In June, Norwegian Air began flying from the United States to Europe. Its tickets are about half the cost of U.S. airlines flying the same routes.
Norwegian Air now joins Iceland-based WOW air (which flies connections through Reykjavik) in the transatlantic affordability market.
Yet breaching this market is no easy road because of the major added costs. Airliners, mechanics, cabin crew, and fuel that go into flying across the Atlantic ocean, are causing Norwegian Air some growing pains. Norwegian Air's falling stock and the recent departure of its CFO attest to this reality.
Still, the arrival of Norwegian and WOW to America are manifestly positive developments. By innovating at every level of the transatlantic flight paradigm, the airlines are shaking up U.S. based carriers. They are forcing big names like Delta, United, American, and British Airways to reform or risk losing their dominant market share.
However those airlines chose to respond, trans-Atlantic airline ticket prices are heading one direction: down. And as Conde Nast notes, quality of service (accounting for seat prices) is going the opposite direction: up.
Of course, the big airlines aren't happy about this. And behind the scenes, they've been waging an effort to prevent foreign competitors from breaking their cozy oligopoly.
In April, Reps. Peter De Fazio, D-Ore., Frank LoBiondo, R-N.J., and Rick Larsen, D-N.J., wrote to the Department of Transportation demanding that it refuse Norwegian Air's request for trans-Atlantic permitting. They called on the government "to stop this race to the bottom and to protect open markets and fair play."
But to be clear, their complaints have nothing to do with fair play or open markets. The congressmen simply want to protect U.S. airliners from having to compete with cheaper alternatives. Moreover, in effectively calling for sustainably high ticket prices for American travelers, this letter is a textbook case of political cronyism. Had they believed Americans would notice their little act, the three representatives would never have dared to pursue it.
But they did. And now we should watch carefully to see whether the congressmen receive big donations from airline groups and individuals in next year's midterms.
It's not just the business-Congress special interests. Todd Insler, head of the United Airlines pilot lobby, has also argued for blocking Norwegian Air. He knows that if cheaper airlines start undercutting United, his job security is at risk. But while American jobs should obviously concern us, we must ask whether the jobs of a few hundred Americans are worth millions of other Americans paying hundreds of dollars more per flight than they need to.
I think not.
Fortunately, the Department of Transportation has thus far stood firm in allowing Norwegian Air to serve the American people.
Nevertheless, we could do more.
It is ludicrous that foreign companies are barred from offering U.S. domestic air routes. Were they able to do so, they could hire more Americans to crew and maintain their aircraft, and do for the domestic market what Norwegian Air is doing for the trans-Atlantic.