Headlines H1 2021

  • Norse Atlantic Airways established
  • USD 171.5 million equity raised in private placements
  • Secured 15 modern Boeing 787 Dreamliners on long-term leases at favorable pricing and flexible terms
  • Successful listing on Euronext Growth Oslo Børs stock exchange

About Norse

Norse Atlantic ASA ("Norse", "Norse Atlantic Airways" or the "Company") is a new airline that will offer affordable fares on long-haul flights, primarily between Europe and the United States. The company was founded by CEO and major shareholder Bjørn Tore Larsen in February 2021. Norse has secured a fleet of 15 modern, fuel-efficient and more environmentally friendly Boeing 787 Dreamliners that will serve destinations including New York, Florida, Paris, London and Oslo, among others. The Company expects to take delivery of the aircraft from December 2021 through March 2022. The Company has taken a proactive approach to working hand-in-hand with labor unions to foster a unified culture throughout the entire organization and in support of its business model. Norse has signed agreements with the Association of Flight Attendants-CWA ("AFA") in the US and the British Airline Pilots Association ("BALPA") in the UK and is in active dialogues with other unions in the countries it plans to operate. First flights are expected to take off in late first quarter or early second quarter of 2022.

Financial performance and position

These condensed consolidated financial statements are the Company's first financials and cover the period 1 February to 30 June 2021 (the "Period").

The Company expects to start revenue generating activities in 2022 on commencement of its first flight and, hence, no revenue was recognized during the period ended 30 June 2021. Operating costs during the Period totalled USD 1.8 million, consisting largely of general and administrative costs. Finance income was USD 2.5 million, consisting of a gain on revaluation of foreign currencies held as cash at the period end. Net profit after tax was USD 0.7 million for the Period.

Norse Atlantic ASA first half 2021 report

Cash flow

The Company's net increase in cash and cash equivalents over the Period was USD 150.3 million, which was also the Company's cash balance on 30 June 2021. The net cash movement was driven by cash inflow from financing activities of USD 163.6 million, consisting of gross proceeds from equity raises of USD 171.5 million, net of USD 7.9 million transaction costs. Cash flows in investing activities was an outflow of USD 14.4 million, due to aircraft lease deposits. Net operating cashflows were an outflow of USD 1.4 million, while the effect of currency revaluation on cash was USD 2.5 million.

Aircraft lease

On 29 March 2021 the Company entered into an agreement for the lease of nine Boeing Dreamliner aircraft from AerCap Holdings NV ("AerCap"), consisting of six Boeing 787-9s and three Boeing 787-8 aircraft (the "AerCap Leases"). The lease terms are approximately 8 years for the 787-8 aircraft and approximately 12 years for the 787-9 aircraft, measured from the inception date. The leases have not commenced as Norse has not taken delivery of the aircraft. The commencement dates are expected to be when the Company takes delivery of the nine aircraft during Q1 2022. On the commencement dates the Company will recognize a right-to-use asset and lease liability.

Under the terms of the AerCap Leases the Company has paid a deposit totalling USD 8.4 million.

On 2 August 2021 the Company entered into an agreement for the lease of six Boeing Dreamliner aircraft from BOC Aviation Ltd ("BOCA"). The lease terms are approximately 16 years per aircraft, measured from the inception date. The leases have not commenced as Norse has not taken delivery of the aircraft. The commencement dates are expected to be when the Company takes delivery of the six aircraft during December 2021. On the commencement dates the Company will recognize a right-to-use asset and lease liability.

Under the terms of the BOCA Leases the Company has as of today paid a total lease deposit of USD 12 million, USD 6 million of which was paid as of 30 June 2021.

Norse Atlantic ASA first half 2021 report

Risks

The Company is exposed to the normal risks that are associated with newly established enterprises, as well as to risks related to the airline industry. The commencement of operating activities by the Company is dependent on numerous factors, including a recovery in the demand for air travel following the Covid-19 pandemic and necessary regulatory approvals for air traffic operations. The outbreak of the COVID-19 pandemic has had a dramatic impact on the airline industry and may continue to have negative impacts in the future, while the Company's commencement of operations expected in 2022 will be dependent on travel restrictions easing from current levels and customer demand. Norse has commenced seeking certain regulatory approvals, including Aircraft Operating Certificates with the Civil Aviation Authorities in Norway and the UK. For certain airports, the Company is reliant on securing airport landing rights.

Events after the balance sheet

On 2 August 2021, the Company entered into an agreement for the lease of six Boeing Dreamliner aircraft from BOCA.

On 22 September 2021, the Company entered into an agreement with the British Airline Pilots Association ("BALPA") in relation to terms of employment for UK pilots.

Outlook

The Company plans to commence operations once the COVID-19 restrictions have eased and demand for transatlantic air travel returns. Norse will take delivery of its first aircraft in December 2021 and expects to take delivery of the last of the 15 aircraft by the end of March 2021. The Company is aiming to have its first transatlantic flights in late first quarter 2022 or early second quarter 2022. Although significant travel restrictions as a result of COVID-19 remain in place, announcements in early September by the governments of the US and the UK have indicated that restrictions will soon be eased. Both the US and UK, as well as Norway and France, are expected to be key markets for Norse.

Norse will be established with an operating license in Norway and the United Kingdom, with pilots and cabin crew employed directly in those countries as well as in the US, which is expected to be the Company's largest destination market.

Norse Atlantic ASA first half 2021 report

Condensed interim financial statements

Consolidated statement of

comprehensive income

Norse Atlantic ASA first half 2021 report

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Norse Atlantic ASA published this content on 14 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 July 2022 09:13:08 UTC.