There’s good and bad news out of Norse Atlantic Airways today, which is worthy of more than a glance. Let us dive in.
The good news is that the airline has secured slots at London Gatwick Airport – a previous hub for the airlines’ forerunner Norweigan Long Haul.
However, it seems events in Ukraine has pushed back the launch of the airline, as fuel prices have shot up. The airline was due to commence operations at the end of March. This has been pushed back.
Sales of tickets are now planned to start in April, with its first long-haul route announced then. Currently, the airline has published maps but has not announced the first destination to operate out of its Oslo hub.
Although given that bases exist in Oslo and Fort Lauderdale, there might be more than a few clues there.
Operations are expected to commence in June. No exact dates were announced.
Norse intends to commence flights in June, flying between Norway and select destinations in the U.S. It plans to add other European destinations, such as Paris and London, as soon as the market situation
allows. Recently securing important slots at London Gatwick Airport gives the airline access to one of the most attractive markets in Europe. The slots were awarded to Norse at no cost by the UK airport slots coordinator.
In Quotes
CEO and Founder Bjørn Tore Larsen of Norse said:
“The tragedy unfolding in Ukraine creates uncertainties within international air transport that we take seriously. Norse’s flexible fleet arrangements, low cost base and strong financial foundation allow us to take a careful approach to launch. We are in a unique position as we have not yet started flying, which gives us the advantage to enter the market cautiously in line with demand and quickly adapt to unforeseen events. A gradual approach where ramp-up is exclusively driven by demand, will enable us to preserve our strong, debt-free balance sheet and cost base,”
“We’re thrilled to have been awarded slots to operate flights to and from London Gatwick Airport as it gives us access to a very attractive market. We look forward to working closely with the great team at Gatwick Airport,”
“We have the necessary flexibility to quickly adapt to unforeseen events and ramp up with more aircraft and affordable flights to exciting destinations as soon as the market situation allows. A highly motivated Team Norse and the fact that we currently only pay for our aircraft when they are in operation also gives us a competitive advantage,”
“The current global situation makes it challenging to predict the demand for transatlantic travel. However, we strongly believe that the demand will bounce-back with full force because people will want to explore new destinations, visit friends and family and travel for business. Norse will be there to offer attractive and affordable flights on our more environmentally friendly and fuel-efficient Boeing 787 Dreamliners to both leisure and cost-conscious business travelers,”
Hoping for lower fuel prices and the critical summer season
In some ways, the airline is in a better position than some, as it isn’t spending that much on fuel at this time. However, costs of staffing will still need to be met, as well as keeping the airline in a “ticking over position”.
With plans to launch ticketing in April, for a June launch, it seems the airline is going to try and ride out one of the biggest costs of running an airline – the fuel to power the aircraft with.
However, this will come at the cost of gaining those early passengers, building loyalty and the ramp-up of the beginning of the summer season. And for this airline to succeed, it will need low costs (both in terms of leasing, staffing and fuel), as well as the passengers who are paying to support this operation.
Missing that summer window, where passengers are prepared to travel from A to B and pay the premium to do so is critical for any airline’s bottom line – could be not good for the airline in the longer term.
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