Oslo-based low-cost carrier Norwegian has recently renewed its distribution agreement with Amadeus and added the recently launched Norwegian Air Argentina which has been approved to serve over 150 routes.
Norwegian credits its partnership with Amadeus for supporting its long-haul ambitions, saying that it has seen 110% growth in sales through Amadeus travel sellers since 2015. More than 25% of travel seller bookings now originate outside of Scandinavia.
Norwegian announced that it will adopt the Amadeus Customer Experience Management solution to gather traveler insights which would support more personalized offers. Norwegian has also used the Amadeus’ eTicketing solution for travel sellers.
Lars Sande, senior VP of sales and distribution for Norwegian, tells tnooz that working with the GDS has opened up opportunities to target corporate travelers they could not reach through their direct online channel, as well as grow leisure sales in a greater range of markets.
“Corporate travelers are not necessarily that much into internet bookings, or booking on mobile or other devices. As we have grown in the international market it is more leisure oriented, but we are attracting corporate travelers to some routes like London to New York, where we will add daily frequency. Most of the air travel market—85%—is leisure, but there are also a lot of leisure travelers using travel agents.”
Norwegian also announced that it will add new routes and increased frequencies to its 2019 schedule from Dublin, Shannon and Cork airports in Ireland to key destinations in the US North East Coast of interest both to corporate and leisure travelers, and to Toronto, Canada.
Not all of Norwegians corporate sales are agency-based. The airline is also provides direct service to large corporate contracts, but working with a GDS helps Norwegian compete for corporate customers in other markets, while working with a smaller sales team than the airline’s legacy rivals.
“For us, as a company, we are a small player in a big market...also in terms of the number of employees that we have...We have to reach out to the travel agencies.”
While Norwegian offers unbundled and branded fares on the website, creating packages directly targeted at agency bookings has helped boost performance, Sande says, though those are always in proportion to the best fare available on the airline website which ensures agents remain competitive.
“The packages are a good solution because for a travel agent. We have to consider that the travel agencies need insight on how to sell every airline, with everything included. We have a fare on our website that is unbundled, and the travel agent will have the bundled product, but based on the same fare.”
The airline surprised investors with a 2018 Q2 net profit of NOK 300 million (3.3 million Euros) compared to losses of NOK 691 million in the second quarter last year. The airline attributed the sudden profits to a 9% reduction in unit costs and 46% growth in traffic.
CEO of Norwegian, Bjørn Kjos attributed the airline’s previous carry-over losses to the airline’s growth strategy,reflected in significant investments in new aircraft and the creation of new bases and new routes to international markets.
“Going forward, the growth will slow down and we will reap what we have sown for the benefit of our customers, staff and shareholders,” he said.
Amadeus has built strong ties with LCCs and now facilitates sales for over 110 low-cost and hybrid airlines globally. The company signed twelve new carriers last year and claims 11% average growth in travel agency bookings for its low-cost and hybrid partners during the first quarter of this year.
Manuel Midon, head of airlines, Northern & Western Europe, Amadeus, said of Norwegian’s agreement renewal and expansion:
“We are very pleased to support Norwegian’s low cost long haul growth strategy and our expanded agreement helps to underline the key supporting role of the intermediated channel. We have been working hand in hand with the airline to help enable its expansion through innovative distribution and IT solutions. This technology has been supported by unique insights from our extensive travel agency network, allowing Norwegian to adapt its strategy due to local market conditions.”