NWARF - Norse Atlantic: Too Risky For A Comfortable Flight

2024-07-24 13:47:05 ET

Summary

• Norse Atlantic ASA is a low-cost long-haul airline focusing on Europe-North American routes with a fleet of 15 Boeing 787 Dreamliners.
• Despite potential for profitability in summer seasons, elevated costs and weakening unit revenues pose risks for Norse Atlantic's financial performance.
• I assign a sell rating to Norse Atlantic due to high-risk profile, reliance on the summer season for profitability, and failure to secure a strategic investment.

In a recent report, I covered Norwegian Air Shuttle ( NWARF ) with a strong buy rating but with a lower price target. Before Norwegian Air Shuttle restructured itself, it had a fleet of Boeing 787 airplanes carrying out long-haul low-cost operations. These actually heavily weighed on the company’s results due to the problems with the propulsion systems of the Dreamliner, forcing the airline to source more expensive external capacity....

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