Welcome, everyone, and thank you for joining the Norse Atlantic Q1 2026 presentation. This quarter has been challenging for the entire global aviation industry. The war in the Middle East, which began on February 28th, has created significant challenges for all airlines worldwide, not least due to a sharp rise in the price of jet fuel. Against this backdrop, we will take you through the results for the quarter, the operational improvements, and how we are positioning Norse to become even more agile and deliver profitable operations when markets normalize. Despite the significant change in March as a result of the war, we at Norse are demonstrating that our transition to becoming a profitable company is on the right track. The commercial momentum from December continued into the quarter, with record unit revenues, a 99% load factor, and improved underlying profitability.
Revenue increased by 66%, driven by route high-grading , stronger pricing, and half of the fleet on ACMI from end of January, which combined with efficiency measures resulted in a positive EBITDA of NOK 5.8 million, up from negative NOK 13.7 million in the first quarter last year. The Winter Sun program with flights between Europe and Asia and South Africa performed really well, and our own network was on path to profitability before the fuel price spike. Network EBITDA improved from negative NOK 18 million in first quarter 2025 to negative NOK 10 million this quarter and would have delivered around breakeven on normalized fuel prices. On ACMI, we saw significant increase in block hours, leading to an EBITDA in the charter and ACMI segment of NOK 16 million, up from NOK 3 million last year.
The commercial momentum from December continued into 2026. During the first two months, Norse was performing in line with previous expectations for 2026. From beginning of March, jet fuel prices increased significantly together with major disruptions in international air traffic patterns. As an airline on demand, we responded quickly by adding capacity on London Gatwick to Bangkok. Longer term, we believe passengers and partners increasingly will prioritize direct routes over hub-based connections in the Middle East. At the same time, we moved quickly to protect the business and strengthen the company during this period of volatility, including adjusting capacity, accelerating cost reductions, and a balance sheet reset. Our Project Falcon cost-saving program targets annual cost reductions of up to NOK 50 million compared to 2025, with approximately NOK 18 million expected to be realized already by the end of 2026.
The program includes simplification of the operational footprint, reductions in administrative complexity, and improvements in efficiency across the organization. We are also strengthening Norse's financial flexibility and robustness with a rights issue, bridge loan, and an offer to convert a bond into shares. Combined, we are positioning Norse to navigate a prolonged period of elevated fuel prices while remaining ready to capture profitable growth opportunities when markets normalize. Norse holds highly attractive leases for a modern and fuel-efficient Dreamliner long-haul fleet with approximately nine years average remaining lease duration, and we are seeing incoming interest from potential strategic partners. The long-term market outlook for wide-body aircraft remains very strong, with demand expected to outgrow supply for the next decade, and it will take Boeing and Airbus approximately 12 years to deliver the current order book based on the pace last year.
An international bank will be mandated to initiate a strategic review. This review may include strategic partnerships, mergers, or other alternatives that could help unlock the underlying value of the company and its assets. Now, I will pass the call over to our CFO, who will go through the financial performance before we return to the summary and outlook section.
We are pleased to report significantly higher revenues year-over-year, coming in at $160 million, while EBITDA improved to positive $5.8 million this quarter. Operationally, we increased production with number of flights up 26%, while passenger numbers increased 33%. This slide illustrates the continued improvement in the underlying profitability of the business. On the network side, stronger pricing and higher production drove a significant revenue increase, while non-fuel costs improved on a unit basis. Without the sharp increase in fuel prices from the end of February, the network business would have been around breakeven during the quarter. On the charter and ACMI side, profitability improved substantially following the ramp-up of activities. It is also worth mentioning that the ACMI result includes an approximately $3 million negative impact from the temporary disruption affecting IndiGo operations in March, following the Middle East escalation.
As you know, RASK, which is total revenue per available seat kilometer, is an important unit metric for us when evaluating how our own network performs. Network RASK increased 34% year-over-year, driven by five new routes, stronger fares, improved route mix, and ancillary revenues. At the same time, CASK, cost per available seat kilometer, excluding fuel, declined by approximately 5% due to higher utilization and improved efficiency. It's the spread between RASK and CASK that ultimately drives profitability for Norse. We have completed a network overhaul with nearly 80% of capacity allocated to Winter Sun program in the first quarter, combined with a sharp reduction in exposure to competitive transatlantic market. This led to record-high revenues per passenger, including positive impact on fares with additional boost in March due to travel disruptions on Europe/Asia routes.
Cargo revenues also increased year-over-year, particularly on routes into Southeast Asia with seafood from Norway going east and e-commerce goods going west. The ACMI and charter business continued to perform very strongly during the quarter. All six aircraft for IndiGo were operational from the end of January, resulting in substantial growth in production and revenues. EBITDAR increased from approximately $4 million last year to $16 million this quarter. Revenues increased 66% year-over-year, driven by both stronger passenger revenues and growth in charter and ACMI operations. Personnel costs increased due to higher production and general wage inflation, while fuel costs increased sharply following the fuel price spike from the end of February. Despite this, EBITDAR remained positive at $5.8 million for the quarter.
Operating cash flow remained positive during the quarter, while working capital improved compared to previous periods due to the transition toward more ACMI and charter operations. At the end of the quarter, free cash stood at approximately $5 million. The balance sheet reflects the transition toward a more resilient and balanced business model. Non-current liabilities mainly consist of aircraft lease obligations, including $694 million lease liabilities, and $28 million in convertible bond, and $7 million in shareholder loan. Importantly, the planned rights issue and bond conversion initiatives will significantly strengthen the financial position of the company once completed. I will now give the word back to Eivind for summary and outlook.
Going forward, Norse will continue becoming a more agile and flexible airline, what we call an airline on demand. We will move capacity dynamically between own network, charter, and ACMI, depending on where returns are strongest. The objective is simple, to build a leaner, more flexible, and more profitable long-haul airline. Forward bookings continue to develop positively. For Q2, booked fares are more than 20% higher than last year, while capacity allocated to the network is significantly lower. For Q3, pricing is about 10% ahead year-over-year, despite a slimmer network. This supports our strategy of focusing on fewer but more profitable routes. This slide shows how we are already implementing the airline on demand strategy in practice. We have adjusted capacity during weaker periods, canceled routes with insufficient profitability, and are exploring alternative ACMI and charter opportunities for two aircraft for summer season.
The important point is that Norse today has significantly greater flexibility to adapt quickly to changing market conditions, and profitability is our top priority. To conclude, the first quarter confirmed that the strategic transformation of Norse is working. We are seeing stronger commercial performance with 66% higher revenues, improving unit economics, and underlying profitability, all based on a significantly more resilient business model. At the same time, we are adapting quickly to market conditions through capacity adjustments, accelerated cost reductions, and a more agile operating model. While the current geopolitical environment creates short-term volatility across the industry, we remain confident in the long-term opportunities ahead for Norse Atlantic. Thank you for listening to our presentation of our Q1 results.