NCLH Scales Back Included Airfare in Cost and Yield Push

Norwegian Cruise Line Holdings is reworking how it handles air travel for both guests and crew, a move the company expects to lift revenue and lower costs as part of its turnaround.

Guest and crew air optimization, along with refinements to promotional offerings, are behind an additional $100 million in expected run-rate benefits the company announced on its third quarter earnings call last Thursday.

On the guest side, the change centers on a smaller proportion of guests sailing with airfare included in their cruise fare.

“I look at this airfare program that we were doing as basically a marketing subsidy, and so when that goes away, that obviously will affect your revenue line,” said John Chidsey, CEO of Norwegian Cruise Line Holdings. “But if you look at the crew cost, that piece obviously is in your cost. So it’s a little bit of both.”

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