By Sharon Petersen
Published 001 Nov 1, 2023
Low cost transatlantic airline Norse revealed on Thursday it is considering a capital raise which consequently sent its shares plunging 18 percent.
Bloomberg reported that the Norwegian carrier said it needs to urgently raise $45 million to pay a 'key supplier'. The airline stated it is facing ‘headwinds’ from increasing fuel costs, and that the cargo market has been weaker than it anticipated. Norse was quick to add however that they had reported a profitable last quarter (Q3).
In what seems to be a jinxed route for low cost Transatlantic carriers, Norse too is at risk of joining a list of carriers that have not survived. The airlines predecessor Norwegian Air Shuttle was forced into bankruptcy during the COVID pandemic and subsequently ended all transatlantic routes. Norse picked up the airlines 787 dreamliners.
Other airlines that have failed include Icelandic-based Wow airlines and Primera Air.
It also added that it had been approached by possible suitors 'seeking to explore industrial opportunities,' suggesting that it could sell a stake in the airline.
It explained that 'adverse working capital movement led to a reduction of available liquidity'.
Chief executive Bjørn Tore Larsen hopes to offset the anticipated winter losses by wet leasing out the fleet of Dreamliners to other airlines for charter operations.
Larsen said: 'Norse Atlantic has come a long way since the initial flight in June 2022. After a short first summer season in 2022, we had our first full summer season in 2023, growing to a 10 aircraft operation while delivering a robust performance. We are proud to have delivered our first profitable quarter and we continue to be agile and adapt as a company to achieve our goal of becoming the leading low-cost long-haul airline of choice.'
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