Two of the discount airlines trying to bring the low-cost flight model to long-haul routes across the Atlantic just teamed up with a powerful friend.
EasyJet, Europe’s second-largest budget airline by passengers, said Tuesday it is setting up a new flight-sharing platform with Norwegian Air Shuttle (NWARF)and Canada’s WestJet (WJAVF), two pioneers of discounted long-haul flying, a move that will allow all three airlines’ passengers to find connecting flights more easily.
The new platform, called Worldwide by EasyJet, builds on the U.K. airline’s existing flight booking tool GatwickConnects, which focuses on connections out of London’s second-largest airport.
Gatwick serves 228 destinations and is EasyJet’s busiest hub. It’s the airport that Norwegian uses to serve New York, Los Angeles, and other U.S. destinations, while WestJet uses it to serve Toronto, Vancouver, and Calgary.
“Around 70 million passengers flying through an EasyJet airport each year are connecting onto other flights, mainly long haul, and it is this market segment that Worldwide by EasyJet will open up for us,” outgoing EasyJet CEO Carolyn McCall said in a statement. “Our own customers and those who fly with other airlines, short and long-haul, have also asked us to make it easier to connect with EasyJet flights, and this simple booking platform makes it easy for them to do so.”
Thomas Ramdahl, Norwegian’s chief commercial officer, added: “With Norwegian’s growing long-haul networks and EasyJet’s extensive European routes, millions more passengers will have the chance to travel to some of the world’s top destinations, all with great fares, smooth connections, and a quality service.”
The service won’t match exactly what established carriers can offer: customers will still need to collect their bags, and there will be a minimum stopover time of two and a half hours. Nor will anybody be holding flights to allow connections from other flights that are delayed.
The announcement gave a welcome boost to both Norwegian and EasyJet’s shares, which have had a rough time this year for different reasons. EasyJet’s shares have been pummelled by uncertainty over Brexit and McCall’s intention to leave for broadcaster ITV. Norwegian’s shares had at one stage fallen by nearly half from last year’s peak on concerns that it has too taken on too much debt to fund an ambitious expansion plan. The jury is still out as to whether the discount model, which depends on quick turnarounds, low margins, and ruthless utilization of capacity, can succeed on long-haul routes.
Dan Togo Jensen, an analyst with Handelsbanken, said the deal will give Norwegian “more selling power,” but said the benefits would be “difficult to quantify.” He rates the stock “accumulate” – a cautious “buy.”
By early afternoon in Europe, EasyJet was up 1.6%, while Norwegian was up 2.9%.