*By Amanda Weston* Low-cost airlines have succeeded by dazzling travelers with cheap tickets to popular destinations, but that strategy is growing harder to maintain for long-haul trips. "The problem is nobody's sure whether the model is sustainable," Brian Sumers, senior aviation business editor at Skift, told Cheddar Wednesday. "Norwegian Air loses a lot of money. They do okay in the summer because everybody wants to go to Paris or Stockholm or London in July and August. But right now, February mid-week, it's very hard to get tourists to fly between the United States and Europe." Low-cost airlines like Norwegian capitalize on offering customers a less costly alternative to what Sumers called "legacy airlines," such as American Airlines ($AAL), United Airlines ($UAL), and British Airways. But Sumers said those big airlines are actually the low-cost companies' biggest risk when it comes to long-haul trips, despite big names getting nervous when low-cost flights came on the scene decades ago. "They have been absolutely fierce competitors with Norwegian and other airlines like this," Sumers said. "You'll find maybe if you want to go to London or Paris this summer, you can go to Norwegian Air's website. You'll find a pretty good deal, but I bet you can go AmericanAirlines.com and find exactly the same deal. That's been really tough for Norwegian. I don't think they expected legacy carriers to be such fierce competitors on a lot of these routes." When asked whether he thinks low-cost carriers will raise prices, Sumers replied "absolutely." "Norwegian is having some trouble making money," Sumers said. "They're losing a lot of money right now. And I think what they're going to do is when demand rises ー and again that's the summertime when everybody wants to go to Europe ー they're raising their prices." "So you're just not going to see, you know, $99 or even $199 one-way fares to Europe during peak times this summer. You're going to see more like $400, $500, $600 one-way. And it's like, why get off the couch for a price like that? And so Norwegian is just not stimulating the market like it once did." But for short-haul low-cost carriers, such as Frontier and Spirit ($SAVE), Sumers said: "They're doing just fine." For full interview [click here](https://cheddar.com/videos/long-haul-trips-bring-big-competition-for-low-cost-airlines).

Share:
More In Business
Boeing defense workers on strike in the Midwest turn down latest offer
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
FBI’s NBA probe puts sports betting businesses in the spotlight
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla’s profit fell in third quarter even as sales rose
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
Load More