Norse Atlantic Airways keeps reduced capacity as high fuel costs weigh

By Gianluca Lo Nostro

Oct 7 (Reuters) - Norway's Norse Atlantic Airways continued to fly with reduced capacity in September, as high fuel prices weighed on the struggling carrier despite a rise in revenue, it said on Wednesday.

Norse launched a formal process for a potential sale or merger in July and is in talks with airlines about leasing some Boeing 787 aircraft due to be returned by IndiGo at the end of October. The long-haul budget carrier has lost about 92% of its market value this year amid concerns about rising fuel costs and the viability of its business model.

The airline's shares were largely flat in early Oslo trading.

Norse is among the airlines most exposed to the recent surge in jet fuel prices because it does not hedge its fuel needs. Fuel prices have more than doubled since the start of the Iran war, squeezing margins across the aviation industry and increasing pressure on smaller airlines.

In a monthly traffic bulletin, the Arendal-based carrier said its unit revenue rose 35% from a year ago, while load factor reached 96.9%. It transported 109,202 passengers last month, down by nearly a third compared with 2025.

"We continue to fly with reduced capacity in response to the prolonged high fuel prices, while continuously optimizing our fleet allocation going forward," CEO Eivind Roald said in a statement.

Roald said the airline was placing greater emphasis on bookings to Far East destinations.

Founded in 2021 to offer low-cost transatlantic flights between Europe and the United States, Norse has scaled back its US network this year, with tickets on its website available from November only to Orlando, Florida.

"There is no way around the fact that the current fuel environment is highly unsustainable for Norse, but we would expect a new ACMI ('wet' leasing) deal to follow shortly," Pareto Securities analyst Marcus Gavelli said.

(Reporting by Gianluca Lo Nostro in Gdansk; additional reporting by Vera Dvorakova; editing by Milla Nissi-Prussak)