Tough competitors
Lars Draagen takes a closer look at the Norwegian market, where there are currently two home carriers – Norwegian and SAS – of roughly the same size, competing on nearly every route.
N
orwegian and SAS dominate the Norwegian market, together carrying 83% of the country’s domestic passengers. If you
include SAS-owned Widerøe, this market share grows to 96%. There is more competition in the international market, with the home carriers only having 58% of that market, while the large network carriers KLM and Lufthansa each have a 5% share. Other key players are Ryanair, British Airways, Air France, Finnair, Widerøe, TUIfl y and Air Baltic.
Norway is a small country populated by fewer than fi ve million people, but is perfect for fl ying with its mountains and fjords, its poor road conditions and its high income per capita. In fact, it is the largest aviation market in Scandinavia. The domestic market comprised 11.3 million
www.routesonline.com
passengers in 2010, while 13.1 million people fl ew on international fl ights. As many as 50 airports have scheduled fl ights and the busiest routes between Oslo and Bergen/Trondheim have more than 1.5 million passengers each.
Looking back
The Norwegian airline market has been deregulated since 1994 but it was not until the opening of the new Oslo Airport in October 1998, with its new infrastructure and added capacity, that competition, particularly in the domestic market, took off. At that time a new low-cost carrier, Colorair, began to challenge the two incumbent carriers, Braathens and SAS. Colorair opened routes from Oslo to
Bergen, Trondheim and Ålesund. Braathens and SAS responded by each
increasing their capacity. Total capacity increased immensely, resulting in vast overcapacity and very low yields. On the main domestic routes, it got to the point where there were more than 40 daily departures and this was a situation that could simply not last.
Colorair disappeared in September 1999 and Braathens was subsequently swallowed up by SAS in December 2001. The acquisition came despite Braathens having been in operation since 1946 and having had more than 50% of the domestic market share in the preceeding decades.
Then Norwegian was formed in August 2002 in response to SAS’s new dominant position. Since then, it has grown from four aircraft to 53 aircraft in December 2010. Norway is by far its most
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