Norse Atlantic plans dirt-cheap transatlantic flights. Can it succeed?
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Those are just a few of the airlines that have tried — and failed — over the years to provide sustainable low-cost, long-haul service.
Now, a new entrant is attempting to master low-cost long-haul. With its inaugural flight earlier this week (with TPG onboard), can Norse Atlantic Airways succeed where a long list of predecessors have failed?
It can, if it maintains discipline, according to airline industry analyst Henry Harteveldt, the president of Atmosphere Research.
“Long-haul, low-cost can work, but it requires a lot of discipline,” Harteveldt said in an interview with TPG. “And what we saw happen in the past, whether it’s Laker SkyTrain, People Express, or most recently, Norwegian, is that the carriers got way ahead of themselves, ended up with too many aircraft and started looking for places to operate those aircraft without always doing the level of due diligence in their planning and analysis that they probably should have.”
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Norse is an indirect descendant of Norwegian. Norwegian’s founder, Bjorn Kjos, is a co-founder of Norse Atlantic and owns part of the airline. The Boeing 787 Dreamliners Norse will fly were inherited from Norwegian after that airline shut down its long-haul division amidst the COVID-19 pandemic.
Just don’t make that comparison to Norse’s CEO, Bjorn Tore Larsen.
“We are nothing like Norwegian in terms of strategy,” Larsen told Travel Weekly in a January interview. “Norwegian was basically a hub and spoke operator flying multiple types of aircraft. We are a dedicated, long-haul carrier only, and we will be flying exclusively one aircraft type. So we have a very focused operation.”
Norse launches Tuesday with flights between New York City’s John F. Kennedy International Airport (JFK) and Oslo Airport-Gardermoen (OSL). It will then add flights between Oslo and Fort Lauderdale–Hollywood International Airport (FLL), Orlando International Airport (MCO) and Los Angeles International Airport (LAX).
Later this summer, Norse will add flights from London Gatwick Airport (LGW) to New York and, for a limited time, Oslo. Last week, the airline announced its third European gateway, Berlin Brandenburg Airport (BER), which will see flights to New York and Los Angeles, beginning in August.
Bare-bones introductory fares on Norse’s routes are priced below £166.77 one-way. Norse’s pricing model is that of an ultra-low-cost carrier, meaning that extras — from seat selection to meals to carry-on baggage — are available for an additional cost when the cheapest fare is selected.
Norse has a lot going for it, but it’s simultaneously launching in a difficult environment.
The airline commences its operations during a period of very high jet fuel costs. Other airlines have passed these high costs on to passengers, but because of its low fares, Norse isn’t. Part of Norse’s answer to the high fuel costs is its lease of those Boeing 787 Dreamliners, among the most fuel-efficient widebody aircraft on the market. Norse is dubbing its fleet of Dreamliner “longships,” which will also serve as the airline’s callsign for air traffic control purposes.
Norse will also lack a connecting flight network on either side of the Atlantic — something that Norwegian benefitted from during its heyday in the late 2010s when it maintained short- and medium-haul networks at a number of European hubs. Norwegian operated vast hubs in places like Oslo, unlocking most of Europe for travellers who weren’t booked on one of the carrier’s point-to-point international flights. Now, passengers on Norse wishing to travel beyond Oslo, London or Berlin will be responsible for purchasing their own onward tickets. This comes with the risk of travellers misconnecting to a new airline.
Although jet fuel costs are high, Norse’s launch comes during a fortuitous period for another key component: demand. After more than two years of pandemic-induced decimation of the travel industry — particularly international travel — many airlines now report that leisure bookings are above 2019 levels. Norse especially lucked out with the timing of Friday’s announcement that the U.S. is scrapping its pre-departure testing rule — the airline will launch two days after the rule is eliminated. Analysts widely expect to see additional demand for international travel with the elimination of the rule — demand that should benefit Norse.
In order to succeed, Norse will need to move past its introductory fares and start raising prices to a point that can adequately cover costs like fuel, Harteveldt said.
“Norse is going to have to find a way to price its product so that it can be on a path to making money,” he said.
Larsen seems fully aware of the tall task ahead of him and his airline.
“I only have one ambition now and that is not to go bankrupt,” Larsen said in an Aviation Week podcast interview in May. “But I hope we are at least a 50-aircraft airline and maybe more.”
Featured photo courtesy of Norse Atlantic Airways.
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