Low-cost transatlantic airline Norse admits it’s in financial difficulty, sending shares plunging 33% – after predecessor Norwegian flopped during COVID
- Norse is the latest transatlantic airline to find itself in financial trouble
- Its stock fell 33 per cent on Thursday after announcing its Q3 results
- It announced it is facing ‘headwinds’ from high fuel costs and a weaker cargo market than expected
Low-cost transatlantic airline Norse has admitted it’s in severe financial difficulties, sending its shares plunging and putting it on course to fail like many predecessors.
The Norwegian carrier said it needs to urgently raise $45 million to pay a ‘key supplier’ and that it was facing financial ‘headwinds,’ with stock plummeting 33 percent as a result, Bloomberg reported.
It is the latest in a string of carriers that have tried and failed to make budget transatlantic flights possible, after its predecessor Norwegian Air Shuttle was forced into bankruptcy during the pandemic. Norwegian subsequently nixed its transatlantic routes, although it continues to fly within Europe.
Other low-cost carriers that have tried – and failed – to ply the Atlantic at rock-bottom prices include Icelandic-based Wow airlines and Primera Air, which offered low cost fares between the US and London.
Norse was founded in March 2021 and flies between Europe and the US with a fleet of Boeing 787 Dreamliners from the failed transatlantic branch of Norwegian.
Despite a profitable last quarter, the airline’s stock slumped 33 per cent after announcing its Q3 results on Thursday in Oslo.
Norse is the latest transatlantic carrier to find itself in financial difficulty
Norwegian was forced to fold its transatlantic wing during the pandemic
It said it had to raise an additional $45million to tide it over the slower winter months and to pay a ‘key supplier’.
The carrier admitted it is facing ‘headwinds’ from increasing fuel costs, and that the cargo market has been weaker than it anticipated.
It added that it had been approached by possible suitors ‘seeking to explore industrial opportunities,’ suggesting that it could sell a stake in the airline.
It did not elaborate on the nature of the discussions.
It explained that ‘adverse working capital movement led to a reduction of available liquidity’.
Chief executive Bjørn Tore Larsen hopes to offset the anticipated winter losses by renting out his fleet of Dreamliners to other airlines for money-spinning charter operations, a process known as wet leasing.
Norse Chief executive Bjørn Tore Larsen is planning to lease Dreamliners to other airlines during the slower winter season
Larsen said: ‘Norse Atlantic has come a long way since the initial flight in June 2022. After a short first summer season in 2022, we had our first full summer season in 2023, growing to a 10 aircraft operation while delivering a robust performance.
‘We are proud to have delivered our first profitable quarter and we continue to be agile and adapt as a company to achieve our goal of becoming the leading low-cost long-haul airline of choice.’
The airline flies between New York, Los Angeles, Miami, Orlando, Boston, Washington, Jamaica, Barbados , Oslo, London, Berlin, Rome and Paris.
It took the place of Norwegian Air Shuttle which was forced to fold its transatlantic wing during the pandemic.
Norwegian was a pioneer in low-fare transatlantic air travel, but its rapid expansion left it with debt of close to $8 billion by mid-2020, making it vulnerable to the fallout from the COVID-19 pandemic.
After filing for bankruptcy, it was forced to drop 105 aircraft, leaving it with just 51 planes.
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