Norwegian has been trying to optimize their route network lately, as they’ve focused on profitability rather than growth.
Norwegian’s Airport Adjustments
One interesting change Norwegian has made in the past 12 months is some of the airports they fly to. No, I’m not talking about the general regions they fly to as such (though they’ve changed some of those as well), but rather the airports in a region they choose to serve.
Often we see low cost carriers fly to airports with lower fees, rather than the major international hubs in a region. Back in the day we saw Norwegian exclusively fly to Oakland in the Bay Area, and fly to Fort Lauderdale in South Florida.
About a year ago, Norwegian announced that they’d move their London Gatwick flights from Oakland to San Francisco, and from Fort Lauderdale to Miami.
I guess this has been a success, because the airline is now extending that concept further.
Norwegian Moving All Flights From OAK To SFO
Norwegian has announced that they’ll be consolidating all of their Bay Area flights to SFO as of the summer of 2020, meaning they’ll be pulling out of OAK.
In the summer of 2020 Norwegian will fly from San Francisco to Barcelona, London, Oslo, Paris, and Rome. The routes from Barcelona, London, and Paris have already been moved to San Francisco, and the other two routes will be moved as well.
Matthew Wood, Norwegian’s SVP of Commercial, had the following to say:
“For the summer season 2020 and beyond, we will offer all our five Bay Area flights from San Francisco International Airport, which will better position us for our return to profitability. We would like to thank our partners and friends at Oakland International Airport for their tremendous support during our operation from May 2014 to just a few months ago. As the largest foreign airline in the Bay Area, we look forward to offer American travellers unbeatable fares matched with our award-winning onboard product and service out of SFO.”
What’s Motivating The Move To SFO?
At the time when Norwegian first announced their relocation to Miami and San Francisco, they gave a few reasons for this, and I suspect that still rings true:
- Better yields — while fees are often higher for the primary international airpots in a region, airlines can often also get better yields (meaning they can charge more for tickets)
- Better cargo opportunities — often there are more cargo opportunities at the major international hubs in a region
- Visibility in more search engines — while some searches will show flights out of Oakland when searching “San Francisco,” others won’t, so you’re opening yourself up to a larger customer base by flying out of the primary international airport in a region
- Attracting premium passengers — this is along the lines of higher yields, but many business travelers prefer the perceived convenience of traveling out of the major international airport in a region, rather than a secondary airport
Oakland Airport’s Rough International Journey
Oakland has had a really rough time when it comes to their long haul international flights. In addition to Norwegian flights, just a couple of years ago:
- British Airways flew from London Gatwick to Oakland, but that flight was canceled
- LEVEL flew from Barcelona to Oakland, but that flight was moved to San Francisco
At this point, the only long haul flight out of Oakland that hasn’t been formally canceled is Azores Airlines’ flight to Terceira, though best I can tell that’s not actually even in the schedule for this coming summer.
So at this point has Oakland completely lost long haul flights? If so, that’s rough…
Bottom Line
It seems that the switch to SFO has worked out well for Norwegian, which shows that clearly the upsides of flying out of SFO outweigh the higher fees associated with it.
Furthermore, if they’re going to have at least some flights out of SFO, I imagine the incremental cost of switching more flights to SFO is minimal, since there are economies of scale with each incremental flight in terms of ticket staff, advertising, etc.
Are you surprised to see Norwegian move all flights from OAK to SFO?
Lucky, why do you always talk about yield? If you knew anything about revenue management, you would know it's about optimizing load factor.
Thinking of flying them to Gatwick from MIA.
How is their Premium comfort level ?
I’m 6’4” and fly business on all international flights, but the price they are showing is unbeatable
While I find it a bit hard to believe as a Bay Area resident that "we cannot find SJC or OAK" on the list when searching for flights until I actually tried to search for awards on BA only to find that entering "SJC" didn't return any results. I was supposed to search for "San Francisco" and then there was some weird hybrid of "San Francisco, CA - San Jose,CA". Now the search is better, but I can see the same issue for people looking for Oakland and DY flights.
I would say a good move. Booked Norwegian flight to Oslo last month for next summer and saw it automatically updated departing from SFO this morning. Flew to Barcelona and Rome via OAK couple years back and felt OAK definitely is not ready to handle international flight, huge line in Global Entry with just a few machines. Yes, SFO commute is not as convenient as OAK but the custom process is much better.
I'm not surprised by their complete pullout of OAK. I few the Rome-Oakland route last year and thought the airport was woefully prepared to handle international arrivals, let alone multiple arrivals at the same time. It took them nearly a half hour to get an free gate, then 2 out of the 3 global entry machines were out of order and the 2 baggage carousels were inundated with 3 flights arriving around the same time,...
I'm not surprised by their complete pullout of OAK. I few the Rome-Oakland route last year and thought the airport was woefully prepared to handle international arrivals, let alone multiple arrivals at the same time. It took them nearly a half hour to get an free gate, then 2 out of the 3 global entry machines were out of order and the 2 baggage carousels were inundated with 3 flights arriving around the same time, which meant my bags took over an hour to come out. I've never flown internationally out of OAK since.
oh well, that was nice while it lasted. My last flight home on Norwegian, i timed my journey from stepping off the plane to my doorstep (also in the East Bay): 27 minutes. I was through customs and at the Rideshare curb @ Oakland in under 6 minutes.
Too bad, OAK is so much more convenient and easy to get in and out of. SFO is a mess and more prone to weather delays.
Norwegian's principal market for these flights is Europeans travelling to the the Bay Area. Few people in Europe have heard of Oakland and so their flights simply did not feature in any of the flight searches - Google, Momono, Kayak, Skyscanner, Expedia or whomever. Norwegian added San Francisco to Oakland's name on its own site, but couldn't influence other sites. San Jose (also little known to most Europeans) is difficult from Europe but it's principally...
Norwegian's principal market for these flights is Europeans travelling to the the Bay Area. Few people in Europe have heard of Oakland and so their flights simply did not feature in any of the flight searches - Google, Momono, Kayak, Skyscanner, Expedia or whomever. Norwegian added San Francisco to Oakland's name on its own site, but couldn't influence other sites. San Jose (also little known to most Europeans) is difficult from Europe but it's principally a business market so people will have been told that there's where they should fly. Hence BA and LH can keep the flights going.
LCCs often seem to try Oakland first (lower costs, I assume) and if things go well move much of their operation to SFO eventually. Remember that jetBlue served OAK first and had a pretty big operation there before moving most of it over to SFO.
The US market for secondary airports has been really weird. Look at San Jose airport as a place that was doing big numbers, then went down something like 50%, and now it slowly recuperating. In the Boston area, both Providence and Manchester had a boom and a bust. Providence was also a mini international hub that has since lost most of those options.
Geographically, I would think Oakland would do well because its much...
The US market for secondary airports has been really weird. Look at San Jose airport as a place that was doing big numbers, then went down something like 50%, and now it slowly recuperating. In the Boston area, both Providence and Manchester had a boom and a bust. Providence was also a mini international hub that has since lost most of those options.
Geographically, I would think Oakland would do well because its much easier to get to from the east. Similar to how Newark has the entire NJ market on top of a NYC option.
This should free up space in OAK's Escape lounge :-)
It had become unusable before the DY departures.
Too bad Oakland is so much easier to get to than SFO. It's small, not enough food but I'd still rather fly out of Oakland than slog over to SFO.
This was a good nonstop option for Bay Area, now it's a great one with this move. We found their seats very comfortable and service better than expected for LC airline. The title had me worried they were pulling from the market for a minute though!
Hoping that Norwegians q4 results are a continued improvement.
I think your last paragraph hit the nail on the head.
Once they moved some flights to SFO they suffered incrementally worse economics at OAK. They may have also realized better economics at SFO than they anticipated.