Airlines slash Northern departures

By Arctic Business Journal - October 5, 2022
Widerøe’s decision to cut flights comes as consumers have reduced spending due to inflation fears (📸: Widerøe)

EPECTATIONS OF A “difficult” winter season has led two regional airlines to slash departures on their northern Norwegian routes this winter.

In announcements released on Tuesday, Flyr and Widerøe predicted drastically reduced demand for domestic travel in Norway as a result of rapidly rising consumer prices, at the same time as both airlines were struggling with higher energy prices and interest-rate hikes.

Christian Skaug, the Widerøe marketing director, said: “We’re not encouraged by the way the market looks. The Norwegian economy has slowed rapidly and, not surprisingly, this has an effect on the demand for air travel.”

The decline is especially sharp among holiday and leisure travellers. The segment had otherwise rebounded strongly this summer after pandemic restrictions had been relaxed. Business travel, according to Mr Skaug, has not returned to pre-pandemic levels.

Persistently high fuel prices and the re-introduction of a passenger tax have significantly increased costs for airlines in Norway, but significant overcapacity and tough price competition on the Norwegian domestic market have made it impossible for airlines there to pass the increased costs on to passengers.

Tonje Wikstrøm Frislid, Flyr’s managing director, called the decision to focus on its holiday routes to southern Europe this winter “disappointing” but necessary to ensure the airline’s survival.

By reducing departures in northern Norway and laying off staff, Flyr hopes to cut its costs this winter by 50%.

“It was a difficult decision that we hoped we would not have to make. But demand isn’t at the level we need it to be. This particularly true of business travellers, who haven’t returned.”

Mr Frislid expects to begin to return to normal service in the spring.

Hans Jørgen Elnæs, an airline industry analyst, told NRK, a news outlet, that airlines would likely see renewed demand in 2023, but said this winter would be tough to get through for airlines, and expected that SAS and Norwegian, Norway’s two largest airlines, to announce similar reductions soon.

“There are a lot of things that are hitting people and businesses in their wallets. The result is falling demand and airlines need to do something in response.”