Oil prices are having a negative impact on airlines, and are increasing operating costs, as much as the market will allow. Higher fuel prices are causing an airline startup to delay its launch.
Norse Atlantic Airways plans to offer low cost flights between the US and Europe. The airline will largely duplicate what Norwegian did before it discontinued long haul flights.
Norse has some advantages over Norwegian, including a clean balance sheet, better aircraft lease terms, and a more conservative approach to ramping up operations.
The airline was supposed to launch in the next couple of months, but has now pushed that back a bit. The flights will be launched in June and tickets will be on sale in April.
The reason? Because of high fuel prices. The decision was described by Norse founder and CEO Tore Larsen.
“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.”
Most airlines don't have the flexibility to just park planes for extended periods in a sustainable way because of high fixed costs.
This is a big advantage for Norse Atlantic Airways. The airline isn't paying for space at major airports, and the lease costs for parked Boeing 787s are low.
Initially, the plans are to fly from OSL to Fort Lauderdale, New York Stewart, and Ontario.
The plan is to add other European destinations, including London and Paris, as soon as the market situation allows.
The carrier plans to ramp up operations.
“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.”
The launch of Norse Atlantic Airways is being delayed due to high fuel prices. The airline will put tickets on sale in April. After that, the flights from London and Paris are expected.
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