Norse Atlantic Learns the Best Way to Make Money is to Fly for Someone Else

Had you told 2021 me that Norse Atlantic would still be flying in 2025, I’d have been surprised. And if you told me that it might actually make money that year, I’d have started laughing. But sure enough, Norse Atlantic is still around, and it thinks it can be profitable this very year. How is this even possible?

To paraphrase the Beatles, they get by with a little help from their friends. This airline has good friends that keep pumping money into the airline, mostly named Bjørn. They’ve also made a new friend in India who is going to make their lives easier.

In 2021, Norse Atlantic started off as a scavenger, living off the carcass of Norwegian’s failed long-haul unit. Norse’s plan was to take over a dozen Boeing 787s at a reduced rate and make money flying them. There was no short-haul operation — you know, the profitable part of Norwegian — and there was also no insane level of organizational engineering. It just wanted to make money flying airplanes. How quaint.

Of course, it didn’t think it could ramp up that quickly, so it leased out airplanes to Air Europa while it hoped to build service. Feeling delusional, it also agreed to take on additional aircraft with a new plan to build to 15 787s. It promptly lost a whole bunch of money.

Despite a tiny profit in Q3 2023 thanks to a strong summer, the airline lost nearly $169 million for the full year — $64 million of that in the fourth quarter alone — on just shy of $440 million in total 2023 revenue for a net margin of -38%. It still had nearly $55 million in cash, but it had burned through more than $20 million through operations in the 4th quarter.

This thing is dead, right?

Not so fast. The airline went hunting for more money, and it found it. It shook the money tree and raised about $15 million from its founder and CEO. There was another $6.3 million shareholder loan — which remains undrawn today — and it was able to extend the maturity date on a $20 million loan from December 15, 2024 to March 31, 2026. Norse also decided to shrink down to 12 airplanes, returning the three 787-8s it had and focusing instead of the 12 787-9s.

On top of that, it decided to do something crazy… try and fix its underlying business. First, it promised to slash costs. Unit costs in Q4 2024 were actually down 10 percent vs Q4 2023, though we can probably point to reduced fuel prices as the primary mover there. Then it had to fix the revenue side of the equation, especially in those lean winter months.

Norse figured out that it had too many airplanes, even after having given three of them back. If it wanted to improve revenues, it would need to fly fewer of them. It already had developed a leasing business, having several aircraft placed with Air Europa. Three of those were the 787-8s that it returned to the lessor. It also had a 787-9 that it placed with Italian airline Neos this winter. That airplane started flying in December and the deal will end in April. So it began working on more clients. More on that later.

In the meantime, it also figured out that if it flew fewer airplanes to better places, it might actually be able to make more money. Here’s a look at the Q4 2023 route map:

^{Data via Cirium, Map generated by the Great Circle Mapper – copyright © Karl L. Swartz.
red means did not return in Q4 2024}

The airline canceled most of its Oslo flying, leaving only a reduced schedule to Miami and a flat schedule to Bangkok this winter. It also slashed London winter flying, ending Barbados, Boston, Montego Bay, San Francisco, and Washington/Dulles in the quarter. The number of flights dropped to other US destinations, and Norse added Cape Town and Las Vegas to the schedule.

It also moved into Athens and boosted Rome. The only oddity? It grew Berlin a fair bit which doesn’t seem like a great winter market. But overall, this was a much better plan than in the previous year. Here’s the map for Q4 2024:

^{Data via Cirium, Map generated by the Great Circle Mapper – copyright © Karl L. Swartz.
green means was not flying in Q4 2023}

The end result was pretty impressive. It saw unit revenues increase by 22 percent in Q4 2024 vs last year. Part of this was an improved fare, but the real change was that the airline’s load factor jumped from 70 to 92 percent in the fourth quarter thanks to flying places people actually want to fly.

Operational results weren’t great. The airline showed that it completed nearly all of its flights, but it ran less than 60 percent of them on-time. Why? It blamed airport and air traffic control issues.

In the end, the financial results in Q4 were surprisingly strong. After losing that awful $64 million on only $95 million in revenue in 2023, it lost “only” $35 million on $123 million in revenue. Is that great? No, it’s still a -28 percent margin, but I’ll take that over -68 percent any day.

Even better news for the airline came in the form of India’s IndiGo which wants to get into long-haul flying. It started by wet-leasing a single aircraft in March, and it will place three more at some point in the second half of 2025. That means Norse has four of its twelve aircraft making money for the airline, and it only has to schedule the remaining eight.

This does not mean it is all sunshine and rainbows for Norse. It was sitting on a mere $22.9 million in cash at the end of Q4, but the quarter was actually cash-positive for the airline. It also has that extra $6.3 million loan that it hasn’t tapped into. At this point, it’s fair to assume it should live to see the summer. If it has a great summer, then maybe it will live to see another year. If not, well, then that’s going to make for a very lean winter.

Of course, this may not end up well for the airline as demand from Europe to the US is poised to be depressed thanks to what the current US administration has done both politically and economically. Maybe this benefits Norse with its cheap fares, but more likely is that the other airlines will fight for every passenger if a slowdown does extend through summer, and Norse will be scratching and clawing for load factor. At least things do seem to be moving in the right direction.