Scandinavian melodrama

It’s ironic. Though discount carrier Norwegian Air is skating on perilously thin financial ice these days, its first full year of international service at Stewart Airport was not responsible for that red ink. On the contrary. Ending the year with a flourish, the airline’s year-end numbers signal an indisputable success at Stewart.

Would that the rest of the airline’s operations be doing as well. But they’re not. The airline’s stock price has plummeted. The world is now witnessing an existential threat to the survival of Norwegian Air, the plucky  independent entrepreneurial airline which had the courage to test out a widely derided business model in the extremely competitive New York international air market, and to produce, it seems from the numbers, distinctly positive results. At Stewart, the numbers constitute a proof of concept. 

The airline’s CEO, Bjorn Kjos, is a colorful character who went all in on selling steeply discounted tickets to flights to and from secondary airports like Stewart. His strategy has had its ups and downs. Revenues increased dramatically, but so did debt. Norwegian was successful in some markets but not in others. When would the company-wide turnaround come?


In the fairybook world, the aerial melodrama would end with the risk-taking entrepreneur escaping the jaws of his creditors and reaping his just rewards. In the real world, alas, there are alternate outcomes, most of which don’t turn out so well. For Norwegian as a company, the signs have been ominous. To raise cash to meet its bills, the airline has recently been selling warrants that value the company at less than its stock price.


Meanwhile, airport owner Port Authority of New York and New Jersey has announced it’s proceeding with plans to build a 20,000-square-foot separate international terminal at Stewart for about $40 million. The addition, PANYNJ blithely reported the expenditure was part of a larger investment to which it had committed itself a decade ago. The multi-billion-dollar interstate authority said in a press release that it had confidence in Stewart’s growing appeal for carriers and passengers alike.

Norwegian is Stewart’s sole international carrier. No Norwegian, no international passengers.

Is this powerful agency taking on a big financial risk based on shaky thinking? Or might Port Authority know something the rest of us don’t? 

In its first full half-year of operations at Stewart in 2017, Norwegian carried 136,600 paying passengers. In the same six months this year, making approximately the same number of flights, it carried 187,500 paying passengers. That’s an average increase of 8500 passengers a month. Norwegian ended the last quarter of 2018 with a bang, its number of paying passengers at Stewart increasing by 40 percent over the previous year’s last quarter.  

These numbers constitute a strong indicator that the market demand from passengers traveling between the New York City area and European destinations at ticket prices the Scandinavian airline charges at Stewart (plus $20 one way for the Short Line bus) is robust. Some of the financial parameters remain unknown, but it’s clear a significant number of metropolitan New York passengers or tourists prefer patronizing Stewart to getting stuck on the Van Wyck Expressway on their way to JFK or schlepping to Newark (Norwegian flies out of both).  


Though Norwegian is pushing ahead with some new flights to Europe from other American airports, Kjos has said that he wants to concentrate on adding more frequent flights to and from existing destinations that Norwegian serves. That’s known as “optimizing the route portfolio.”

In 2018, Stewart Airport served 366,130 domestic passengers (117,713 used JetBlue, 111,747 Allegiant, 79,646 American and 57,564 Delta) as well as the 324,291 international passengers who used Norwegian. Though only about half of one percent of the 139 million air passengers at all the Port Authority airports, the Stewart 2018 passenger total was the highest in a decade.

If the count of international passengers continues to swell in the coming months, Norwegian’s viability at Stewart will also continue to strengthen. Eventually, the market potential is likely to attract competitive discount carriers. This may be one of those business situations, however, where it is not the pioneer in the market but the early adopter who ends up with the greater financial success. But Stewart has a very good chance of ending up a winner no matter how the Scandinavian melodrama ends.

There are 2 comments

  1. Dwayne

    Excellent article. I’ve read some articles published on this site concerning Norwegian/Stewart, but then recently saw some high-level financial news (Bloomberg, The Economist) about Norwegian and said “WTF?!”. As for the question “Is this powerful agency taking on a big financial risk based on shaky thinking? Or might Port Authority know something the rest of us don’t? “, I lean to the former. All my experience with NYS-related financial initiatives goes against the latter. How are those casino investments doing, for instance (LOL)?

  2. Paul Chauvet

    I think if Norwegian left – another carrier would come in to take their traffic (to Ireland at least). Norwegian’s debt in financing planes aside, they have definitely shown there is demand.

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