Travel to Europe is becoming a bargain. Low-cost carriers like Norwegian Air and Wow Air of Iceland are offering flights to Paris for under $500 in an attempt to lure summer travelers. “What used to be four-digit airfares in peak summer are now three digits,” said Robert W. Mann, an airline industry consultant.
Low-cost airlines have recently stepped up their long-haul game. Norwegian, for example, just announced flights to London from Tampa, bringing its new routes for this year to eight. The carrier already has more than 60 routes from the United States and is expected to add three more. Wow flies from 13 US cities to Reykjavik, Iceland, with connections to other European destinations from there.
Norwegian discount offers have drawn criticism from major carriers. A spokesperson for British Airways said, “With all the hidden extras, Norwegian customers will find themselves paying virtually the same as British Airways if they buy just one meal, a drink, snack and a single movie for the nine-hour flight.” But Norwegian was quick to point out, “We have never charged for in-flight entertainment and provide customers with clear choices throughout the booking process to enhance their journey, such as pre-ordering a meal or choosing a preferred seat. We look forward to welcoming passengers on board who wish to experience a new and fresh way to travel to Tampa.”
To compete with low-cost carriers, major airlines have begun offering basic options and different class categories on international flights. “Airlines have seen there is a price-sensitive part of the market that can be best served by no-frills point-to-point service,” said Brian Pearce, the chief economist for the International Air Transport Association.
American Airlines, Delta Air Lines, and United Airlines have also added new low-cost round-trip fares on flights to Paris for travelers willing to stop in Pittsburgh, though rising fuel prices may limit these offers in the long term. Still, with more fuel-efficient planes like the Boeing 737 MAX and the Airbus A320neo in service, air carriers may continue to offer discounted fares. “This is partly technology-driven,” Pearce said.
“The lowest prices are a tool for marketing,” said Thomas Ramdahl, Norwegian’s chief commercial officer. “Instead of using tons of money on big campaigns, we can use the fares as a campaign instead.” Low prices also ensure airlines fill all their seats.
Larger airlines reportedly made an estimated 60 percent of their revenue from first-class passengers on North Atlantic routes in 2017, meaning major carriers can afford to offer discount fares since their premium cabin costs subsidize lower fares. Also, low-cost carriers are not in the business of stealing existing customers from major airlines.
“Spirit has always talked about this — their model isn’t necessarily that they’re going to use their low fare as a weapon to take share from Delta, United and American,” Joseph DeNardi, an airline industry analyst, said. “You could probably make the same argument for Norwegian. If they’re able to offer lower fares to Europe than anybody else, they’re going to stimulate demand.”