In the Financial Times Online this week they discuss IAG’s new brand, LEVEL, in a piece analysing the low-cost long-haul market. The journalist notes that since Norwegian started offering services across the Atlantic in 2013, legacy airlines have ‘rushed to protect their large market share’.
Lufthansa is expanding its Eurowings subsiduary and Air France-KLM is launching a new airline called Boost.
Analysis by Barclays estimates that Norwegian is currently making a margin of two to three per cent on transatlantic flights, compared to 15 to 20 per cent in the legacy model. However, they predict that the introduction of new generation narrow-body aircraft will be able to significantly reduce the costs, and could make another 60 point–to–point routes viable.
The journalist adds that IAG has signalled interest in the new A321LR, with an additional 500-mile range. The aircraft would be used by Aer Lingus on longer-haul routes.