Norse Atlantic expects first profit in Q3 |

Norse Atlantic expects to record its first quarterly profit in Q3 as the airline is in full production and has ramped up activities since late May. This came too late for Q2, which in line with expectations ended with a loss. The carrier expects longer booking windows to have a positive impact on ticket sales, it said on August 31 in its Q2/HY1 earnings presentation. During Q2 in May, Norse activated all ten Boeing 787s for its own use to double capacity and operated at full capacity for the first time in June. It launched services from London Gatwick to Orlando and Fort Lauderdale on May 25/26 and to Washington on June 1 (main picture). Rome to New York started on June 20, followed by London Gatwick to Los Angeles on June 30 and LGW to San Francisco on July 1. Consequently, capacity as in available seat kilometers (ASK) was up by 51 percent quarter on quarter, and passengers carried by 86 percent to 205K. But the ramp-up came too late to make a material contribution to the financial results. of Q2. While revenues grew to $100.1 million from $3.0 million last year, Norse produced a $-26.2 million operating loss in Q2, which is identical to that of Q2 last year. The net loss is $-35 million versus $-36 million last year. EBITDAR is $2.2 million versus. Operating expenses of $97.9 million versus $14.5 million reflect the increased activities. On the positive side is the cash flow from operating activities, which was $19 million versus $-16.7 million in the same period last year. Revenues per ticket per passenger were $335, with ancillary revenues of $87. In HY1, revenues increased to $139.9 million from $2.973 million in HY1 2022. Expenses add up to $170.6 million from $20.4 million. The operating loss was $-88.7 million versus $-39.8 million or a net loss of $-106 million compared to $-52 million in 2022. Cost per ASK or CASK excluding fuel was $6.36 cents, passenger revenues per available seat kilometer (PRASK) $3.90 cents for HY1 but $5.04 cents in Q2. Total cash stood at $59.1 million at the end of June, with a $7.0 million increase in cash and cash equivalents thanks to the higher free cash flow. Total liabilities stood at $261 million. The airline has not hedged fuel, which could pose a risk if prices go up again. Fully operational in HY2 “The financial year 2023 will be Norse’s first year that has production through all months, though the first half will be of limited activity as Norse ramped up from the end of May and through June, ahead of the peak summer months and onwards; it will be the second half of 2023 that Norse is fully operational with all aircraft generating revenue, with ten aircraft in own operations and five aircraft subleased out,” the airline says in its financial report. A turning point was already reached in June, which was the first month in which Norse turned in a profit. The airline says that this trend should have continued in Q3, resulting in the first quarterly profit since the airline commenced operations. Norse points to the short booking windows, with the summer season offered only from late February. This situation has now changed: “As Norse is able to increase its booking window it is expected to have a positive impact on ticket sales as customers will have a longer period to make bookings. Norse released its first winter 2023 tickets for sale on 29 March and added further routes thereafter, and by the end May had its full winter program available for sale.” I didn’t help either that tickets were offered only on its own website, but this has also changed now. Subleased 787s returned before the summer 2024 This makes CEO Bjorn Tore Larsen optimistic for Q3, in which it already welcomed the one-millionth passenger that booked with Norse. July was the busiest month in its history with 151K passengers, up 53K from June. Not only will the airline produce higher revenues from its own operations with the ten Dreamliners in service with Norse, but also from five 787s that are leased to Air Europa. These generated $8.4 million in lease rentals. Two aircraft were on power-by-the-hour rentals by the end of June. The five subleased aircraft will be returned to Norse between March and June 2024 and could be deployed on its own network or subleased out again. As it reduces its own schedule during the weaker period, Norse is offering aircraft on wet lease for the upcoming winter season. Norse said last month that it will operate to Miami this winter from Berlin and Paris too, in addition to the existing services from Oslo and London Gatwick.

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