Norse Atlantic pushes ahead with formal sale process following IndiGo deal exit

Norse Atlantic Airways’ board has launched a formal sale process to explore a potential takeover, merger or strategic partnership after mutually agreeing to end its wet-lease arrangement with Indian carrier IndiGo.

The decision to press ahead with a formal review follows the early redelivery of six Boeing 787 Dreamliners previously operated by IndiGo, which Norse said opens up strategic opportunities that “were not available to us before”.

The long-haul low-cost airline confirmed it has engaged investment bank JP Morgan to evaluate strategic options in response to inbound interest from potential partners.

The termination of the ACMI (Aircraft, Crew, Maintenance and Insurance) agreement with IndiGo, effective November 1, was attributed to ongoing geopolitical tensions, elevated fuel costs and airspace disruptions affecting long-haul operations between Europe and India.

More: Norse Atlantic explores ‘sale, merger or partnership’ options

Norse Atlantic chief executive Eivind Roald said the airline is already in discussions with several carriers to secure new ACMI contracts for up to five of the returning aircraft, while deploying the remaining capacity across its own core scheduled network on routes such as Europe to New York and Orlando this winter.

“The return of these six aircraft opens up strategic opportunities that were not available to us before,” Roald said. “We are seeing strong demand for modern, fuel-efficient long-haul aircraft, and we also see attractive opportunities to deploy additional capacity within our own network.

“Our priority is to use this increased flexibility to improve profitability and create long-term value for our shareholders.”

On the formal sale process, Roald added: “Given the level of interest received to date as part of the strategic review, the board has decided to move forward with a formal process, which may result in a sale, merger or partnership.”

The strategic shift comes after the carrier reported a 66% year-on-year surge in first-quarter revenue to $160 million, alongside a positive Ebitdar of $5.8 million, despite suffering significant cost pressures from rising fuel prices following the escalation of conflict in the Middle East.

Norse has been accelerating its Project Falcon restructuring programme to rein in costs, alongside adjusting capacity on key direct routes such as London Gatwick to Bangkok.

Prior to ending the IndiGo deal, Norse operated a balanced business model split evenly between scheduled passenger flights and external ACMI charter operations across its 12-strong Boeing 787 fleet, including winter flying to serve P&O Cruises ships in the Caribbean.