Why a Norwegian airline wants to charge tourists more than residents
Widerøe, a Norwegian regional airline, is pushing for a new ticket pricing strategy that will see tourists charged more than residents on some flights.
The airline Widerøe has propsoed a new approach to ticket pricing, over concerns that the recently halved maximum prices on short-haul flights provided by the government may actually make travel less accessible for residents in Norway's rural districts, regional newspaper Brønnøysunds Avis reports.
The airline has suggested adopting a Spanish model, where different fares apply to permanent residents and tourists, the newspaper reported on Tuesday.
This model, according to the airline, would aim to strike a balance between making air travel in rural areas accessible for local residents while ensuring that routes are not filled up by tourists.
Norway's FOT route system
In Norway, the vast majority of air traffic operates under commercial arrangements.
However, to maintain a comprehensive network of flight services across the country, the government pays for transportation by procuring flight route services through public competitions among airlines on routes that may not be economically viable for commercial operators.
These routes are primarily located in western Norway and northern Norway (you can find the full list on the Norwegian government's website), and Widerøe is one of the largest providers of these flights.
These arrangements, known as FOT routes (forpliktelser til offentlig tjenesteytelse på flyruter in Norwegian roughly translates to a 'public service obligation on flight routes'), impose requirements such as maximum ticket prices, capacity, frequency, and routing.
Typically, the contract is awarded to the airline offering the lowest cost to the state, granting them exclusive rights to scheduled traffic on the designated route for the contract period.
Higher demand prompts reaction from Widerøe
Effective from April 1st, 2024, and August 1st, 2024, new agreements will govern these FOT routes. One of the tweaks will see the maximum prices that airlines can charge on some routes halved.
While these agreements are expected to enhance accessibility and affordability for travellers across Norway, Widerøe has already noted a surge in demand on some of the routes, particularly from holidaymakers and leisure travellers.
Concerns have also been raised regarding potential adverse effects on patients reliant on air transportation for medical purposes.
Lina Lindegaard Carlsen, Widerøe's communications advisor, acknowledged the issue and suggested exploring alternative pricing models to address them effectively.
"It remains to be seen how it will actually turn out, but if it becomes difficult to get people in need to be served, then we believe that other price models will work better for those completely dependent on aeroplanes as public transport," Lindegaard Carlsen said.
The communications advisor added that Widerøe had recommended to the Ministry of Transport that a new price model be considered. Under this model, residents along the FTO network would get a solid discount on flights, regardless of whether the journey consists is a FTO or commercial flight.
"This would ensure a low price for the residents of Norway's districts while at the same time ensuring that the most popular departures are not filled up by holiday and leisure travellers many months in advance," Carlsen said.
Widerøe was formally acquired by Norwegian Airlines in January 2024.
When the takeover was first announced in July 2023, Norwegian CEO Geir Karlsen said, "With this transaction, we will now create a streamlined and more comprehensive offer for all customers, and we look forward to offering seamless travel across our entire route networks."
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The airline Widerøe has propsoed a new approach to ticket pricing, over concerns that the recently halved maximum prices on short-haul flights provided by the government may actually make travel less accessible for residents in Norway's rural districts, regional newspaper Brønnøysunds Avis reports.
The airline has suggested adopting a Spanish model, where different fares apply to permanent residents and tourists, the newspaper reported on Tuesday.
This model, according to the airline, would aim to strike a balance between making air travel in rural areas accessible for local residents while ensuring that routes are not filled up by tourists.
Norway's FOT route system
In Norway, the vast majority of air traffic operates under commercial arrangements.
However, to maintain a comprehensive network of flight services across the country, the government pays for transportation by procuring flight route services through public competitions among airlines on routes that may not be economically viable for commercial operators.
These routes are primarily located in western Norway and northern Norway (you can find the full list on the Norwegian government's website), and Widerøe is one of the largest providers of these flights.
These arrangements, known as FOT routes (forpliktelser til offentlig tjenesteytelse på flyruter in Norwegian roughly translates to a 'public service obligation on flight routes'), impose requirements such as maximum ticket prices, capacity, frequency, and routing.
Typically, the contract is awarded to the airline offering the lowest cost to the state, granting them exclusive rights to scheduled traffic on the designated route for the contract period.
Higher demand prompts reaction from Widerøe
Effective from April 1st, 2024, and August 1st, 2024, new agreements will govern these FOT routes. One of the tweaks will see the maximum prices that airlines can charge on some routes halved.
While these agreements are expected to enhance accessibility and affordability for travellers across Norway, Widerøe has already noted a surge in demand on some of the routes, particularly from holidaymakers and leisure travellers.
Concerns have also been raised regarding potential adverse effects on patients reliant on air transportation for medical purposes.
Lina Lindegaard Carlsen, Widerøe's communications advisor, acknowledged the issue and suggested exploring alternative pricing models to address them effectively.
"It remains to be seen how it will actually turn out, but if it becomes difficult to get people in need to be served, then we believe that other price models will work better for those completely dependent on aeroplanes as public transport," Lindegaard Carlsen said.
The communications advisor added that Widerøe had recommended to the Ministry of Transport that a new price model be considered. Under this model, residents along the FTO network would get a solid discount on flights, regardless of whether the journey consists is a FTO or commercial flight.
"This would ensure a low price for the residents of Norway's districts while at the same time ensuring that the most popular departures are not filled up by holiday and leisure travellers many months in advance," Carlsen said.
Widerøe was formally acquired by Norwegian Airlines in January 2024.
When the takeover was first announced in July 2023, Norwegian CEO Geir Karlsen said, "With this transaction, we will now create a streamlined and more comprehensive offer for all customers, and we look forward to offering seamless travel across our entire route networks."
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