Norse Atlantic ASA will operate a smaller passenger network over the winter season, dropping all services to Los Angeles and paring back flights to New York as the airline works to preserve cash.
The coming months will be pivotal for the Oslo-based long-haul specialist after it burned through half of its cash during the first half of the year. It’s reduced its airline schedule for the slower season, and will hire out more of its fleet to other airlines to provide steady income.
Meanwhile, the airline will introduce seasonal flights from Gatwick to two new destinations, Las Vegas and Cape Town.
Norse has faced a turbulent year. The stock is down 83% as the low-cost carrier struggles to turn a profit and talks to secure a strategic investment fell through. As its resources dwindled, credit card companies held back cash. The company, which competes with more established rivals, said this week that its financial performance has been “weaker than anticipated” this year.
Norse, which operates 12 Boeing Co. 787 Dreamliner jets, was formed during the pandemic with aircraft that were once used by Norwegian Air Shuttle, a discounter that turned away from the transatlantic market after filing for Chapter 11 bankruptcy in 2020.
Norse is pivoting toward becoming more of a charter company that operates its own flights when profitable, Chief Executive Officer Bjorn Tore Larsen said Wednesday on an earnings call. It’s part of a revised business plan that aims to even out revenue and reduce costs.
“Going forward, you’ll see a lot more charters, a lot more secured income,” Larsen said. “As you will see, we have a fairly good control on the cost, and they are on the way down.”
The company had no comment to add, a spokesman said.
Aircraft costs have risen for Norse as flexible power-by-hour leasing contracts have expired, replaced by more expensive fixed deals. That’s added to pressure on the company to utilize its planes more during winter.
There are also concerns about rising competition on transatlantic routes driving down fares. The carrier warned this week that it might need to raise more capital, either through debt or equity, and said it was returning three planes to its lessors to cut expenses.
The airline had total cash and equivalents of almost $24 million at the end of the second quarter, down from $59.1 million in the same period in 2023, and $54.8 million at the start of 2024.
The company said in July that credit card companies have since released cash and improved payment terms. Norse also said it will report an accounting gain on the re-leasing of the three 787s.
“We are going to seek more attractive employment for our aircraft when we see there is demand to charter them out,” Larsen said on the call.
(Updates with new destinations in fourth paragraph)
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