We know that Norwegian Air is planning to extend its service to business cities such as Oakland, New York and Los Angeles. Right before Christmas IAG responded and announced that it would be launching a low-cost network, probably from Barcelona. The destinations under consideration included Los Angeles, San Francisco, Buenos Aires, Santiago and Tokyo.
This week the traditional stops and starts of any new venture started to take place. For Norwegian it was unions representing about 100,000 airline workers bringing a suit to the US Court of Appeals. They are challenging the Department of Transport's decision in December to award Norwegian a licence to fly between Ireland and Boston and New York. The unions who are hoping to see that decision overturned include the US federation of labour organisations (AFL-CIO), Airline Pilots' Association, Association of Flight Attendants and the Allied Pilots' Association.
For IAG it's a report in a Spanish trade paper that IAG will launch the new carrier as an Iberia Express initiative.
Both these long-haul, low-cost initiatives have two big points in common: (1) they are using lower-cost labour as a means of reducing the operating cost base and making the initiative financially viable and (2) both are taking aim at cities with both business and leisure customer bases.
These trends are reminiscent of short-haul low-cost carriers such as Ryanair and easyJet. Both started with a strong leisure element but after business travellers experienced the airlines for their personal travel, they became acceptable alternatives for business travel.
We don't know the details of the IAG venture which is still said to be starting in June but elements of the Norwegian offering are clearly targeting the business traveller: a corporate portal, a corporate loyalty programme and a premium class which features dedicated check-in, WiFi and seats with generous leg room and USB and charging points.
It's early days. IAG's prototype is still only on the corporate drawing board but there is no doubt what it and Norwegian are looking for — it is the higher margin business that business travellers bring for reasons such as making the decision to travel closer to departure time and often needing to have more flexible, higher cost tickets.
Suppliers used to worry about competing with rivals to maintain market share. But now there are new boys on the block who are enthusiastically seeking to compete for a slice of that same pie. After all, the trend is for the convergence of leisure and business travel, a continuing focus on costs and more willingness for business travellers to try new suppliers.
The new competitors are on the march.