Predictable: Norse Atlantic Cancels Winter Flights

This summer, Norse Atlantic Airways began operations. Before Norwegian discontinued long haul flights while on the verge of insolvency, the airline was mostly replicating what they did.

The long haul ultra low cost carrier business model is unprofitable due to the seasonal nature of leisure demand. That is a lesson that is being learned by Norse Atlantic.

Norse Atlantic axes winter schedule

After launching flights to Los Angeles, Norse Atlantic has just canceled hundreds of flights. Norse Atlantic has a winter schedule.

• Canceled Berlin (BER) to Los Angeles (LAX) service; this was supposed to operate 3x weekly
• Canceled Oslo (OSL) to Los Angeles (LAX) service; this was supposed to operate 3x weekly
• Reduced Oslo (OSL) to New York (JFK) service from 7x weekly to 3x weekly
• Reduced Oslo (OSL) to Fort Lauderdale (FLL) service from 3x weekly to 2x weekly

Which routes will be operating this winter? The airline currently plans to operate on two routes that still have service.

• Oslo (OSL) to London (LGW) service 7x weekly
• London (LGW) to New York (JFK) service 7x weekly
• Berlin (BER) to New York (JFK) service 3x weekly
• Berlin (BER) to Fort Lauderdale (FLL) service 3x weekly

Who knows if there will be more route cuts in the coming weeks. Ultra low cost carriers often have a lot of trial and error with new routes, so it's a bad thing for consumers. It is frustrating when you plan a trip around a flight only to have it changed. I think the airline will not accept passengers on other airlines.

Is Norse Atlantic’s business model sustainable?

I want long haul carriers to succeed. The business model hasn't worked in the past. The business model of Norse Atlantic is very similar to Norwegian's.

Is Norse Atlantic going to fail? The new carrier is to be applauded.

• Norse Atlantic has leased Boeing 787s on much better terms than Norwegian did, so that helps in terms of cost structure
• Norse Atlantic management has been very clear that the airline has the luxury of parking planes when the demand isn’t there, though that only works for so long
• I have to give credit to Norse Atlantic’s management team for at least thinking outside of the box; for example, the airline has allegedly subleased out four Boeing 787s, which helps with covering costs

Bjorn Tore Larsen, the CEO of Norse Atlantic, said recently that the airline might cut winter routes due to high fuel prices and inflation.

“The winter season is historically more challenging for the industry and this year faces the additional burden of high fuel prices, increasing inflation in the markets that we operate and uncertainty in overall demand. Norse Atlantic will continue to evaluate Winter 2022 routes in line with demand and profitability.”

The airline has a good amount of cash, but it only gets you so far if you have aircraft lease payments and passenger demand is low.

The load factor in August was not great. The airline had an average load factor of 69%, which is below the industry average for a summer of unprecedented leisure demand, but it still takes time to get the word out.

I don't think this will work in the long run, despite the fact that Norse Atlantic has a competitive advantage. Do you want me to ask?

• Since long haul ultra low cost carriers rarely achieve close to a 100% load factor, I think the airline should reconfigure planes into a three cabin layout, and offer business class seats as well; this could be a unique value proposition with a flat bed but without the other typical frills associated with business class
• In addition to the business model of actually selling tickets on flights, the airline could lease out its planes to other airlines, as needed; that’s potentially a more consistent revenue stream, and having a three cabin layout would make the product useful to more airlines

Bottom line

The airline is suspending flights to Los Angeles and is reducing other routes as well. It's very hard to operate profitably in winter across the Atlantic without business travel, and that's what Norse Atlantic is facing.

I would like to see how the Atlantic has evolved over time.

What do you think about the winter route cuts?

There is a tip to Ishrion Aviation.