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‘Norwegian Mark 2’ is here, flying UK to US with a Boeing 787. What could go wrong?

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Welcome, Norse Atlantic Airways. Laugh or cry, but you haven’t seen the end of Norway’s attempts to succeed in low-cost long-haul flying.

With the original airline now virtually dead, flying just a handful of routes in Norway, founder Bjorn Kjos is back with a new airline.

Say hello to Norse Atlantic Airways

Norse Atlantic Airways will use a fleet of Boeing 787s (sounds familiar?) to connect cities such as New York, Los Angeles and Miami with London, Paris and Oslo (sounds familiar?).

The airline is even using the exact same aircraft that Norwegian used, so you will be seeing the old Norwegian seating back in action. Norse Atlantic has apparently signed deals to lease nine ex-Norwegian Boeing 787 aircraft and is in discussions over a further three.

The three founding shareholders, including Kjos, have raised $24 million according to Norwegian publication Dagens Naeringsliv.

Does Norse Atlantic have any hope of succeeding?

Is this idea totally crazy? It could go either way.

Part of the reason that Norwegian failed was that it had bet its future on the Boeing 787 and Boeing 737 MAX aircraft. This was unfortunate, to put it mildly.

The Rolls-Royce powered variant of the Boeing 787 suffered technical issues for many years. It was only late last year that Virgin Atlantic finally had a fully functioning Boeing 787 fleet. Despite having other aircraft as back-up, Virgin had been forced to lease four ex-airberlin A330-200 aircraft so it could operate its planned schedule.

Norse Atlantic AIrways

Norwegian was hit harder, and the chances of your flight being cancelled or swapped to a random charter airline were high. EC261 compensation payments were substantial. It even happened to us on a HfP review flight, although that one worked in Anika’s favour as her Premium seat was swapped for a flat bed.

Simply having a fleet which is reliable puts Norse Atlantic in a good place.

I also have little doubt that Norse Atlantic has struck an excellent deal for its aircraft. There are not many people rushing to lease 12 Boeing 787 aircraft at the moment. It will launch with a cost advantage and, as the aircraft all came from Norwegian, a standardised fleet both internally and mechanically.

The timing is either great – to meet the travel recovery of 2022 – or terrible, if flight prices are cut to the bone as legacy airlines find it harder than expected to fill seats.

Norse Atlantic can’t beat the other hard truths about long-haul aviation, unfortunately:

  • the majority of the profit comes from passengers in premium seats, so not having flat bed Business Class puts you at a big disadvantage
  • higher paying corporate travellers will always gravitate to airlines with more daily flights, more ability to get you home if something goes wrong, services to primary airports and a compelling frequent flyer scheme
  • low cost never really means low cost, once you factor in the opportunity cost of inconvenient travel times and secondary airports, as well as baggage, seating – and potentially food and IFE – fees

I wish it well, however. Whilst JetBlue will provide price competition on the UK to New York and Boston routes from late 2021, we need someone else to keep the price pressure on Florida and the US West Coast.

Comments (34)

  • Colin MacKinnon says:

    This is just what I say about “saving airlines” or “saving airports”.

    If they go bust and the shareholders are wiped out, the airframes will still be there, the trained crew (pilots in particular) will still be there, and the runways and terminals will still be there.

    Yes, the owners will be different. But if people want to fly, the infrastructure and staff will not disappear if we can’t fly for yet another year. So that will still all be there for the upturn.

    The market, obviously from yesterday’s news, believes BA will still survive.
    Is Stelios so sure about Easyjet – he’s refusing to put any more money in (he says!). He might be better doing a Norse, pick up cheaper staff and aircraft and cherry picking Easyjet’s most profitable routes?
    As for Virgin Atlantic, who never really made any money in the good times….

    • Matthew says:

      Staff were all made redundant on statutory terms.

    • Tiny says:

      Airports won’t necessarily be there if the owners decide to cut their losses and sell the land for housing development…

      • Andrew says:

        Has that happened with a passenger airport in the UK in recent memory?

        Even PIK keeps hanging on.

        • David Cliff says:

          Plymouth

          • C says:

            And nearly Manston. And I think Cambridge is headed that direction as well (though no commercial flights in a few years).

  • BJ says:

    Would love to see them marry Virgin! They’re made for each other … Norwegian Virgin or Virginia Norwegian, take your pick.

  • Richard M says:

    The other hard truth about long-haul is the further you go, your disruption costs rise exponentially in terms of crew and compensation. Wafer thin profit margins easily turn into huge losses.

  • mr_jetlag says:

    I hope they survive. I had fond memories of the (then new) 787 “premium” seats into JFK.

  • KBuffett says:

    The hard truth is that people will walk away having made a lot of money when they go bust.

    • Nick says:

      Good post!

      IMHO, that sums it up very nicely!

      Thankfully someone else that’s probably been around for some time, not just in travel, and has most of the T-shirts in these scenarios already!

  • Chaz says:

    Raised $24m? I know it’s a different beast, but at the beginning of the pandemic, IAG were burning $1 million per hour so this would have lasted them one whole day.

    There is obviously a lot of debt going in alongside this – secured against fresh air if the frames are leased so unless debt is going to be used to fund loses (unusual) this doesn’t sound a sustainable capital structure.

    I wish them well, but it does sound unlikely the plan could withstand much of a headwind.

  • Mike says:

    Doesn’t founder Bjorn Kjos look rather like Freddie Laker standing there next to his model plane

  • roberto says:

    I will never get on a plane that looks like an excited male dog.

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