The early post-pandemic years ushered in a new era of growth for independent transatlantic leisure-focused airlines. But this summer, flyers will encounter a transatlantic marketplace in which such carriers have gone into retreat amid continued capacity expansion by network airlines.
Newcomers Norse Atlantic Airways of Norway and Play Airlines of Iceland have drawn down U.S. capacity in an effort to stop bleeding red ink.
"The competition on the Atlantic has surpassed the pre-Covid peaks," said Play CEO Einar Orn Olafsson. "So, we have experienced quite significant competition in the market."
Meanwhile, long-standing German independent airline Condor cut six of the 18 North American cities it served last summer after Lufthansa stopped granting Condor access to European feeder routes through Condor's Frankfurt base.
The cities include Baltimore, Minneapolis, Phoenix and San Antonio.
To bolster demand for its 12 remaining transatlantic routes, Condor is adding onward flights from Frankfurt to nine major European cities, including Paris, Milan and Rome -- a strategy that differs from the carrier's usual intra-European offerings to warm seaside locales.
Meanwhile, network airlines, among them United, Air France and Lufthansa, overall are slated to increase U.S.-Europe capacity by 3.9% year over year in June, according to a Deutsche Bank analysis. For the second quarter, network capacity is scheduled to be up 9.9% compared to 2019, Cirium flight schedule data shows.
The period leading up to and during the pandemic spelled an end to the previous surge in low-cost, transatlantic service, including the demise of long-haul operations by the largest disrupter, ultralow-cost carrier Norwegian Airlines, and the closure of Icelandic discounter Wow.
But 2021 saw the launch of Play, another Iceland-based discounter, while 2022 brought the launch of Norse Atlantic.
Both airlines are small transatlantic players that this year will be smaller. Play suspended flights from Reykjavik to Baltimore in December, leaving Washington Dulles, Boston and Stewart Airport in New York's Hudson Valley as its only U.S. stations. Play's U.S. seat count is scheduled to be down 24.6% in the third quarter year over year. Norse Atlantic plans to fly 3.6% fewer U.S. seats this summer than last, having discontinued three routes but adding two.
Both airlines have also implemented broader changes to their commercial strategies in recent months, including long-term measures to reduce capacity by leasing aircraft to other operators. Norse Atlantic will lease four of its 12 planes to India's Indigo. Because three of those leases won't take effect until the second half of the year, capacity reductions will ramp up beginning in July.
Play has reached deals to lease three of its 10 planes to an as-yet-unnamed European carrier beginning in the spring.
Olafsson said Play is also de-emphasizing connecting U.S.-Europe traffic through Reykjavik and is gearing its marketing toward promoting higher-yielding nonstop flights.
He said he expects to eventually build more in the U.S., though he said developing partnerships will likely be a key component to facilitating growth.
John Strickland, director of London-based JLS Consulting, said it will be difficult for Play or Norse to achieve a solid transatlantic footing, a market that discount airlines have long struggled with.
"The problem is it's a seasonal market, and there's lots of competition," he said, noting the challenges of running a profitable winter operation. "And airlines with premium offers are well placed."
In regard to premium seats, Condor is far better positioned than an ultralow-cost carrier. Though focused on leisure, the airline flies a uniform long-haul fleet of Airbus A330neos equipped with lie-flat business-class offerings and premium economy. Condor also offers codeshares with Alaska Airlines through eight of its U.S. gateways and interlines through three U.S. gateways with JetBlue.
Still, absent the name recognition, connectivity and large loyalty programs that German stalwart Lufthansa has as well as other major operators flying U.S.-Germany and beyond, Condor needs to rely on discount prices as a key calling card.
Mikko Turtiainen, Condor's director of sales for the Americas, said the airline typically charges 25% to 50% less than legacy competitors in all cabin classes.
"I think we have the best product-to-price proposition when going into Europe," he said.
He also touted Condor's nine new European destinations, saying that they'll appeal to both leisure and business flyers.
Still, while the end of its agreement with Lufthansa caused Condor to contract its transatlantic offerings, Lufthansa-owned leisure brand Discover is growing. This summer, Discover will fly two new Germany-U.S. routes and is slated to increase its seat count in the market by 12.7%.
"They are certainly better placed than Condor just by being part of a bigger group," Strickland said.