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26/10/2021

Transpacific Start-up Airline Northern Pacific to follow the 'Icelandair Model'

Northern Pacific Airways plans to bring an Icelandair style stopover model to the transpacific market.

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Image: Northern Pacific Airways

 

Earlier in 2021, IBA announced that over 130 start-up airlines were planning to commence operations by 2022. Whilst this modest boom is primarily driven by Covid19 and discounted operating costs, there is some evidence to suggest that most global crises’ provide a fertile ground for start-up airlines.

 

One of these latest newcomers is Northern Pacific Airways, wholly owned by Float Alaska. Northern Pacific intends to operate in the transpacific market, providing an alternative to long-haul flights between North America and East Asia, many of which are between 10-13 hours in duration. That alternative comes in the form of a stopover in Alaska, the USA’s most northerly state.

 

This strategy is based on a business model pioneered by Icelandair. The Icelandic flag carrier has used their base at Keflavik to offer low transatlantic fares between Europe and North America for some time, with the option to stopover in Iceland. In addition to low fares, potentially longer stopovers can bring additional tourist income to local economies. Northern Pacific Airways is aiming to connect key Asian cities such as Incheon, Tokyo, Nagoya and Osaka with New York, Las Vegas and Orlando via Anchorage.

 

Rob McKinney, Chief Executive of regional carrier Ravn Alaska, suggests some advantages of stopovers in Anchorage. Customers inbound to the USA will have the opportunity to clear customs and immigration in Anchorage, avoiding long queues at busier terminals such as Los Angeles and San Francisco (a similar advantage to Dublin’s US Preclearance Facility, though inside the United States itself). Anchorage can also be seen as a midpoint on the great circle routing between Asia and selected parts of North America, minimising total trip time and inconvenience to passengers.

 

A digital rendering of a Northern Pacific Airways Boeing 757-200 on the ground in a hangar.

Image: Northern Pacific Airways

 

Northern Pacific Airways has already purchased its first aircraft, a 27-year-old Boeing 757-200 N627NP, and has plans to operate 6 aircraft at launch. Fleet data from IBA’s aviation intelligence platform InsightIQ indicates the airframe was previously operated by US Airways and American Airlines, before being stored in 2020 following the latter's retirement of the type.

 

The Boeing 757 is not a common aircraft choice for start-up airlines. Research published by IBA in Mid 2021 indicates the Airbus A320, Boeing 737 and Airbus A330 were the top 3 most commonly utilised aircraft by start-ups based on operator instances. The Boeing 757 did not feature in the top 10. That said, the longer range, mid-density narrowbody could prove to be a smart choice for Northern Pacific’s specific model in advance of more contemporary types becoming available. It is notable that the 757 has proven to be the backbone of Icelandair’s transatlantic stopover operation.

 

 

As of 26 October 2021, IBA’s InsightIQ records 157 active Boeing 757-200 passenger aircraft, out of 312 in service globally.  The majority of these are operated by operators in the North America region, with Delta Air Lines and United Airlines being the largest global operators. The average age of the 757-200 fleet globally is 25.1 years.

 

Northern Pacific Airways aims to launch in the third quarter of 2022.

 

IBA’s InsightIQ analysis platform flexibly illustrates multiple asset, fleet and market positions, actual and potential, to inform client choices and identify acquisition opportunities. Immediate access to crucial aircraft, engine, lease rate and fleet data eases appreciation of historic and future aircraft concentrations and operator profiles.

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