Norwegian Blames Swedish Aviation Tax for End of Some US - Stockholm Routes
Norwegian has announced it will be cutting two routes between Sweden and the US, and it's blaming the move on Sweden's new aviation taxes.
Norwegian will end nonstop service between Stockholm (ARN) and Oakland (OAK) and Stockholm and Las Vegas (LAS). The budget carrier flies a Boeing 787 Dreamliner between the two cities, with three weekly flights to Oakland. Norwegian had already suspended its Stockholm-Vegas service due to weather related issues in 2016, but this appears to be the nail in the coffin for the route. We've reached out to Norwegian for details but have to yet receive a response.
In April, Sweden introduced a new tax on flights that can range from $7 to $49 per passenger, per flight. The tax is environmentally motivated and is supposed to nudge the country toward its sustainable development goals.
When in went into effect Norwegian cancelled one European route and threatened to cancel others. Now they are making good on that threat.
”The long-haul routes are more strained because there is a higher flight tax on them,” Norwegian Communications Manager Charlotte Holmbergh Jacobsson told Dagens Industri.
The shutdown of the routes isn't due to the tax, Sweden’s Minister for Financial Markets Per Bolund claims. Bolund has a point, Norwegian is plagued by financial issues and operates many unprofitable routes. It reported a net loss of $38 million in 2017.
"The aviation industry is already subsidized through lower VAT and exemptions from fuel taxes," Bolund said in a statement to Sveriges Radio. "In spite of this, Norwegian appears to have such poor profitability on certain routes that it does not manage the recent fuel-price increase. They should probably rather review how they do business than blame a relatively low aviation tax."
”We would like to grow our business in Sweden and use Arlanda as a hub, but there is no political will for us to grow here," Norwegian Spokeswoman Charlotte Holmbergh Jacobsson told Business Insider Nordic. "The aviation tax is a clear sign from the politicians that they want air traffic to decrease.”