Summary
- Norse Atlantic Airways plans to sublease a few of its Boeing 787-8 and 787-9 aircraft to other airlines to take care of money reserves and avoid excessive capability.
- The airline has prolonged its subleases for 3 Boeing 787-8 and one 787-9 aircraft, with the planes to be redelivered between March 2024 and May 2025.
- Norse Atlantic Airways goals for regular growth and profitability despite challenges corresponding to high fuel prices and softening demand, posting its first net profit in Q3 2023.
Norse Atlantic Airways has provided an update on its fleet, saying that it is going to only operate its 15 Boeing 787s from May 2025, as it is going to be subleasing some 787-8 and 787-9s to shore up its money reserves and ensure it doesn’t add an excessive amount of capability to its network.
Subleasing to other airlines
On February 12, 2024, Norse Atlantic announced that it had prolonged 4 subleases for 3 Boeing 787-8 and one 787-9 aircraft. The Boeing 787-8 subleases have been prolonged for a 12 months from the unique return date, while the 787-9 agreement was lengthened by two months.
Because of this, the three Boeing 787-8 will now be redelivered to the long-haul low-cost airline between March 2024 and May 2025, while the 787-9 will return to the carrier in early May 2024, just before the beginning of Norse’s peak summer flying season.
Photo: Vincenzo Pace | Easy Flying
In total, Norse Atlantic Airways has 15 Boeing 787s, that are all on long-term flexible lease terms that were agreed in 2021. The carrier noted that the lease rates were at historically low prices back then, and the agreements had no inflation-related adjustments, ensuring favourable pricing throughout the lease period.
All 15 were formerly operated by Norwegian, which exited the long-haul low-cost market in January 2021. As a substitute, the Norway-based airline, which has had Air Operator’s Certificates (AOC) and bases across Scandinavia and the UK, pivoted to concentrate on short-haul flights with its fleet of Boeing 737 aircraft, including the 737 MAX.
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Bjørn Tore Larsen, the chief executive officer (CEO) of Norse, said that the sublease extensions provide further opportunities for the airline to secure additional total money profit through the prolonged sublease periods. The airline’s strategy relies on regular growth and responding to the market demand, noted Larsen, adding that within the upcoming summer season, it is going to operate 12 Boeing 787s.
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The agreement will provide a money injection for the Norwegian-based airline following a discount in its flying schedule.
Eyeing profitability
The airline, which began operations in June 2022, posted its first net profit in Q3 2023, ending the three-month period with a net profit of $1.6 million, improving on the prior quarter’s $26.2 million loss. In Q1 2023, it finished with a net lack of $70.9 million.
Still, Larsen warned that the delicate profit margin was challenged by high fuel prices, a weak cargo market, and softening demand at the top of the quarter, which coincided with the beginning of the winter season, a typically slower period for the airline industry.
Photo: Norse Atlantic
At the identical time, its short-term outlook said that it was staying on target to develop into profitable, despite being only in its second 12 months of operation. The airline also highlighted that its aircraft had a mean lease term of 10.5 years on September 31, 2023. The lease agreements are going to be adjusted from power by the hour (PBH) to fixed rates after the primary two years of operations.
When Larsen spoke with CNN in early January, the CEO remarked that he expected the low-cost carrier to be profitable through the 12 months, adding that he expected to be loss-making during its first 12 months of operations. The chief also reiterated that Norse has been responding to the demand, fastidiously adding capability to routes where it may make sure it grows profitably.
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