October 8, 2018 / 5:33 PM / in 11 days

British Airways loses New York crown to low-cost rival Norwegian

LONDON (Reuters) - Norwegian Air Shuttle (NWC.OL) has overtaken British Airways as the biggest non-U.S. airline on transatlantic routes to and from the New York area, in the latest illustration of the low cost carrier’s move into British Airways territory.

A British Airways A380 makes it approach to land at Heathrow airport in London, Britain March 17, 2017. REUTERS/Peter Nicholls

Norwegian carried 1.67 million passengers to or from airports in the New York area in the 12 months to the end of July, compared with the 1.63 million carried by British Airways, data from the Port Authority of New York & New Jersey showed.

No-frills carrier Norwegian has been rapidly expanding in the transatlantic market over the last five years, prompting the owner of British Airways, IAG (ICAG.L), to try to buy it earlier this year.

British Airways planes are parked at Heathrow Terminal 5 in London, Britain May 27, 2017. REUTERS/Neil Hall

The data showed four U.S. airlines, led by United, are the biggest carriers of international passengers out of the main airports in the New York area, which include John F. Kennedy International, LaGuardia and Newark Liberty International.

Air Canada is the biggest non-U.S. carrier of international passengers, but its dominance is on travel between the United States and Canada.

Norwegian, and other relatively recent entrants to the market such as Wow Air, have led a charge to shake up Europe’s long-haul flight market, offering ticket prices that can be as little as half those charged by traditional carriers.

The traditional airlines have responded by selling a new budget class of ticket, as well as setting up, in IAG’s case, new airline Level to compete directly with Norwegian on price.

“Our commitment to New York is as strong as ever,” a BA spokeswoman said. “We fly up to 70 times a week from all three of our London airports, and we recently announced a $65 million (49.7 million pounds) investment on new lounges, improved food, seating and shops at JFK Terminal 7.”

Lufthansa has also started budget long-haul flights using its Eurowings brand.

Norwegian said in May it had rejected two approaches from IAG, which also owns the Iberia, Aer Lingus and Vueling brands, because they undervalued the company. IAG owns a 4.6 percent stake in Norwegian.

The pace of Norwegian’s growth - figures from July 2017 show it only carried 750,000 passengers into and out of the New York region - has weighed on its finances and it faces mounting pressure to control costs and shore up its balance sheet.

“Fares have been too high for too long as transatlantic routes have been long dominated by carriers with outdated legacies running on fumes,” a Norwegian spokesman said.

“Norwegian will continue to spread its wings to the Big Apple with a third-daily service between London and New York JFK from 28 October.”

Reporting by Sarah Young; Editing by Mark Potter and Louise Heavens

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