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Norse Atlantic CEO: We Are Not Norwegian Air. Let’s Move On

Madhu Unnikrishnan

April 9th, 2021

Norse Atlantic Airways CEO Bjørn Tore Larsen brushed off comparisons to Norwegian Air and is confident the U.S. will approve the new airline in time for its planned transatlantic launch later this year or in the first quarter of next year.

“We have nothing to do with [Norwegian Air’s] NAI,” Larsen said. “We don’t see any reason why our application should be rejected.”

But the comparisons are striking, if not wholly accurate. Norse Atlantic plans to offer low-cost flights between Europe and the U.S., on a fleet of former Norwegian Air Boeing 787s it leased from AerCap. The new airline launches just as Norwegian Air, in bankruptcy, pulled back from long-haul flights to focus on flights in the Nordics and the rest of Europe.

These similarities were enough to re-open some of the wounds left by the bruising fight to approve Norwegian Air International (NAI), Norwegian Air’s Irish subsidiary, a few years ago. Unions and competing carriers on both sides of the Atlantic claimed then that Norwegian Air based NAI in Ireland to avoid Norway’s stricter labor laws. It took years for the U.S. Transportation Department to approve NAI’s foreign air carrier permit, an unusual delay for a European airline.

And many of those same objectors are back. One of the principals, Rep. Peter DeFazio (D-Ore.), chairman of the House of Representatives Transportation and Infrastructure Committee, recently told Transportation Secretary Pete Buttigieg it was “imperative” that the agency deny Norse Atlantic’s application. Joe DePete, head of the Air Line Pilots Association, called Norse Atlantic a “Frankenstein’s Monster … putting a bunch of dead parts together.”

These objections are unfair, Larsen said. “We have observed the comments and believe they are based on a misunderstanding,” he said. “We are a Norwegian company, flagged in Norway, using Norwegian, European, and American crews.”

This difference is critical to understanding why Larsen is more confident of Norse Atlantic’s prospects with regulators. NAI sourced crews from Europe, the U.S., and, most controversially, Asia, which its detractors said violated the U.S.-EU open skies agreement’s labor protections. “We will provide a lot of good jobs in Europe and the U.S.,” Larsen said. “And if our crews want a union, we will agree.”

Before it can apply for a U.S. foreign air carrier permit, the airline must have a Norwegian air operators certificate (AOC). Larsen expects Norway to award an AOC in the next five to six months.

Norse Atlantic has other challenges besides a protracted fight in Congress and the DOT. The company is picking up the low-cost long-haul mantle just as Norwegian, the last real player in that sector, jettisoned it. The model has never made money for airlines, and not just Norwegian Air, but Icelandair have abandoned it, and Wow Air went belly up trying to make it work. “They never made money, they never had a chance to make money, but they were doing a lot of damage along the way, and they’re gone,” United CEO Scott Kirby recently said of the three European low-cost, long-haul airlines.

But Larsen noted that Norse Atlantic is fully funded by several of the largest banks in Scandinavia. The company has raised $153 million (NOK1.3 billion) from more than 350 investors, including former Norwegian Air executives Bjørn Kjos and Bjørn Tise (although Larsen points out they are just investors). It debuts on the Oslo Bourse on April 12. “We are fully funded and have the flexibility to start when [operations] when demand returns,” he said.  

Larsen is betting that demand for international travel will “blossom” as soon as countries ease travel restrictions and more people get the vaccines. “There is an underlying desire to travel,” he said. “We expect Europe and North America to be ahead of other continents in controlling the pandemic.”

The company’s first routes are expected to be between Europe and destinations in the U.S., although Larsen said the route map “is not cast in stone.” Initial targets include Miami, New York, London, and Paris. The carrier has not secured slots at London Heathrow and thinks it most likely will operate from London Gatwick. Similarly, it does not have slots at New York John F. Kennedy International Airport, but has had a “warm welcome” from airports in the New York area, Larsen said. “JFK is high on our list.”

Long-haul traffic depends on feed from domestic markets to fill widebody aircraft. Norse Atlantic is in talks with several undisclosed airlines to provide connections. The carrier sees the continent of Europe as its catchment area and will operate flights from various European cities — not just in Scandinavia — to the U.S., Larsen said.

Norse Atlantic will start taking delivery of its nine Boeing 787s this year and into next year. The aircraft will be configured with about 60 premium-economy seats and 290 economy seats. Larsen expects the fleet to grow to between 15-20 aircraft, depending on demand.

Several new airlines are popping up to take advantage of low aircraft costs caused by airlines downsizing their fleets. In the U.S., David Neeleman’s Breeze is gearing up with a fleet of Embraer E190s. Avelo Airlines, a startup led by former United and Allegiant executive Andrew Levy, will start flying later this month. In Canada, Connect plans to start service between Toronto and several cities in the U.S. All see a vacuum left by other airlines’ downsizing and by the industry consolidation that has left just a handful of very large airlines on both sides of the Atlantic.

“It is very unfortunate that these circumstances [the pandemic] led to these opportunities,” Larsen said. “We think it’s a great time to start a new airline and to contribute to economic growth.”

Note: This story has been updated to report Norse Atlantic’s debut on the Oslo Stock Exchange.

Madhu Unnikrishnan

April 9th, 2021

Norse Atlantic CEO Bjørn Tore Larsen said the carrier plans to start flights from Oslo to New York, Los Angeles, and Fort Lauderdale next spring.  Lejla Brackovic, First House

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