Nordic airlines: What it takes to succeed in one of aviation’s toughest markets

The Nordic flight market has experienced significant growth in recent years. According to Statista, revenues in the region are projected to grow by 5% year on year and hit US$8.93 billion in 2025 and over 10 million users by 2030.  

Yet, behind those numbers lies one of aviation’s toughest operating environments, where extreme weather, high expenses, and brief peak seasons put every business model to the test. In response, Nordic airlines have adopted low-cost business strategies to maintain year-round operations. 

While this model helps carriers survive in one of the most difficult markets in the world, some examples show why some carriers fail to meet the challenges of the Nordic airline market. 

Here, AeroTime explores Nordic region airlines and their strategies for surviving in a challenging, seasonal market through low-cost, disciplined operations. We ask what drives airline survival and profitability in the Nordics? 

Why low-cost models dominate the Nordics 

The dominance of low-cost carriers (LCCs) in Europe is typically measured by passenger numbers. However, traditional network airlines still play a crucial role, offering important connections for travelers from smaller or remote cities. 

According to a study conducted by the International Air Transport Association (IATA) in June 2023, the majority of flights (about 79%) aim to connect the 13% of travelers residing in these regions to the main network of European cities. 

In an exclusive interview with AeroTime, Magnús Brimar Magnússon, Partner at Nordic Flight Department, a consultancy company for small and medium-sized airlines worldwide, and an expert on Nordic airline operations and economics, explained that this creates fertile ground for low-cost operations in the Nordics. 

“The Nordics fits LCC economics. These carriers concentrate on peak periods to capture the highest-yield demand, then step back when volumes thin,” Magnússon said. 

The low-cost model primarily targets short- and medium-haul routes, where it is easier to keep costs low, owing to the fact that a cost advantage is more challenging to achieve on a long-haul operation.  

Moreover, LCCs streamline their operations by utilizing fewer types of aircraft, which lowers maintenance expenses and simplifies fleet management.  

Most short- and medium-haul flights use narrowbody aircraft. Low-cost long-haul airlines, such as French bee or Norse Atlantic Airways, operate widebody aircraft only on specific long-distance routes. 

But despite these strategies, the Nordic market can be harsh, as recent airline failures show. 

The collapse of PLAY and Braathens International 

The difficulties of operating in the region became clear when Icelandic low-cost airline PLAY Airlines suddenly ceased operations at the end of September 2025, citing “deep-rooted challenges that have built up over time.” The decision left thousands of passengers stranded and around 400 employees without jobs. 

Just one day after PLAY Airlines shut down, another Nordic airline, Braathens International, medium-haul charter arm of Sweden’s BRA group, declared bankruptcy after it could not secure funding for its Airbus operations. This led to the immediate cancellation of charter flights for tour operators like Ving and Apollo. The decision affected around 200 workers. 

But what caused these sudden collapses? According to Magnússon, both cases were about “thin buffers meeting hard economics”. He said that in a low-margin business, even a small mismatch stretches the bottom line to breaking point.  

“Neither collapse is mysterious. Both airlines were exposed to Nordic seasonality, rising winter costs, tight financing conditions, and reliance on low yields over long sectors,” Magnússon explained. “Without ample capital and disciplined network pivots, a small stumble can become terminal.” 

Magnússon said it is crucial to remember that Nordic operating costs are structurally higher than those in Southern or Eastern Europe, while ticket prices remain relatively similar.   

However, he highlighted that these bankruptcies do not indicate a failure across the market but rather serve as a “stress test” for thin balance sheets and fragile business cases.  

“The Nordics are viable but unforgiving: on the demand side, sharp seasonality and small population centers; on the cost side, winter operations, longer sectors, and charges that fares can’t drift far enough above continental averages to fully offset,” he explained. 

Airlines that ‘make it’ 

According to Magnússon, airlines that thrive in the Nordic region are usually disciplined, diversified, and cost-conscious. In simpler terms, they quickly embrace technology and operational improvements that reduce expenses. 

“I don’t believe the market is broken, but it quickly punishes carriers that are under-capitalized, mispositioned, or inattentive to costs,” he said. 

However, even well-run airlines face another layer of complexity in the Nordics: geography. Many airlines operate from airports located in remote areas, which, according to   Magnússon, can present both advantages and challenges.  

He noted that in some instances, a remote position can benefit the airline – especially when combined with a Public Service Obligation (PSO) route and strong brand equity around winter reliability. 

“We’ve seen this in Nuuk International Airport (GOH) and at remote airfields in Iceland and northern Scandinavia, where runway or schedule growth outpaces the broader infrastructure stack,” he said. “The result is attractive fares but softening yields. Remoteness becomes a true advantage only when the whole local ecosystem scales with the capacity growth.” 

Currently, two Nordic airlines appear to be demonstrating successful strategies in the region: Finnair and Scandinavian Airlines (SAS). 

Finnair has been recognized as the top Nordic airline for the 15th year in a row by Skytrax, a global air transport rating organization, at the 2025 World Airline Awards held during the Paris Air Show in June 2025. 

SAS is also considered a strong performer in the Nordics. In January 2025, Mike Malik, CMO of Cirium, commented that the airline was able to emerge from bankruptcy with new ownership, improved financial stability, and a focus on punctuality. 

What makes Nordic airlines profitable? 

According to the expert, profitability in the Nordics depends on four factors: demand shape, cost base, network design, and execution. 

Magnússon explained how airlines implement these principles.  

“Frequency must reflect local economics and the route’s history,” he said. “Relentlessly cost-conscious carriers have the advantage.” 

However, maintaining profitability is just one part of the challenge; airlines also need to determine how and where to expand. In the Nordics, Magnússon explained, growth works when it’s “season-smart, partner-led, and cost-disciplined”. 

“Nordic airlines should let partners carry demand risk, protect on-time performance and unit costs, and expand tactically rather than trying to sustain year-round frequency everywhere,” Magnússon added. 

But growth and cost discipline alone aren’t enough to stand out. According to Magnússon, in the Nordics, differentiation is less about “theatrics” and more about “reliability, simplicity, and cultural credibility”. 

Compared to global carriers, Nordic airlines have the advantage when it comes to seamless regional connectivity through Copenhagen, Oslo, Helsinki, and Keflavik hubs, along with partnerships that extend reach without increasing cost.  

Within the region, competition mainly revolves around precision versus price, with schedule quality, operational integrity, and corporate/loyalty on one side, and sharp fares and ancillaries on the other. 

What can other markets learn from the Nordics? 

In addition to operational efficiency, loyalty programs and regional partnerships are crucial for Nordic carriers to stay competitive. 

“Points are a booming business, and buying into mega programs is expensive,” Magnússon said. “Nordic carriers won’t out-muscle mega points programs, so the smarter play is regional coalition.” 

He explained that this could resemble an “NB8-style” coalition, which focuses on practical benefits: shared status, straightforward earn-and-burn rules, and combined lounges in major hubs like Copenhagen, Oslo, Helsinki, Keflavik, and Stockholm. 

Membership tiers should be simple, Magnússon said, offering benefits that are actually useful for passengers in winter, such as priority handling, protected connections, and sensible irregular-ops support. 

Magnússon concluded that this would establish a Nordic–Baltic wallet with “one status, clear value, real usability on the routes people actually fly.” The post Nordic airlines: What it takes to succeed in one of aviation’s toughest markets appeared first on AeroTime.

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