Startup Norse Air bets on London-NY boom surviving slowdown

Startup airline Norse Atlantic ASA, which begins UK-New York flights Friday, said it will rely on strict cost control and the strength of Europe-US travel to endure headwinds from spiraling inflation and slowing economies.

The discount carrier, which operates Boeing Co. 787 jets from the failed trans-Atlantic arm of Norwegian Air Shuttle ASA, is starting off slow with a single daily service from London’s Gatwick hub to New York John F. Kennedy, 

“If we try to grow too fast, if we are getting too optimistic, buying too many aircraft in a hot market, these kinds of things can be deadly,” Chief Executive Officer Bjorn Tore Larsen said in an in interview. While previously involved with Norwegian Air via his transport-crewing company OSM, he insists that Norse is a new entity with a new business model.

Norse is commencing UK operations as the peak summer season enters its final weeks and amid mounting concern that rising living costs could dent travel demand over winter and into next year. Larsen said the squeeze will inevitably impact discretionary spending but that as a low-cost specialist the airline should also benefit as travelers seek budget options over premium fares.

“If people are given a choice between paying their electricity bill or going on a long weekend to America, they’ll pay the bill,” he said. “But if they can choose between a trip to New York or a new TV, I think a lot would go to New York.”

Profit Target

Larsen said he expects Norse, which began flights to the US from Oslo in June, to become profitable in 2023. The carrier will remain long-haul-only he said, unlike Norwegian Air, which had a large European network competing with cut-price rivals led by Ryanair Holdings Plc.

The new airline managed to recruit employees, including some from Norwegian which now operates a much smaller short-haul network, at the height of the Covid pandemic, putting it ahead of established carriers that are now struggling for staff amid a labor crunch.

Costs from the fleet of 13 787s widebodies -- to be joined by two more this quarter -- will be kept down by lease terms requiring payments to be made only when they’re flown.

Initial flights to the US from London will originate in Oslo, using a Norwegian air operator certificate, while Norse waits on a UK permit. The route joins services from Oslo to JFK, Orlando, Los Angeles and Fort Lauderdale, with operations from Berlin to New York and Los Angeles planned later this month.

Larsen said the carrier is still working on deployment plans for the winter, though most destinations will be retained. Flights from Paris are also planned.

Norse’s JFK services are scheduled to depart Gatwick at 1:30 p.m. local time, touching down at 4:25 p.m. in New York, according to its website. Flights for September were available from $253 one way.