Norse Atlantic secures $20m ‘liquidity buffer’ ahead of summer peak

Norse Atlantic Airways has secured a $20 million loan as a “liquidity buffer” ahead of the summer peak flying season.

The disclosure came as the budget long-haul carrier confirmed that strategic options continue to be “developed and explored” in collaboration with advisors Seabury Securities, appointed last November.

The $20 million revolving credit facility was provided by the airline’s two largest shareholders prior to the end of the first quarter of the year “for the purpose of providing a liquidity buffer prior to moving into the more cash generative summer season”.

Total cash held at end of quarter was $33.2 million, according to the airline.

Norse Atlantic, which operates a fleet of 15 Boeing 787 Dreamliners, said seasonal strategies had been developed in the winter, with more emphasis on holiday destinations and charters. 

Norse Atlantic managed a record high of 107 charter flights during the first three months of the year. 

“We will refine this strategy further for next winter, with several longer-term contracts secured or under negotiation,” the carrier’s founder and chief executive Bjorn Tore Larsen said, reiterating a statement issued on Monday.

This came as Norse Atlantic reported a 97% year-on-year rise in revenue to $78.2 million in the first quarter as passenger numbers rose by 83% to 201,462. The load factor increased by 19 percentage points to 73%.

Tore Larsen added: “We are looking forward to the busiest summer season so far in Norse Atlantic´s short history. 

“During the summer the fleet of aircraft operated in Norse’s own network increases from 10 to 12 aircraft, representing a capacity growth of 20%.

“Norse will continue to focus on careful and profitable growth. We are happy to see that our footprint in the market has increased as the network expands to include Athens this summer, Las Vegas from the fall, and a new continent as Cape Town joins the network in the winter. 

“Our goal is to see CASK [cost of available seat kilometre] continuously decreasing year-on-year for each quarter. 

“Norse remains steadfast in its commitment to achieve the lowest CASK in the transatlantic market. 

“Norse is on a path towards year-round profitability, and a successful summer 2024 is the next important stepping-stone on that journey.”

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