Coast Air
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Founded | 1988 | ||||||
---|---|---|---|---|---|---|---|
Ceased operations | 2008 | ||||||
Parent company | TS Industri Invest | ||||||
Headquarters | Karmøy, Norway | ||||||
Key people | Trygve Seglem (owner) | ||||||
Website | en.coastair.no |
Coast Air AS was a
The company was founded on the remains of
History
Coast Aero Center
Coast Aero Center started operations in 1975 from Haugesund Airport. The company was a local mechanical and small-plane operator until 1984, when it started to apply for concessions to perform regional airline services in Norway. The company was owned and run by Asbjørn Utne.[1]
Following the 1984 decision by
In October 1984, Coast Aero Center, along with
In 1985, the company joined the
The company was thrown into financial distress on 7 February 1988, when Den norske Creditbank (DnC) announced that they would not issue more credit. At the time the company had nine daily routes and 35 employees. All services were immediately suspended.[16] It had a debt of NOK 23 million, of which DnC demanded NOK 13 million paid by 10 February;[17] the bank later gave the company three weeks to find the capital.[18] On 17 February, a proposal for refinancing was made, where the hangars were sold to the local municipalities, who would also make a guarantee for NOK 2 million. DnC would delete part of the debt, and additional capital would be granted from Kosmos-owned Norsk Air.[19] This was not sufficient, and on 29 April Coast Aero Center filed for bankruptcy.[20] Asbjørn Utne had to file for personal bankruptcy.[21]
Reestablishment
Following the bankruptcy, the estate was purchased by Coast Air. In 1989, the new company received a one-year concession to operate from Haugesund to Bergen and Stavanger, and from Geilo to Oslo and Stavanger. The company used
On 1 April 1994, the Norwegian airline market was
Public service obligations
The state-subsidized regional airline contracts were made subject to PSO in 1996. In a trial tender for the Fagernes route. Five domestic airlines bid, and
Coast Air's first PSO contract was awarded in September 1999, on the route from
In January 2000,
The demand for air travel dropped in 2001, and only 85,000 passengers flew with Coast Air to Florø, instead of the estimated 100,000, making the entire operation a loss for the company.
Following the 2005 announcement of the PSO contracts from 1 April 2006 to 31 March 2009, Coast Air was awarded three contracts. In addition to retaining the Fagernes route, it also received the concession for the Røros and Andenes routes. The three routes gave NOK 35 million in annual subsidies. Røros and Andenes would be served by ATR 42-aircraft, while Jetstreams would be used to Fagernes.[51] From 30 January 2007, the company also started flying from Røros to Trondheim twice a week.[52] From 1 April 2007, Coast Air canceled their flights to Andenes. Since the operations were separated from the rest of the network, it was not possible to fly profitably. Widerøe subsequently took over the route.[53] During July 2007, Coast Air introduced the smaller Jetstream aircraft on the routes to Røros.[54]
Financial problems
Following the loss of the Fagernes route, Coast Air relocated its services to the Bergen–Skien and the Haugesund–Aberdeen route in 1997.[55] After Air Stord filed for bankruptcy in February 1999, Coast Air and Teddy Air both started flights from the airport to Oslo.[56] Coast Air also expanded Kristiansand as a hub, with additional routes to Stavanger, Haugesund and Gothenburg in Sweden. In January 2000, the company announced that it was not making any money on the Kristiansand routes, and immediately terminated all four services.[57] Coast air carried 50,000 passengers in 1999.[41]
After having made small profits ten years in a row until 1998,
With the freeing up of aircraft after the 2003 PSO contract losses, Coast Air introduced and additional daily flight to Aberdeen.
On 2 June 2003, Coast Air started its first head-on competition with Scandinavian Airlines. Using the ATR planes, Coast Air started with two daily round services between Haugesund and Oslo Airport, Gardermoen.[72] By September, Coast Air increased to three daily round trips, and reduced prices to NOK 500.[73] From 9 October, Scandinavian Airlines reduced their prices by 22% on the route.[74] On 16 February, Coast Air also started competing with Braathens and Widerøe on the route between Stavanger and Bergen, marketing it as a low-fare service and ticket prices as low as NOK 199.[75] The Haugesund–Oslo route cost Coast Air NOK 11 million in 2003.[76] In March 2004, Coast Air was forced to close the Stord to Oslo route, after several reductions in frequency during the past year.[77] To create more inertia on the Bergen–Stavanger route, Coast Air also started a cooperation with DAT, where the latter flew an extra daily round trip.[78] Following the losses of the Haugesund–Oslo and Bergen–Stavanger routes, they were terminated in May 2004.[79] In December, the Norwegian Competition Authority started investigating Scandinavian Airlines for illegal price dumping on the Oslo–Haugesund route. The authority suspected that SAS had illegally cross-subsidized the route to fend off the competition,[80] and announced the company would be fined NOK 20 million.[81] The case ended in Oslo District Court, where Scandinavian Airlines was found not guilty.[82] Though initially appealed by the authority, the matter was settled out-of-court in December 2007, in which the airline agreed that they had broken the law, but that since it happened just after the act came into power, they would not have to pay the fine.[83]
Vildanden
On 23 November 2004, eighteen local investors founded the airline Vildanden to start scheduled flights from
Initial service would have 16 weekly departures to Bergen Airport, Flesland. The main targeted market segment was the offshore petroleum industry, and the departure times were designed to meet helicopter routes to offshore installations. The company estimated that one quarter of travelers would be people commuting to the North Sea.[86] Norsk Hydro, who have a lot of employees in the Grenland area, stated that they could not start using Vildanden because they had an agreement to use SAS Braathens' services from Sandefjord.[87] The first scheduled service flew on 24 January 2005, carrying eight passenger.[85]
On 19 April, a new
To be able to breach the agreement with Coast Air—who still had a wet leasing contract, but were not able to put into operation a larger aircraft—the company Skien Lufttransport AS was created, and it purchased all the revenue and passenger rights from Vildanden. At the same time, it became the legal counterpart for DAT.[91] The new aircraft was put into service on 31 October, branded with the Vildanden logo. Coast Air chose to continue operating the route between Bergen and Skien in their own name, and used the same aircraft and slot times. At Skien Airport, the Vildanden passengers were given the choice between Coast Air and Vildanden, and all nineteen chose Vildanden. On the return flight, three passengers chose each airline. Both aircraft flew to Skien, but due to heavy rain, only the aircraft from DAT was able to land. The passengers who had taken the Coast Air aircraft were instead forced to land at Sandefjord Airport.[92]
The following day, Coast Air terminated their flights, but stated that they still had an agreement with Vildanden. Skien Lufttransport on their hand stated that Vildanden was now a sleeping company, and that contract therefore was terminated. Both companies considered the incident a legal matter.[93] In December, the two companies settled out of court.[94]
Bankruptcy
Until 2004, Coast Air was owned by the holding company Kystfly AS (Norwegian for "Coast Air"), which was again owned by four people: Trygve Seglem through TS Invest, Harry Aase through Aase Invest, Asbjørn Utne and the Hystad family through Karmsund Maritime Invest.[95] From 2001 to 2003, NOK 35 million were given in private placements to the company, but in February 2004, the Hystad family chose to withdraw from the corporation. At the time the company had 78 employees.[96] By April the company was on the verge of bankruptcy,[97] but private placements by Seglem and Aase meant the company could continue operating. However, the entire ATR 42-fleet would be sold, and Coast Air was to change focus to the wet-leasing market with the Jetstream 31 aircraft.[79]
In August 2004, Seglem bought the entire company from the partners.
On 23 January 2008, the board of Coast Air filed for bankruptcy. High costs made the owner Seglem lose faith in future profits. The company had lost more than NOK 100 million since 2001. It was Norway's fourth largest airline at the time.
Widerøe announced that it would take up the routes from Haugesund to Copenhagen.
Destinations
As of January 2008, Coast Air operated to the following destinations
City | Country | Airport | IATA | ICAO |
---|---|---|---|---|
Aberdeen | United Kingdom | Aberdeen Airport | ABZ | EGPD |
Bergen | Norway | Bergen Airport, Flesland | BGO | ENBR |
Copenhagen | Denmark | Copenhagen Airport | CPH | EKCH |
Fagernes | Norway | Fagernes Airport, Leirin | VBD | ENFG |
Haugesund | Norway | Haugesund Airport, Karmøy |
HAU | ENHD |
Molde | Norway | Molde Airport, Årø |
MOL | ENML |
Oslo | Norway | Oslo Airport, Gardermoen | OSL | ENGM |
Røros | Norway | Røros Airport | RRS | ENRO |
Sandefjord | Norway | Sandefjord Airport, Torp | TRF | ENTO |
Stord | Norway | Stord Airport, Sørstokken |
SPR | ENSO |
Trondheim | Norway | Trondheim Airport, Værnes |
TRD | ENVA |
Gdańsk | Poland | Gdańsk Lech Wałęsa Airport | GDN | EPGD |
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External links
Media related to Coast Air at Wikimedia Commons