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Norse Atlantic pushing ahead with plans to sell ‘a material stake’ in the airline

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Norse Atlantic had a plan. It would offer low cost flights between London Gatwick and the United States (with easily the best Premium Economy cabin in the sky) during the summer, and then trim schedules in the winter. The aircraft freed up were to be reallocated to ‘winter sun’ routes such as the Caribbean.

It hasn’t worked well so far. As we have covered in multiple articles, Winter 2023 routes from Gatwick were delayed and in some cases cancelled before they even launched. The planned Winter 2024 schedule for Gatwick is very thin – Barbados is cut from five flights per week to one, for example.

Norse Atlantic pushing ahead with plans to sell 'a material stake'

Summer 2024 flights have been cut from the UK with Washington and Boston dropped. Instead, Norse will launch a series of opportunistic services from Europe to the US, including Athens to New York JFK and Paris to Los Angeles. It has also been operating Oslo to Bangkok this winter.

Norse Atlantic is now interested in selling itself

According to a news release, Norse Atlantic has appointed an advisor with a view to selling a ‘material’ stake in the carrier:

As announced in November 2023, Seabury Securities (Seabury), was appointed as strategic advisor to explore and guide the airline’s future strategic direction. After completion of the initial phase of this process, Norse Atlantic is pleased to announce that the company will now engage Seabury as investment banker to execute some of Norse’s strategic initiatives including developing strategic partnerships with an existing airline which may include a material ownership stake.

“The first phase of the strategic review conducted by Seabury is now complete,  I am pleased that we are now progressing to the next phase with the aim to conclude on opportunities that will ultimately benefit our customers, shareholders and employees,” said Bjorn Tore Larsen, CEO and Founder Norse Atlantic Airways.

The last round of fundraising only concluded in November 2023, when Norse raised NOK 613m ($55m) to see it through the winter.

A few weeks earlier, Norse said that it had been approached by two larger airlines interested in buying a minority stake in the airline. The partners were not named except that one is ‘major’ and the other ‘medium sized’.

The main attraction may be taking over the leases on the fleet of 15 Boeing 787 aircraft given the long wait times for deliveries from Airbus and Boeing at the moment.

However this ends up, it seems that the days of Norse Atlantic as a fully independent airline may be numbered.

Comments (52)

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  • DF says:

    I wonder if Jet2 could be interested in Norse (mainly for the 787 leases)? They have a very healthy short haul package holiday business in Europe and this would enable them to open up Caribbean and, say, Thailand to compete more effectively with Tui. The current seating density would work for their brand, and they have flirted with transatlantic flights in the past with “Christmas shopping” trips to EWR from LBA, MAN and NCL in the past on their 757s (ouch). They also have £1.5bn net cash on their balance sheet…

    • His Holyness says:

      The shopper weekends and hen trips have dried up, people have no money for that. Flying across the pond, F, J and W are full, Y is empty, that tells you everything.

      • Colin MacKinnon says:

        It’s getting tough out there – every day new figures show. And personal experiences!

      • kevin says:

        Correct. My last few flights from UK (and Dublin) to the USA has had a full or nearly full J cabin but dozens of free seats down the back.

        I flew DUB-PHL a few weeks ago with AA in business class. Cabin was full.. Halfway across the Atlantic I decided to stretch my legs and walk to the back. I was shocked at how empty it was. Only 6/28 seats were occupied in PE. Similarly, Y class was only around half full.

        • IanT says:

          Similar experience earlier this week.

          I flew back from Singapore with SQ on Monday on an A380. When I looked I was amazed at how quiet economy was compared to the other cabins.

          I wonder what’s going on there?

        • John says:

          The filling up of the J cabin on AA is helped by staff travel. To european destinations that aren’t LHR with a lot of frequencies the J cabin can easily be filled up by staff travelers. Those being staff themselves and their friends and families. DUB is nice and close to London and you don’t have to pay APD.

        • CamFlyer says:

          I don’t believe that low loads are unusual for transatlantic Y in January/February.

      • the_real_a says:

        If you have visited the states previously, its difficult to justify as value for money right now. The rampant prices, tipping out of control, crime and extortionate hotels – and with the exchange rate as it is, most shopping item’s are available for the same price here. For value conscious people who fly economy, the USA is no longer offering value. Anecdotally I see those who would have visited the states now holidaying in Europe.

    • Matarredonda says:

      They also have a large number of Airbus 320 family aircraft with deliveries starting last year so the money is more than likely being stored up to pay for a chunk of them.

    • Bernard says:

      Sticking to tried and tested places with the A330s, so about 0% chance.
      Nothing wrong with the 757s if you’ve been on Jet2.

      Try that compared to a BA787-8 and its tiny seats then come back and let us know how it went!

  • Chris W says:

    I’m a bit confused by the ‘sell a material stake’. Does that mean they will have a major investor? Or just sell of a chunk of assets (like aircraft) and become a smaller, or nonexistent airline?

    They would have no issues selling off their 787s – there are dozens of airlines who would take them tomorrow.

    • Rob says:

      A shareholding, possibly a controlling one.

    • Bernard says:

      They don’t own the 787s so nothing there to sell

      • Rob says:

        Not true. You can sell a generous lease. Happens all the time in retail – if your shop pays £100/week and next door just paid £200, your lease has real value.

        • Bernard says:

          Aircraft leasing doesn’t work quite the same as uk high street leases. There’s often change of control clauses – it’s what BA used to reopen and negotiate down the previous BMI leases.
          So your analogy doesn’t work. Right now there are aircraft shortages and a lessor (BOC) will use change of control to end the lease and assign it elsewhere (higher paying).

  • Londonsteve says:

    It strikes me the fundamental issue with Norse is that they are flying between expensive bits of the globe while offering an LCC quality product. Some people are remarkably tolerant of discomfort to get from A to B at a low/affordable cost to them, but you need to be flying the backpacker crowd and VFR traffic to and from where they want to go. This is why Wizz Air’s adventure into Asia makes a lot of sense, using Abu Dhabi as a jumping off point. The US and Caribbean are very expensive places to visit for a European. Europe meanwhile is cheap for a US holidaymaker but they’re relatively too rich to care about saving a few dollars flying on an unknown airline with an infrequent schedule. They’d spend the difference between Norse and a OW JV ticket over a light lunch in London directly after arrival!

    • CamFlyer says:

      Not entirely true, IME. Lots of Americans are not frequent flyers, and will buy whatever the OTA throws up as the cheapest nonstop. A friend of ours jumped on Norse last fall JFK-LGW, and other than not having read the checked baggage policy was very happy. On the return to the US she upgraded to Premium, as the price differential was marginal after paying to check luggage. She couldn’t have cared less about the branding, or what days it flew, if it worked for her requirements. This is typical of most who are contemplating a leisure visit. The challenge for any airline is making that customer base profitable without high spending business flyers up front.

      • Londonsteve says:

        Perhaps, therefore, the underlying issue is just an oversaturated TATL market? Others here have anecdotally observed half empty economy cabins on these routes and if the big guns are dumping seats at low prices ‘down the back’, Norse doesn’t really have a chance. For sure the lack of European holidaymakers wanting to visit the US is a big challenge to them all. Until Europeans get much richer (unlikely) or US prices fall significantly (unlikely) I don’t see how this state of affairs will change, barring a significant weaking of the Dollar which is possible in the long term. But then US leisure travellers will find Europe less enticing so it’s a zero sum game. The US is just too expensive, full stop.

    • Chris W says:

      With proper marketing they could eat up the legacies premium economy market given how good their seat is.

      I don’t know why Norse aren’t doing more flying from Scandinavia to Thailand this winter – didn’t Norwegian do it quite a lot?

      • Londonsteve says:

        Everytime someone mentions BKK, someone else comes along and points out the low margin customer base and inefficient use of aircraft due to flight times.

  • John says:

    Willie Walsh always said there is never a challenge stimulating demand and putting bums on seats (particularly over the summer period).

    The problem is that lots of these carriers are low price airlines but not necessarily low cost. Norse will have had to pay significant sums to recruit pilots and lack economies of scale from their small size. Yes they secured attractive lease rates but that still requires high utilisation which Norse can’t achieve over winter. Meanwhile BA have fully depreciated 777s at Gatwick which still beat Norse on ownership costs.

    Norse were doomed to fail from the beginning. I just feel sorry for their staff like those at Flybe that were sold a pipe dream.

    • Bernard says:

      On the 787s: not correct if your lease rate is based on hours flown (Norse struck incredible deals with lessors during Chinese covid times)

      • John says:

        Norse only had power by the hour for the first 12 months of the lease term. As of last year, all their fleet have fixed lease payments.

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