Has a nascent Scandi airline finally solved aviation’s biggest riddle?

The Vikings are coming. 

This week Norse Atlantic Airways launched routes from Gatwick to the Caribbean, to add to its existing services to the US. It will fly to Barbados and to Kingston and Montego Bay in Jamaica from late October.

The Oslo-based start-up already flies from the London airport to New York, Washington, Los Angeles, Boston, Orlando, and Fort Lauderdale. In total Norse Atlantic will serve nine destinations from Gatwick this winter, making it the second largest long-haul operator by seat capacity.

Sound familiar? That’s because it is. Another plucky Scandi carrier, Norwegian, used to ply those routes from Gatwick. It axed its long-haul operations during the pandemic. But Vikings don’t give up easy. Norse is a new pretender to the low-cost long-haul crown. 

“We want to become a leader in the international low-cost, long-haul market,” Norse Atlantic’s chief executive, Bjørn Tore Larsen, said earlier this week when he announced new routes and financing. 

What’s different this time – and can Norse succeed where Norwegian failed? 

Not the planes. They are the Boeing 787s that Norwegian used to use, with a premium economy cabin, with seats with a 43” pitch – the measure of legroom – and 12” recline in a 2-3-2 seat configuration, and economy in a 3-3-3 configuration. The only thing new about the aircraft is the paint job. Norwegian’s rich red livery has been replaced with Norse’s navy and sky blue signature colours.

Not the pricing, either. Norse’s fare strategy is identical to that favoured by Norwegian: to undercut established full service carriers, notably British Airways and Virgin Atlantic. Passengers can choose Light, Classic and Plus fares. Light is the value option, while Plus fares include the maximum baggage allowance, two meal services and increased ticket flexibility.The trade-offs are similar, too. Don’t expect champagne and hot towels. 

The question of whether Norse will succeed where Norwegian (and several others) failed and finally make a success of low-cost long-haul is ticklish. Norse has cash. In April it raised US$14million in capital. It has started trading on Euronext Expand, one of the Oslo Stock Exchange’s regulated markets, and earlier this week issued an additional 60 million shares.

It is being more careful with its cash than Norwegian. Its cost base is far lower than Norwegian’s was since it signed lease agreements for Norwegian’s unwanted 787s during the pandemic when airlines were desperate to shed jets, not lease them. Some analysts say Norse is paying half of the leasing costs of Norwegian – $500,000 a month, compared with Norwegian’s $1 million. 

Better yet, until this coming winter Norse has been operating on a “pay as you fly” payment model. If the 787s aren’t flying, Norse does not have to pay a penny, which means it can park them if demand slumps at little or no cost and bring them back into service when demand recovers. It has also sub-leased five of its 15 787s to other carriers to generate cash flow.

The market is favourable. Huge demand for travel after the pandemic, coupled with shortages of pilots and crew which have forced many airlines to trim their schedules, means fares are high. This enables Norse to undercut established carriers but still charge a good price. 

Gatwick to Barbados will operate daily from 29th October 2023 with fares starting from £449 return. Kingston will be three times a week from £579 return and Montego Bay four times a week from £559 return. Add extra charges for checked bags and food and you get tidy sums. Norse will also soon start flying from Oslo to Bangkok. 

Norse also offers some measure of low-cost connectivity, thanks to partnerships with easyJet, Vueling, Norwegian and Spirit Airlines.

But all the issues that have plagued low-cost long-haul airlines remain. 

Short-haul low-cost works because the established carriers no longer offer a much better service than what is on offer from EasyJet or Ryanair. BA scrapped free tea and coffee and meals years ago. Also, flights are short, which means airlines can run outbound and return services on the same day, saving on costs such as cabin crew accommodation.

But when it comes to up to 13 hours to the Caribbean or Asia, many travellers are tempted to go with larger, traditional airlines that do offer better service and newer aircraft – in Virgin’s and BA’s case hangar-fresh Airbus A350s. Virgin’s services are now all from Heathrow, which many travellers prefer since it is larger, has better duty-free shopping and restaurants, and is easier to get to for most. BA and Virgin also offer holidays, which Norse does not. 

Established carriers offer loyalty programmes and have far larger aircraft fleets which means they can be more responsive and flexible when schedules are disrupted by bad weather or mechanical problems. Some traditional carriers also allow passengers to pay to use their snazzy airport lounges. 

Low-cost long-haul carriers typically make money in summer but struggle to make it through the winter. Norse’s new Caribbean routes may help. Traditional carriers will push back hard, as they do every time a new challenger airline emerges. 

Lufthansa and SAS have already announced new services from Germany and Sweden to Bangkok. New entrants on the London to US market, notably JetBlue, which operates brand new Airbus A321s across the pond, further increase competition. 

As one analyst puts it: “Entrepreneurs always look at the huge market between London and the US and think that if they get the pricing right, they can grab enough market share to make money. The trouble is, long-haul is not as price sensitive as short-haul. Passengers have more considerations when they are crossing the pond.”

History shows that the only low-cost long-haul carriers that succeed are those launched by deep-pocketed full service carriers – FlyDubai by Emirates, JetStar by Qantas and Scoot by Singapore Airlines. It remains to be seen if Norse can buck that trend. 

Would you consider flying with Norse? Please tell us in the comments.