Norse Atlantic to lease two Boeing 787-9 Dreamliners to PIA under wet-lease deal
Norse Atlantic to lease two Boeing 787-9 Dreamliners to PIA under wet-lease deal
Norse Atlantic Airways will lease two Boeing 787-9 Dreamliners to Pakistan International Airlines (PIA), it said on Friday, in the latest move by the struggling Norwegian airline to shore up its finances.
The agreement helps Norse retain a key ACMI (aircraft, crew, maintenance and insurance) contract after India’s largest airline, IndiGo, said in July it would end its wet-lease arrangement with the Norwegian group.
Norse, faced with soaring jet fuel costs, has been reducing its exposure to low-cost transatlantic services and increasing its focus on ACMI, under which it leases aircraft and crews to other airlines for a fee.
Norse Atlantic PIA operations to begin in November
Norse Atlantic Airways is scheduled to begin flight operations for PIA in November. The airline said long-term ACMI agreements with major international carriers help shield it from fluctuations in passenger demand and fuel prices.
Norse added that it is in discussions with other airlines about potential ACMI contracts. The carrier operates a fleet of 12 Boeing 787 Dreamliner aircraft. In July, Norse Atlantic also began a formal process to explore a possible sale or merger, as it considered strategic options for the business.
The deal lands as PIA itself goes through a historic transition. The government’s privatisation process has formally concluded, with the Arif Habib Consortium taking over the airline’s management. The wet-lease arrangement gives the new management added wide-body capacity without the capital cost of buying aircraft outright.
What is a wet lease?
Under an ACMI or wet-lease agreement, one airline provides an aircraft along with crew, maintenance and insurance to another carrier, which then operates the plane on its own routes. For PIA, the two Dreamliners offer modern, fuel-efficient long-haul capacity. For Norse, the contract replaces revenue lost when IndiGo walked away from its own wet-lease deal in July.
Norse’s pivot to ACMI leasing reflects the pressure on low-cost long-haul flying. Jet fuel prices have soared, and filling seats on transatlantic routes has become harder to sustain profitably. Leasing aircraft to established carriers transfers the demand risk to the operator while giving Norse steady contracted income.
Frequently asked questions
What is the Norse Atlantic PIA deal?
Norse Atlantic Airways will lease two Boeing 787-9 Dreamliners to PIA under an ACMI (wet-lease) agreement. Norse will provide the aircraft, crew, maintenance and insurance, with operations for PIA starting in November.
What is an ACMI or wet lease?
It is an arrangement in which one airline supplies an aircraft complete with crew, maintenance and insurance to another airline for a fee. The receiving airline operates the plane on its own routes.
Why is Norse shifting to ACMI leasing?
Soaring jet fuel costs have squeezed its low-cost transatlantic business. Long-term ACMI contracts with major carriers shield it from swings in passenger demand and fuel prices. It lost a key contract when India’s IndiGo ended its wet-lease arrangement in July.
How many aircraft does Norse operate?
Norse operates a fleet of 12 Boeing 787 Dreamliner aircraft and says it is in talks with other airlines about further ACMI contracts.
