Norwegian Air to scrap Singapore-London service in January 2019

Singapore

BUDGET carrier Norwegian Air will axe its direct service between Singapore and London in January 2019, after launching the route to a fanfare a year ago.

The retreat will likely benefit other carriers who fly the Singapore-London route, including Qantas, the Singapore Airlines (SIA) Group and the Gulf carriers.

In response to queries, a spokesperson for Norwegian said: "We continually evaluate our global network to ensure that we operate routes in response to customer demand. We have taken the decision to no longer operate our Gatwick to Singapore service from 12th January 2019 and use this capacity elsewhere on our network. Customers who have booked to fly after this period will be offered alternative options to reach their destination or a full refund."

While SIA and British Airways operate direct flights between the two cities, they generally do not compete with Norwegian for the same segment of travellers.

Nonetheless, Norwegian's move takes pressure off the SIA Group, which might have had to retaliate with its own budget arm Scoot if Norwegian had been successful with its London service and went on to add more links to Europe, said Centre for Asia Pacific Aviation (CAPA) analyst Brendan Sobie. "SIA doesn't have to respond defensively," he added.

In late September last year, Norwegian started operating direct flights to Changi Airport from London's Gatwick four times a week. Using the Dreamliner, Norwegian offers 344 seats in a two-class configuration of economy and premium.

A Changi Airport Group (CAG) spokesperson said: "Since the commencement of services on 29 Sept 2017, there has been a stable growth in passenger traffic between Singapore and London. We will continue to engage the airline and hope that the service will resume at a later date."

Mr Sobie noted that operating long-haul routes can be challenging for a low-cost carrier (LCC) given the competition from full-service carriers such as Emirates and Qatar Airways which offer cheap fares to Europe via the Middle East.

"It's hard for an LCC to differentiate itself from a full service carrier from a cost perspective," he said, also pointing to rising fuel prices and the relatively higher costs of operating out of Changi Airport vis-a-vis some regional airports. "It's hard for Norwegian to price (fares) at a point where it can stimulate demand but also cover all the costs."

On the other hand, the aggressively expanding Gulf carriers have the advantage of big networks, and better frequencies. Norwegian has also been turning its focus to launching flights between Europe and the Americas, which offer better yields.

In Asia, Norwegian operates flights to Bangkok from its hubs in Oslo, Copenhagen and Stockholm. It is reportedly planning to launch flights to Krabi next month.

Scoot and Jetstar are presently the only budget carriers offering long-haul flights out of Changi Airport. SIA-owned Scoot flies to long-haul destinations such as Athens, Berlin and Honolulu (via Osaka), while Jetstar Airways flies to Melbourne out of Singapore. The latter suspended its Singapore-Auckland route in 2014 due to poor performance.

In 2012, AirAsia's long-haul unit, Air Asia X, was forced to pull the plug on its Kuala Lumpur-London service amid sky-high fuel prices.

Shares in SIA closed at S$9.63 on Monday, up one cent.