The low-cost long-haul airline Norse Atlantic says it is the number one carrier in the world for ancillary sales and has been raking in as much as $131 per passenger on top of the base airfare.
In comparison, the world’s largest low-cost airline, Ryanair, recently reported ancillary sales that averaged out to just $24 per passenger, and Frontier Airlines reported ancillary sales of around $76 per passenger for Q3 2023.
Norse Atlantic is in a strong position to upsell to its passengers by virtue of the fact that many of its flights are so long, compared to traditional low-cost airlines that have focused on the short-haul market.
When passengers fly with Norse, they have to pay for virtually everything on top of the airfare for the seat to get them to their destination. Food and drink, baggage, and seat selection all come at an additional and lucrative cost.
Interstingly, Norse sells some of these extras in bundles designed to save customers money, although these packages are only making the airline $42 per passenger, whereas mix-and-match extras are driving the airline’s ancillary profits.
During a presentation announcing the airline’s results of Q3, the airline said it was continuing to introduce new initiatives to drive ancillary sales even higher, and it’s hoping that an improved inflight service for its Premium cabin will drive more paid upgrades.
The quarter was marked by a record load factor for the airline, which led to a profitable summer, although there remains concern over whether Norse can make low-cost transatlantic air travel sustainably profitable – something that no other airline has ever achieved.
Chief executive Bjørn Tore Larsen hopes to offset the anticipated winter losses by renting out his fleet of Boeing 787-9 Dreamliners, along with their crews, to other airlines for money-spinning charter operations known as wet leasing.
Nonetheless, the airline admits it is facing ‘headwinds’ from increasing fuel costs, and the cargo market has been weaker than Norse had anticipated.
Norse also said it was still trying to raise an additional $45 million to get the airline through the quieter winter months after an unnamed supplier required a payment plan to be accelerated.
The airline also says it is “engaged in discussions with several industrial players” with a view to “explore industrial opportunities”. Norse did not elaborate on the nature of these discussions.
