The Only Budget London-Singapore Flight Scrapped After Just a Year
The demise of the service throws into doubt the economics of long-haul, low-cost aviation as fuel prices surge.
(Bloomberg) -- The only budget flights between London and Singapore will end in January when Norwegian Air Shuttle ASA scraps the long-haul route little more than a year after it started.
The last flight to London will leave Singapore on Jan. 11, according to Norwegian’s customer booking line. The airline’s website shows no flights on the route beyond that month.
The demise of the service throws into doubt the economics of long-haul, low-cost aviation as fuel prices surge, particular on routes that are already competitive. At about $80 a barrel, Brent crude oil has almost tripled from a 2016 low.
Norwegian was betting denser seating and the lower operating costs of the Boeing Co. 787 Dreamliner would help it steal passengers from costlier rivals such as British Airways and Singapore Airlines Ltd.
A Norwegian flight from London to Singapore in November costs about 160 pounds ($208). The cheapest flight on that route with British Airways, owned by IAG SA, the same month costs 257 pounds.
After expanding its fleet and failing to adequately hedge against rising fuel prices, Norwegian has been stepping up efforts to rein in a stretched balance sheet. Chief Executive Officer Bjorn Kjos is now in the process of scaling back expenditure and cutting costs.
The airline, which reported a surprise profit last quarter, has attracted takeover interest from multiple potential bidders, helping propel its stock up 52 percent this year. IAG itself has had two offers rejected.
To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net
To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Sam Nagarajan
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