Like many another industry, the airline business is more willing to celebrate its expansions than publicize its contractions, even if the latter are seasonal. That seems true of Norwegian Air’s adventure at Stewart Airport, one of the Cinderella stories of the regional economy in 2017. Despite continuing effusions of optimism, whether the sparkling glass slippers this Scandinavian contender is bringing will ultimately fit the regional footprint is still up in the air. Norwegian’s local story promises more plot turns before the match becomes longer-term.
To my knowledge, Norwegian Air hasn’t been quick to publicize that it has cut its scheduled service out of Stewart from 21 flights per week in October to 15 in February. But its website says so: six weekly flights to Dublin, three to Edinburgh, and two each to Belfast, Bergen and Shannon.
There have been “a few modifications” of Norwegian’s flight schedule. Norwegian Air spokesperson Anders Lindstrom said the cutbacks at Edinburgh were because of a tax issue, not because there was insufficient demand for a fuller schedule. The Scottish government was postponing its promise to reduce an air-passenger tax, he said.
If that were all there was to the matter, it would not explain the reduced passenger volume to the other Norwegian destinations served by Stewart. Recently released Port Authority of New York and New Jersey (PA) data shows a drop in Norwegian paid passenger traffic from 24,234 in October to 17,545 in November. Meanwhile, the number of passengers carried by the domestic Stewart airlines increased fractionally from 27,463 in October to 27,579 in November.
Norwegian’s decisions are vitally important to Stewart. Even with the cutbacks, the reduced November numbers added sufficiently to the passenger totals achieved since Norwegian began flying from Stewart in mid-June to catapult the European-based economy carrier into the top position among the airlines for the twelve months ending November 2017. According to the PA statistics, Norwegian Air handled 123,123 passengers in the past year versus JetBlue Airways’ 118,157.
The Norwegian edge in this particular metric is almost certain to increase.
It’s winter in the Hudson Valley. Except for outdoor recreation, energy supply and other selected niches, the economy is slower than it is in the rest of the year. There are fewer customers, less sales taxes collected.
The dip in Norwegian business at Stewart should not have been a complete surprise. International air traffic varies much more from season to season than does domestic air traffic. Despite more flights to warmer southern climes, international air traffic from all PA airports, including Stewart, was 1.94 million revenue passengers in February versus 3.36 million in August. The seasonal drop in domestic air traffic at the PA airports was less steep. There were more than 1.95 million domestic revenue passengers in February versus 2.48 million in August.
Bottom line: Expect international air traffic, including Norwegian’s, to drop more in winter than in summer.
That doesn’t necessarily push the new entrant to unprofitability. An advantage of point-to-point routes such as Norwegian flies over the hub-and-spoke system of the major American airlines (except Southwest) is more pronounced during contractionary periods. Slower traffic? Simply cut back the number of flights to increase their seat occupancy rate (called the passenger load factor, the ratio of passengers to available seats) and boost operational efficiency.
From last June 15, when Norwegian started air service, almost as many international passengers have flown in and out of Stewart with Norwegian Air as domestic passengers have on all the other airlines put together: JetBlue, American, Allegiant, Delta and United. Unless Norwegian adds to its local schedule, that proportion is unlikely to be sustained in the winter. But Norwegian will remain the largest single contributor in terms of passengers to Stewart operations.
According to Coach USA, which sells $20 bus trips from Stewart to PA’s mid-Manhattan bus terminal in conjunction with the Norwegian flight schedule, 30 percent of Norwegian passengers use the bus. Stewart officials say that the bus service in effect expands the airport’s catchment area, the geographic area which it serves. A low fare and bus service offered from 55 miles from the heart of New York City makes for a very attractive deal, they contend.
Good start, say the experts. What’s next?
On his first visit to Stewart in September, Norwegian’s founder and ebullient CEO, Bjorn Kos, pronounced himself amazed with the airport’s convenience and location. He said his airline would expand its flight schedule in 2018 and 2019.
According to the excellent Times Herald Record business reporter Judy Rife, George Grieve, a Coach USA executive, said at that time that he had been told that the Stewart schedule would be cut back to 17 flights per week in November and then increased to 26 or 28 a week in March. l
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