGraw-Hill/Irwin.

Storvold, R., Malnes, E., Larsen, Y., Høgda, K.A., Hamran, S.E., Mueller, K. and Langley, K.A., 2006. SAR remote sensing of snow parameters in Norwegian areas—Current status and future perspective. Journal of Electromagnetic Waves and Applications. 20(13), pp.1751-1759.

Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy. Pearson Education India.

Wilke, S., Majumdar, A. and Ochieng, W.Y., 2014. A framework for assessing the quality of aviation safety databases. Safety Science. 63, pp.133-145.

Williams, G., 2005. European experience with direct subsidization of air services. Public Money and Management. 25(3), pp.155-161.

Xu, Y. and Sun, Y., 2009. Mergers and Acquisitions of North American and European Airline Industry: An Event Study Evidence on Value Creation.