Norse sounds warning as transatlantic fares dip ‘below expectations’

Norse Q2 warning
By Linsey McNeill
Home » Norse sounds warning as transatlantic fares dip ‘below expectations’

Norse Atlantic, whose network includes flights between the UK and the US, has told investors that its revenue in the second quarter of the year was ‘below expectations’ due to lower-than-expected fares.

It said it is expecting the third quarter and second half of the year to be profitable, but warned that several factors, including a late-bookings market and a ‘softening’ of market conditions, had ‘negatively impacted’ its near-term liquidity and cash balance.

The Scandinavian airline had hoped to secure outside investment, but a potential suitor, which was looking to enter the long-haul market in collaboration with Norse, pulled out of talks earlier this month.

Norse said: “Terms of the investment were in principle agreed with the potential investor’s management. To Norse’s understanding, the investor’s board made the strategic decision not to enter the long-haul market and consequently did not approve the transaction.”

It added that ‘various working capital initiatives are ongoing’.

The airline operates flights from London Gatwick to New York, Los Angeles, Orlando and Miami. It is also planning to add flights from London to Las Vegas and Cape Town in South Africa this winter.

Norse said its doubled its capacity in the second quarter compared to the same period last year, its traffic was up 122% and its load factor rose from 75% to 82%. However, fares for all airlines operating between Europe and North America were down 10% to 20% in April and May, it told investors.

Bookings for July and August have been ‘satisfactory’ it said, but customers are booking late.

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