CEO Bjorn Kjos has announced that Norwegian Air Shuttle plans to begin an airline in Argentina with a fleet of Boeing 737 aircraft by the end of the year, pending government approval. The airline already has registration plates for six Boeing 737-800 and six Boeing 737MAX8 aircraft, however flights will not begin until the airline has received approval to start operations.

“We have delivered the papers and we have also applied for the routes,” CEO Bjorn Kjos said at the Skift Global Forum in London, held in April. “We’re looking to serve a lot of cities domestically, but it depends on the concessions.”

The check-in hall at Buenos Aires’ Ezeiza International Airport, which is expected to become one of Norwegian Air’s bases by the end of this year. Photo Credits: Wikimedia Commons / Martin St-Amant

Norwegian’s move into Argentina is timed with market reforms being pushed by President Mauricio Macri, some of which involve the liberalization and somewhat deregulation of the aviation sector. Government policies in Argentina have long favored state-owned carrier Aerolineas Argentinas and its subsidiary Austral, leaving little room for private carriers. The government even actively pushed to get rid of a number of private carriers, notably LATAM Argentina (then known as LAN Argentina), in which a court was able to block a government-supported plan to break the lease of a hanger at Buenos Aires’ Jorge Newbury Airfield (the hanger was considered vital to the carrier’s operations in Argentina, and which it could not viably operate without). However, under new government policies, small domestic carriers, formerly relegated to underserved markets, have been able to expand, and Norwegian’s new subsidiary is expected to take advantage of this new liberalization of the market.

A rendering of a Norwegian Boeing 737MAX aircraft. Norwegian is planning to operate a number of these in Argentina as part of its new operations there. Credits: Norwegian

The airline is looking to operate out of bases in Buenos Aires, Cordoba and possibly Mendoza, all in Argentina. Flights are being planned both internationally and domestically, and Norwegian Air International is planning services linking Argentina and its hub at London Gatwick, using Boeing 787 Dreamliner aircraft. The airline is planning to operate a schedule to carry between 2 and 3.5 million passengers in its first full year, however the airline will have to compete against the rise of domestic carriers unhindered by government restrictions, as well as the establishment of Avianca Argentina, which is expected to begin operations later this summer.

A Norwegian Boeing 787 Dreamliner at London Gatwick. As part of its launch in Argentina, the airline is expected to start service between London and Buenos Aires using its Dreamliners. Photo Credits: Norwegian / Steve Bates

Norwegian’s Argentina subsidiary plans to shake up the South American market, with spokesman Alfons Claver stating that, “South America is a very interesting market characterized by little competition and high prices,” mostly due to high taxes and regulation between countries. However, the Argentinian government has been receptive to the airline, hoping that such a business model will stimulate growth both in the aviation sector and in the national economy as a whole.

The advancing of Norwegian Air Argentina’s plans come as the national government is encouraging new carriers to begin operations to Buenos Aires, being successful with Ethiopian Airlines, which will extend their services from São Paulo to Buenos Aires starting in the second half of 2017. The government is now encouraging airlines such as Israeli airline El Al and South African Airways to extend their services to Buenos Aires, and the launch of Norwegian Air operations in Argentina can only be seen as a win for the current government’s policies.

Categories: Industry Talk