Viking victory

Norwegian Air enjoyed a significant boost over last year in its November passenger count at Stewart Airport, Port Authority of New York and New Jersey data released last Saturday has disclosed. The Scandinavian discount carrier’s total passenger traffic at Stewart was up more than 50 percent over its November 2017 numbers. It carried 26,567 paying passengers this November compared to 17,545 the previous November.

The November numbers for the Newburgh airport’s international passenger count were accompanied by a modest boost in the number of domestic passengers as well. The four domestic carriers at Stewart — JetBlue, Allegiant, American and Delta — carried 30,266 paying passengers this past November versus 27,579 the previous November.

Twenty months into its Hudson Valley venture, the Scandinavian airline’s business strategy at Stewart appears to be increasingly successful. It is continuing to demonstrate that despite its location at an airport 65 miles north of New York City it can fill its planes for flights to and from Ireland and Scotland with paying discount passengers. 

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That does not mean, however, that the disruptive carrier doesn’t continue to be in serious financial trouble, saddled by having to make the payments on its huge worldwide fleet of new airplanes. Its high burn rate of capital has made it imperative that Norwegian embark on efforts to cut operating costs wherever it can. Even so, the entrepreneurial airline will remain more dependent on its banks and other financial backers than it would like to be. It’s facing a serious cash crunch this winter.

International Airlines Group, the owner of British Air, Iberia and Aer Lingus and other airlines, bought a 4.61 percent stake in Norwegian last April. Last week IAG, having failed in two bids for a friendly takeover, announced it would sell its Norwegian holding. The market price for Norwegian shares dropped significantly on the news.   

Probably the most emotionally disconcerting news at Stewart was the mid-January announcement that Norwegian would close its pilot base at Stewart and transfer its cabin crews to European bases. According to a Norwegian spokesperson as quoted by Times Herald-Record reporter Judy Rife, about 30 employees would be affected. Stewart Airport Commission chair Lou Heimbach hoped “this isn’t a precursor to cutting back on more flights.”

The airline is presently in winter hibernation mode, which will end March 31, when Norwegian has said it will resume most of its previous Stewart schedule. Flights to Belfast in Northern Ireland have been discontinued, while those to Bergen in Norway are scheduled to resume in March.

Still up in the air is what will happen at that time to flights between Stewart and Edinburgh. The airline and the Scottish government are at loggerheads over a compromise they made on a tax levy cut: Norwegian said the promise was the lower tax would go into effect now while the Scots say it will be implemented later. Negotiations may well go down to the last flight from Stewart to Edinburgh on March 29. The uncertainty is troubling. The route seems to have attracted substantial passenger traffic. 

In for a dime, in for a dollar. Port Authority has awarded the contract for a half-acre $37-milllion federal inspection station for processing international passengers at Stewart. The arrangement will create a separate terminal space for the processing of international passengers. At present, Norwegian would be the only carrier to use the space, which will have its own entrances, baggage areas, bathrooms and other services. 

Port Authority, which will have spent over $200 million on Stewart in the past decade, expressed confidence that the investment would “bolster the airport’s potential for future growth.” Completion is expected in 2020.

When the final 2018 numbers come in about a month from now, they will show that Stewart has handled between 640,000 and 650,000 paying passengers during the year, up substantially from the 448,698 recorded during 2017 and the 275,421 recorded in 2016. What is sometimes not realized, however, is the relatively small role Stewart’s numbers play in the overall Port Authority statistics. In 2017, Port Authority handled 132.6 million paying passengers. When the 2018 totals come in they will have recorded about 138.3 paying passengers. Stewart’s high traffic total, recorded in 2007, was under a million passengers. The 2018 data will confirm that Stewart has contributed about one half of one per cent of Port Authority’s total passenger traffic.

To the mid-Hudson region, the continued survival of Norwegian Air as a separate entity is less important than the survival of a business model based on the viability of one or more discount air carriers connecting the New York City market to international destinations. In that respect, the experience of Norwegian at Stewart in the last 20 months has been extremely positive, as the November 2018 Port Authority data emphasizes.

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