Norse Atlantic Airways (N0, Oslo Gardermoen) has warned it may have to stop direct flights to Norway following a 45% air passenger tax hike being imposed in the Scandinavian country in 2023.

In an announcement on the Oslo stock exchange (Oslo Børs), the startup specialising in direct intercontinental point-to-point routes between Europe and the United States said it was "deeply concerned" by the Norwegian government's planned hike of the "high rate band of [the] air passenger tax" against the backdrop of "a highly competitive and price-sensitive market". "This planned increase means that we may be forced to reassess our investment in direct routes to/from Norway to the detriment of Norwegian businesses and passengers," it cautioned.

The low rate for air passenger tax was NOK80 krone (USD8) in 2022, while the high rate was NOK214 (USD21. In the proposal for the state budget for 2023, the low rate was increased to NOK82 (USD8.2) and the high rate to NOK220 (USD22). After a budget agreement with the Socialist Left Party (SV), the low rate was kept at NOK82 per passenger, while the high rate was increased to NOK320 (USD32) per passenger for journeys outside of Europe, according to Norwegian news reports.

The airline's first flight took off from Oslo Gardermoen to New York JFK on June 14, 2022. Founded by Chief Executive Officer and major shareholder Bjørn Tore Larsen in March 2021, Norse Atlantic Airways has a fleet of nine B787-9s and one B787-8 due for delivery, according to the ch-aviation fleets module. Apart from Oslo and New York, it also serves Los Angeles International, Fort Lauderdale International, London Gatwick, and Berlin Brandenburg International, ch-aviation schedules data shows.

In a statement to investors, Larsen said the airline would soon announce an expanded schedule between London and the US. New routes for Summer 2023 include Paris CDG to New York. He said the airline recorded average load factors in November of 50%, with load factors on routes from London and Berlin to the US remaining strong while significantly lower from Oslo.

"Our business model is built on adaptability and securing profitable opportunities such as our charter operations during the quieter winter months and the 18-month sub-leasing agreements for five aircraft to Air Europa (UX, Palma de Mallorca). These income streams provide an additional financial base during the traditionally leaner winter period," he explained.

Cargo performance continued to improve, with average cargo revenue up 23% per flight compared to October 2022, the fourth consecutive month that month-on-month cargo revenue had increased on a per-flight basis.

Larsen said Norse Atlantic Airways completed three charters in November, a first for the company, on behalf of the US and Norwegian armed forces. The company was in advanced discussions to provide additional charter services for international airlines and other operators during the 2022/23 winter.

At the end of November, Norse Atlantic Airways announced a private placement equity raise for the NOK equivalent of USD30 million, which was one and a half times oversubscribed. "The equity raise will ensure that Norse Atlantic is in a strong position to capitalise on its full planned network next summer, including start-up of operations by its wholly-owned UK subsidiary, Norse Atlantic (United Kingdom) (Z0, London Gatwick), which has secured five daily slot pairs at London Gatwick at no cost for summer 2023 and intends to commence operations during 1Q23," he added.