Low-cost transatlantic airline Norse Atlantic Airways says it needs to raise $45m (R828m) in capital to see it through the winter.
The announcement sent the company’s shares plunging 33%, but it ended the day down only 18%.
But Norse is reported to have had a strong summer and a profitable third quarter, with a nett profit of US1,6m (R29,35m), its third profitable quarter. And, the airline claims it already has pre-commitments for the entire amount from its largest shareholder, undisclosed existing shareholders and new investors.
The Norwegian-based carrier is a specialist low-cost, long-haul airline operating a fleet of Boeing 787 Dreamliner aircraft (derived from the failed transatlantic branch of Norwegian), from the UK and Europe North America and certain Caribbean states.
It has also just added non-stop flights between Oslo and Bangkok.
Perhaps Norse will buck the trend – carriers that try to build their business on trans-North Atlantic services exclusively have historically lacked success.
Freddy Laker’s Skytrain plied transatlantic skies from Gatwick to New York in the 1970s but went bankrupt in 1982.
Norse’s predecessor, Norwegian Air Shuttle (flying North Atlantic only) was forced into bankruptcy during the pandemic, and while the mother company survived, it reemerged having removed its transatlantic schedules and it now focuses on flying in Europe.
Several have tried the low-cost model on transatlantic flights between Europe and the US and failed, most notably the Icelandic Wow airlines which is reported to have offered the lowest fares between the UK and the US at the time, collapsed in 2019 amid rising oil prices, and Primera Air, which went bankrupt in 2018.
It’s not only LCCs that have failed – at least three business-class-only carriers flying from Luton and Stansted to New York have shut down over the past fifteen years, these being Maxjet, Silverjet and EOS.
However, there now appears to be a renewed optimism among airlines that plan to rely exclusively on these North Atlantic routes.
Another Nordic airline, the low-cost Icelandic carrier Play, offers low fares across the Atlantic, but with a stop in Reykjavik. Play flies from Stansted, Liverpool and Glasgow to New York (Stewart Airport), Boston, Washington, Baltimore and Toronto.
A budding UK low-cost start-up, Fly Atlantic, intends to fly between Europe and the US with a stop in Belfast. It plans to launch in 2025 and will use narrow-body Airbus A321 jets.
There is nothing low-cost about another incumbent, Global, promising to fly from Gatwick to New York and Los Angeles. The company is to retrofit the interior of four Airbus A380 superjumbos to such a high standard that passengers will be “transported back to the golden age of air travel”. First-class passengers are to have chauffeur-driven airport transfers, and they will have a large lounge on board. Drinks will include Laurent-Perrier champagne.
