Norwegian Air Granted London Heathrow Slots?!

Filed Under: Norwegian

Norwegian has just won the (slot) lottery, which is exciting for them, though I do wonder how exactly it fits into their overall strategy.

Heathrow Airport Is Heavily Slot Controlled

London Heathrow is one of the world’s most slot controlled airports. As of now the airport only has two runways, yet just about every airline wants to fly to London. This means that airlines have to get “slots” to fly to Heathrow.

For the most part airlines buy these, and then they “own” them, meaning that they can also sell them to other airlines. For example, in 2016 Oman Air made headlines when they paid $75 million for a Heathrow slot, as they purchased it from Air France-KLM.

Oman Air paid $75 million for one daily Heathrow slot pair

Keep in mind that Heathrow is expected to eventually get a third runway (maybe… who knows…), and that will greatly increase capacity at the airport, and in turn should reduce the value of slots. That’s simple supply and demand.

Virgin Atlantic has shared some very optimistic growth aspirations stemming from a third runway, which will almost certainly not come to fruition.

Norwegian Flies Out Of Gatwick, And Is Trying To Become Profitable

Norwegian has become a huge long haul airline out of the UK, and the airline exclusively operates out of London Gatwick as far as London-area airports go, where slots aren’t quite as expensive.

The airline has been struggling financially, and has been trying to focus on profitability over growth, given that they’ve repeatedly been on the verge of going out of business.

The airline is constantly optimizing their operations to improve profitability. I’m still not convinced that they have an independent future long-term, but they’re certainly taking the right steps.

Norwegian 787-9

Norwegian Picks Up Six Weekly Heathrow Slots

This is where this gets interesting. Airport Coordination Limited has released their initial report for Heathrow slots for the summer of 2020. This is standard, and gives you a rundown of what airlines have slots at the airport for next summer.

Note that while slots at Heathrow have to be purchased, there’s also a limited lottery for airlines to obtain slots. It’s really hard to “win” it, but these slots are allocated at times.

For example, JetBlue requested 70 weekly slots (that equates to five roundtrip flights per day, as you need a slot for both a landing and takeoff) in this lottery, and they were granted zero of them. We know the airline wants to start flying to London in 2021, but we don’t yet know to which airport.

JetBlue wants to fly to London in the next couple of years

Then there’s Norwegian. Norwegian requested 14 weekly slots at Heathrow for summer of 2020 (that’s one roundtrip flight per day), and they ended up being granted six weekly slots (meaning three roundtrips per week).

What Are Norwegian’s Plans At Heathrow?

I’m sure soon enough we’ll learn about Norwegian’s plans at Heathrow. I do wonder if Norwegian had concrete plans for Heathrow slots, or if they figured they might as well throw their hat in the ring, and weren’t necessarily expecting to be chosen.

While Heathrow is no doubt considered the “premium” London airport, I’m not sure I get what Norwegian is hoping to accomplish:

  • Norwegian has no connectivity at Heathrow, while they have lots of connectivity at Gatwick
  • Arguably a 3x weekly flight out of Heathrow isn’t exactly going to build up much of a presence there, or pose a threat to British Airways or Virgin Atlantic
  • Presumably the operating costs for Norwegian will be much higher out of Heathrow, purely due to economies of scale; it’s more expensive to do everything when you have a flight every couple of days, rather than when you have dozens of flights per day

Norwegian 787-9 premium economy

Bottom Line

Norwegian has been granted slots to operate a total of three roundtrip flights per week out of Heathrow as of the summer of 2020. While Heathrow slots are generally incredibly valuable, one has to wonder what exactly Norwegian is planning on doing here.

This should be an interesting one to watch…

What do you make of Norwegian’s Heathrow slot situation?

Comments
  1. Wouldn’t be shocked if they sold them – would help with their debt issues – or if they entered the lottery as part of their new venture with JetBlue in the hopes that JB will buy or inherit the slots.

  2. @mkcol my first thought when reading this too. They may just have entered knowing if they got slot they could just sell them on.

    Out of interest, where is the space for these slots generated from?

  3. Heathrow actually has slots available. They are just not slot pairs that are economically viable (viz. Arrival and departure that can be many hours apart or on different days or only partial season), and most airlines don’t care to leave an aircraft parked sometimes for 2 or more days before the next slot is available. If someone wants ad-hoc or non-series Heathrow slots, they are there for the asking.

    Also, you can’t sell slots until you have actually used them for 2 seasons.

  4. I live in another part of the UK and any tome I’ve flown to Heathrow to connect, it’s always been delayed. Usually late take off and then also in a holding pattern waiting to land. Nearly missed my honeymoon flight to Bilbao because of this – thankfully we just had hand luggage so made it, despite having to change terminals. Do long haul flights/larger air craft get priority landing?

    It’s always been BA that I’ve flown GLA-LHW with. If I’m going to central London, I get the train as it’s 4.5 hours direct to Euston.

  5. A bit off topic, but Norwegian announced earlier this week that they will cut every single long-haul flight from the Nordics. Got a lot of attention in Swedish and Norwegian press.

  6. Wow this is crazy, if they intend to use them I can only imagine they go for LHR/JFK but that still doesn’t make much sense 3x weekly. Has anyone reported what the timings on those slots are?

  7. @Lukas

    No they are cutting Stockholm and Copenhagen. Oslo still remains and is possibly getting more routes. Going hub and spoke in the Nordics, with OSL as the hub.

  8. This makes literally zero sense they have no hope of ever making money on these out of Heathrow. This seems like they are sealing their own fate and are going out with a big, expensive and above all pointless bang

    Thinking long term I believe BA would rather allow Virgin’s massive expansion than allow budget competitors into “fortress Heathrow”. Think about I believe BA have accepted that with runway 3 they are going to have new competitors but they’d prefer it to be Virgin instead of budget competitors such as Norwegian and easyJet. If anything this whole Norwegian situation could work in their favour. They could paint it as budget doesn’t work at Heathrow.

    This is not going to work for Norwegian. AT. ALL

  9. Perhaps Norwegian is looking to use these slots for short haul flights intra Europe for example from Oslo to LHR. Not sure if this makes sense based on the cost of the slots and only operating 1 flight 3X weekly, but perhaps they feel they can cater to more business travelers as well as pickup additional leisure travelers who would prefer to fly to LHR over LGW.

  10. Now that they were granted these 6 slots out of LHR (for free). Does that mean that they can’t sell them and make a profit out of them?

  11. For those who know airline history and the history of slots at LHR. You grab what you can and then trade, move around (you nudge) and or lease.

    You start with what you can. There is always a bigger plan.

    Look up VS and what they did to grab slot pairs, one at a time to slowly move services one by one to LHR….a decades long process. DL and CO are two prime examples of going from nothing. It was bit by bit until they could close LGW. Not saying DY will close LGW, but LHR is important.

    No different that what has and continues to take place at HND in Tokyo.

    @Lukas – This is why news gets turned into garbage. NOT OSL smh!!

  12. @mkcol
    MCO would make sense, Virgin and BA don’t fly LHR to MCO direct, and with only 3 weekly flights, a leisure destination would be ideal. I saw Virgin’s Orlando 747 recently, it’s livery is totally decked out in a Star Wars theme for the new area in Disney, but it looks like it goes to Gatwick.

  13. If it is indeed MCO, that would be great since every airline flying to London (which there are quite a few flights to) are to LGW. A LHR-MCO would definitely help Norwegian take some more market share. I’ve seen up to 3 Virgin 747 flights from LGW and 2 BA 777’s in the summer peak time. I’m pretty sure London is MCO’s largest international destination (and 2nd largest overall, next to NYC).

  14. Somebody upthread mentioned that the slot pairs have to be used for two seasons and then can be sold. This could make the LHR-MCO flight a reasonable risk: They can try it, and there’s a valuable backstop if it doesn’t work out.

  15. It’s too bad they’re axing the direct flights to the nordics: from the west coast, the only nonstop to ARN will be missed.

  16. My guess:

    1) W pattern like LGW-JFK-LHR-JFK-LGW – not sure what they would need in LHR besides 3rd party services. If staff is based in LGW, all it needs is a shuttle to bring them to and pick them up from LHR – or is that pieced together too simple?

    or

    2) use it intra-european until they get lucky again or a 3rd runway opens.

  17. @eurojoe

    i hadn’t thought of a routing like that

    LGW – JFK/MCO – LHR – JFK/MCO – LGW

    it could work well for them

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