Color Air

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Color Air
IATA
ICAO
Callsign
CL[1] CLA Pennant
Founded1998
Commenced operations1 August 1998
Ceased operations1999
Parent company
Color Group
HeadquartersOslo
Key peopleOlav Nils Sunde (founder)
Ove Johan Solem (CEO)
Websitecolorair.no/indexe.html

Color Air AS was the first

travel agents
, there was a 200 kr surcharge.

The airline was established in response to the opening of Gardermoen, which would allow any airline sufficient

seat loads
of between 30 and 50 percent. After thirteen months and NOK 400 million in losses, Color Air gave up and filed for bankruptcy. The price war cost the three airlines more than NOK 3 billion, and ultimately forced the other two to merge.

Service

All flights were based at Oslo Airport, Gardermoen. For the summer routes of 1999, Color Air operated four daily round trips to

Alicante Airport. From each domestic destination, flights were made to correspond with the Color Line cruiseferries departing from Oslo to Kiel, Germany, and Hirtshals, Denmark.[2]

Color Air had only one seating class, offered no on-board beverages and had no frequent flyer program or lounges.[3] Color Air had an agreement for tickets to be sold at the Rimi supermarkets, as well as by phone and Internet.[4] If bought at a travel agency, there was a NOK 200 surcharge. This was because Color Air was not linked to the Amadeus booking system, owing to the costs associated with membership.[5]

Fleet

Boeing 737-300 at Oslo Airport, Gardermoen
in 1999

The airline had three

SAS Ground Services in Trondheim, Bergen and Ålesund, and by Servisair in Oslo.[7]

Destinations

City Country IATA ICAO Airport
Ålesund Norway AES ENAL Ålesund Airport, Vigra
Alicante Spain ALC LEAL
Alicante Airport
Bergen Norway BGO ENBR Bergen Airport, Flesland
London United Kingdom STN EGSS London Stansted Airport
Oslo Norway OSL ENGM Oslo Airport, Gardermoen
Trondheim Norway TRD ENVA
Trondheim Airport, Værnes

History

Background

With Norway joining the

Braathens SAFE
each had their own routes, but from 1994 both established themselves on several of the main-haul routes.

With increased traffic, there soon became a capacity problem at

slots for new airlines. To compensate, the Norwegian Airport Administration was building a new main airport for Eastern Norway, to be located at Gardermoen. A larger terminal and two runways would give ample room for expansion, and entry of new airlines. The new airport opened on 8 October 1998.[12]

Establishment

In January 1998, Olav Nils Sunde announced that he would establish a low-cost airline following the opening of the new airport. The company would be led by

CEO Morten Andersen, who previously had been CEO of Norway Airlines, and the lawyer Stein Øxseth. Sunde would own 92% of the company through his shipping company Larvik Scandi Line, while Andersen and Øxseth would own 4% each. The company would be a brand extension of Sunde's shipping company Color Line. The company aimed at a 15–20% market share, with 1.4 million passengers annually. It was the first low-cost airline in Norway.[13] The company launched tickets down to NOK 500 each way, and sold cheap tickets without demanding that the traveler be away during a weekend.[14] Color Air made an agreement with the British airline Air Foyle HeavyLift to operate a fleet of Boeing 737-300 aircraft.[10]

Color Air was a sister company of Color Line

Following the announcement to establish Color Air, Braathens SAFE chose to rebrand itself. They launched a new livery, and changed their name to just Braathens. Starting with the company's first Boeing 737-700 delivered on 23 March, Braathens introduced the business class, Braathens Best, that would take up 70% of the cabin, and the economy class Braathens Back, that would be at the back of the cabin.[15] From 1 April, a new NOK 65 tax was introduced on all domestic flights. Braathens and SAS decided to divide the cross-subsidize the taxes between their routes, something Color Air was not able to do. This was because the tax was only valid for routes within Southern Norway; Braathens and SAS could therefore tacitly collude to increase the prices to Northern Norway, and thereby subsidize their routes in Southern Norway. Color Air, on the other hand, would be forced to put the full tax on all its departures. While the government had no way to hinder the incumbents from doing this, Gudmund Restad, Minister of Finance from the Centre Party, encouraged the airlines to not "cheat", and follow the intentions of the law, even if he admitted that there was nothing the government could do to hinder the airlines from cross-subsidizing.[16][17]

The contract to lease two Boeing 737-300 aircraft from 1994 was made with

Norwegian Civil Aviation Authority, medical experts, and SAS, who all claimed that there were no medical reasons to not let people in their 60s operate aircraft.[19]

Start of operation

The first aircraft was delivered on 1 August 1998. While the new airport at Gardermoen would not officially open until 8 October, when also SAS and Braathens would move to the airport, Color Air started flights from Gardermoen to

Trondheim Airport, Værnes commenced on 8 August, while the Bergen Airport, Flesland-route started 15 August.[20] After a week, very few passengers were traveling with Color Air, with two at the least and twenty-four at the most per departure. Color Air was losing NOK 650,000 per week of operation.[9]

The pricing scheme was based on tickets for NOK 399, 499, 599 and 699, plus NOK 71 in taxes. At least ten tickets were available at the lowest price per departure, and the first to order were granted the cheapest tickets. Tickets had no restrictions on cancellation, and were not subject to restrictions on return dates.[3]

With the opening of Gardermoen, both Braathens and SAS increased the number of flights. Braathens established a route to

Kristiansand. The number of daily trips from Oslo for SAS increased from 59 to over 80. In total, the three companies increased their daily round trip from 138 to 200, and the daily seat capacity from 18,000 to 26,000. Ålesund had the largest increase, from seven daily round trips only with Braathens, to seventeen offered by all three companies.[21] On the route to Trondheim, the number of departures had increased from 27 to 39, with Braathens operating 19, SAS 16 and Color Air 5.[22] The increase in seats was profitable for the state; the new seat tax—which was also applicable to unsold seats—received an annual revenue increase of NOK 110 million.[23]

The first plane planned to leave Gardermoen was an SAS aircraft. However, since it was 20 minutes delayed, a Color Air aircraft was instead the first to take off, at 06:52 on 8 August 1998.

Stavanger, the company instead chose to open a route to London Stansted Airport starting 1 December. The airline stated that it did not have sufficient aircraft do make more than two round trips to Stavanger, and that this would be too little to be a credible operator on the route.[27]

Price war

In November, Color Air changed the conditions tied to purchase of tickets. Reduced price tickets were only available seven days or more before departure, and only full-price tickets could be refunded.[28] At the same time, the maximum price increased to NOK 870, though all ticket prices were changed to include all taxes, after requirements from the authorities. A new, cheapest ticket was introduced at NOK 345, including taxes.[29] After the winter settled, the front between Color Air and Braathens grew colder following Braathens' denying Color Air to use their deicing equipment at Ålesund, resulting in the plane being stuck at the airport.[30]

In November, Color Air transported 102,544 passengers.[31] From mid-December, the company had a time-limited offer of tickets for NOK 200.[32]

Trondheim Airport, Værnes

In September, the ownership of Color Air was rearranged. Sunde reallocated his ownership and created

the Government Pension Fund of Norway, both were opposed to the merger, as they felt the purchased companies were overvalued. Color Air was at the time valuated at NOK 157 million.[34] After a long process between the minority shareholders and Color Group, the valuation was adjusted to NOK 108 million.[35] In May, Olav Nils Sunde bought the entire Color Group, and delisted it from the stock exchange following the conflict with the other shareholders.[36]

By the end of 1998, it became clear that Braathens had increased capacity by 20%, but only achieved a 5.2% ridership increase after the opening of Gardermoen. Similar numbers were applicable for SAS. The business market, in particular the large corporations with divisions in several large cities, were demanding high frequencies on the routes. Color Air could get by with fewer departures because they mainly targeted the leisure segment. In particular, the routes from Oslo to Ålesund and Kristiansand had a very low seat utilization; to Ålesund there were 1.2 million seats annually, but only 345,000 passengers, giving a 29% cabin load.[31] Accumulated cabin load for Color Air was 32%, with 116,176 passengers.[37][38] In the course of the last quarter of 1998, Color Air lost NOK 91 million, or NOK 1 million each day.[35] For the whole year, Color Air had an average ticket price of NOK 453, giving a revenue of NOK 57 million. NOK 45 million was used on taxes, giving NOK 12 million to cover operating costs of NOK 209 million. The company lost NOK 197 million in 1998.[39]

In February 1999, Braathens announced that they would re-register all their planes in Sweden to avoid having to pay

Ministry of Finance changed the rules so also foreign-owned planes had to pay the tax. The change in rules cost Color Air NOK 10 million per plane per year.[40] From 1 July 1999, the seat tax was removed, but replaced by an equivalent tax for each passenger. This made it cheaper to fly an empty plane, but more expensive to fly a full one.[41] Color Air had reduced the number of seats in each plane to avoid the seat tax, but increased them again after the tax was removed.[8]

In the first quarter of 1999, Color Air transported 100,472 passengers. This gave a cabin load of 35%, of which the Trondheim route had 40% and the Ålesund route 32%. This gave the airline a deficit of NOK 92 million.[42][43] SAS lost NOK 22 million, while Braathens had lost NOK 300 million.[44] In comparison, both Braathens and SAS Norway made a NOK 320 million profit in the first quarter of 1998.[45]

Color Air with its two competitors, Braathens and Scandinavian Airlines, at Oslo Airport, Gardermoen

On 1 April, Color Air won a two-year contract with

Alicante Airport in Spain.[38] On 12 April, Ove Johan Solem took over as CEO of Color Air.[47] In May, the company increased the cabin load from 38 to 48%, with ridership increasing from 33,978 to 44,081. These numbers also included a change in the number of seats per plane.[8] The following month, 46,777 people traveled with the airline.[48] By the end of July, Color Air had lost NOK 350 million.[39] However, in July, Color Air had a cabin load exceeding 50%, the level Sunde had stated was necessary to make a profit.[49]

In September, SAS announced that if Braathens took the first step to reduce capacity between Bergen and Oslo, they would follow immediately to reduce the overcapacity in the combined 37 daily departures.

frequent flyer program alone or in cooperation with the partner.[52]

Bankruptcy

On 27 September 1999, Color Air terminated all flights and ceased operations.

bankrupt on 10 November 1999.[60]

On the day of the termination, the stock price of Braathens increased by 16%, while SAS's increased 3%.[61] Immediately following the bankruptcy, the two airlines increased their prices. Subsequently, Braathens increased their ticket price by 15%, but stated that this had nothing to do with the elimination of competition, since the price increase was not on any Oslo routes.[62] In November, Braathens started to remove routes, and announced they would increase prices by 20%. They also reintroduced the Flag of Norway on the tailplane that since the rebranding had been replaced by a silver, abstract wing.[63][64] Both Braathens and SAS lost more than NOK 1 billion in 1999, and the total cost of the price war between the three airlines exceeded NOK 3 billion.[65]

References

  1. ^ "Tomme Color Air-fly". Dagbladet (in Norwegian). 10 August 1998. p. 12.
  2. ^ Color Air (10 March 1999). "Flytider". Color Air (in Norwegian). Archived from the original on 27 April 1999. Retrieved 31 January 2009.
  3. ^ a b Lillesund, Geir (16 June 1998). "Color Air med samme billettpriser over hele landet" (in Norwegian). Norwegian News Agency.
  4. ^ Stokkan, Morten (18 July 1998). "Fire melk og to flybilletter, takk !". Dagbladet (in Norwegian). p. 6.
  5. ^ Graven, Andreas R. (29 July 1998). "Ekstragebyrer på Color Airs billigreiser". Aftenposten (in Norwegian). p. 4.
  6. ^ a b Ottesen, Gregers (5 May 1998). "Color Air vraker Braathens-service". Dagens Næringsliv (in Norwegian). p. 12.
  7. ^ a b c Ottesen, Gregers; Larsen, Trygve (29 September 1999). "Risikerer kjempekrav". Dagens Næringsliv (in Norwegian). p. 20.
  8. ^ a b c Eidsten, Kjell Petter (27 June 1998). "Color Air fjernet flyseter og økte belegget". Dagens Næringsliv (in Norwegian). p. 2.
  9. ^ a b Moberg, Knut (14 August 1998). "Tomme seter hos Color Air: Taper 650 000 i uka". Dagbladet (in Norwegian). p. 19.
  10. ^ a b Ottesen, Gregers (16 March 1998). "Britisk selskap skal være operatør for Color Air". Dagens Næringsliv (in Norwegian). p. 7.
  11. ^ Spence, Thomas (1 August 1998). "Klart for flyet med lave priser". Aftenposten (in Norwegian). p. 2.
  12. ^ Valestrand, Terje (19 January 1998). "Color Air: Ingen politisk sak". Bergens Tidende (in Norwegian). p. 6.
  13. ^ Ottesen, Gregers; Segrov, Bjørn (16 January 1998). "Starter flyselskap". Dagens Næringsliv (in Norwegian). p. 10.
  14. ^ "Color Air utfordrer til luftslag". Dagbladet (in Norwegian). 17 January 1998. p. 13.
  15. ^ Lillesund, Geir (3 March 1998). "Braathens med to klasser og nytt emblem" (in Norwegian). Norwegian News Agency.
  16. ^ Lillesund, Geir (3 March 1998). "Braathens sprer seteavgiften" (in Norwegian). Norwegian News Agency.
  17. ^ Johannesen, Bjørn Erik (3 April 1998). "Flyavgift-Synnes 1-1". Nordlys (in Norwegian). p. 11.
  18. ^ Gjeruldsen, Sven Gj. (17 June 1998). "Menn uønsket Bare kvinner i kabinen". Dagbladet (in Norwegian). p. 17.
  19. ^ Alver, Vigdis; Hansen, Frode (21 June 1998). "Pensjonist Air". Dagbladet (in Norwegian). p. 6.
  20. ^ Lillesund, Geir (5 August 1998). "Mange ledige seter Oslo-Ålesund" (in Norwegian). Norwegian News Agency. p. 10.
  21. ^ Sætre, Lars N. (12 March 1998). "Priskrig til glede for passasjerene: Kapasitetsboom på Gardermoen". Aftenposten (in Norwegian). p. 46.
  22. ^ Sætre, Lars N. (17 November 1998). "Luftkamp som kan gi blodsmak". Aftenposten (in Norwegian). p. 32.
  23. ^ Moberg, Knut (10 August 1998). "Tjener 110 mill. på flykrigen Statens inntekter tar av". Aftenposten (in Norwegian). p. 12.
  24. ^ Lillesund, Geir (8 October 1998). "Det meste gikk bra første dagen" (in Norwegian). Norwegian News Agency.
  25. ^ Stenberg, Espen Bless (10 October 2016). "Historien om da Color Air kuppet hele festen foran nesen på SAS". Luftfart.Media (in Norwegian). Archived from the original on 12 October 2016. Retrieved 10 October 2016.
  26. ^ "Nye fly til Color Air" (in Norwegian). Norwegian News Agency. 24 October 1998.
  27. ^ Lillesund, Geir (6 November 1998). "Color Air starter lavprisrute til London" (in Norwegian). Norwegian News Agency.
  28. ^ "Color Air ikke så kundevennlig". Nordlys (in Norwegian). 20 November 1998. p. 12.
  29. ^ Fonbæk, Dag (27 November 1998). "Color Air mister fargen". Verdens Gang (in Norwegian). p. 12.
  30. ^ Nygard-Sture, Trond (29 November 1998). "Tulling-toppen". Bergens Tidende (in Norwegian). p. 24.
  31. ^ a b Enghaug, Pål (22 December 1998). "Tøff konkurranse i luften i november: 45 av 100 flyseter tomme". Aftenposten (in Norwegian). p. 2.
  32. ^ Kjølberg, Morten (13 December 1998). "200 kroner billetten fra Oslo til Trondheim". Aftenposten (in Norwegian). p. 6.
  33. ^ Lange, Grete de (26 September 1998). "Color Group: Sunde samler sitt reiselivsimperium". Aftenposten (in Norwegian). p. 19.
  34. ^ Lange, Grete de (22 December 1998). "Småaksjonærene knurrer Oppvask om Sundes Colortransaksjoner". Aftenposten (in Norwegian). p. 19.
  35. ^ a b Segrov, Bjørn (26 March 1999). "Tapte 91 millioner". Dagens Næringsliv (in Norwegian). p. 27.
  36. ^ Segrov, Bjørn (15 May 1999). "Kjøper hele Color, slipper granskning". Dagens Næringsliv (in Norwegian). p. 46.
  37. ^ Ottesen, Gregers (18 February 1999). "Tre av ti i Color Air". Aftenposten (in Norwegian). p. 9.
  38. ^ a b Lillesund, Geir (25 March 1999). "Resultatvekst i 1998 for Color Group ASA" (in Norwegian). Norwegian News Agency.
  39. ^ a b Ottesen, Gregers; Segrov, Bjørn (2 August 1999). "Tapte 91 millioner". Dagens Næringsliv (in Norwegian). p. 4.
  40. ^ "Etter at Braathens ba om fritak Moms for alle norske flyselskaper". Aftenposten (in Norwegian). 5 March 1999. p. 27.
  41. ^ "Seteavgiften i fly fjernes". Aftenposten (in Norwegian). 4 May 1999. p. 5.
  42. ^ "Color-kvartalstall påvirket av svake flyresultater" (in Norwegian). Norwegian News Agency. 19 May 1999.
  43. ^ "100.000 fløy med Color Air 1. kvartal" (in Norwegian). Norwegian News Agency. 15 April 1999.
  44. ^ Fonbæk, Dag (20 May 1999). "Taper 100 mill. i måneden". Verdens Gang (in Norwegian).
  45. ^ Erikstad, Terje; Wangsmo, Rune (22 May 1999). "Flypriser må opp 50 pst". Dagens Næringsliv (in Norwegian). p. 10.
  46. ^ "Color Air vant flypost" (in Norwegian). Norwegian News Agency. 25 March 1999.
  47. ^ "Ove J. Solem ny leder for Color Air" (in Norwegian). Norwegian News Agency. 12 April 1999.
  48. ^ "Finansnotiser". Dagens Næringsliv (in Norwegian). 2 July 1999. p. 18.
  49. ^ "Høyere tall i luften". Aftenposten (in Norwegian). 10 August 1999. p. 27.
  50. ^ Valderhaug, Rune (2 September 1999). "SAS vil ha færre avganger Bergen – Oslo". Bergens Tidende (in Norwegian). p. 9.
  51. ^ Valderhaug, Rune (7 September 1999). "Braathens vil ikke kutte flyruter". Bergens Tidende (in Norwegian). p. 2.
  52. ^ a b c "Ny flyrute mellom Oslo og Stavanger". Aftenposten (in Norwegian). 16 September 1999. p. 2.
  53. ^ a b "Color Air flyr mer" (in Norwegian). Norwegian News Agency. 17 September 1999. p. 2.
  54. ^ "Color-avviklingen: – Som en bombe på de ansatte" (in Norwegian). Norwegian News Agency. 27 September 1999.
  55. ^ Lillesund, Geir (27 September 1999). "Sunde: Skulle aldri ha startet Color Air" (in Norwegian). Norwegian News Agency.
  56. ^ a b Valderhaug, Rune (30 September 1999). "Ville tapt penger i hele år 2000". Bergens Tidende (in Norwegian).
  57. ^ Segrov, Bjørn (28 September 1999). "400 millioner fattigere". Dagens Næringsliv (in Norwegian). p. 6.
  58. ^ Dahl, Flemming; Haraldsen, Christian (28 September 1999). "Color Air satt på bakken Tapte 1000 kroner på hver passasjer". Aftenposten (in Norwegian). p. 32.
  59. ^ Ottesen, Gregers; Larsen, Trygve (30 September 1999). "Konkurs kan være neste for Color Air". Dagens Næringsliv (in Norwegian). p. 11.
  60. ^ "Tidligere Color Air slått konkurs" (in Norwegian). Norwegian News Agency. 17 November 1999.
  61. ^ Steen, Knut B. (28 September 1999). "Til himmels på flyavvikling". Dagens Næringsliv (in Norwegian). p. 37.
  62. ^ Dahl, Flemming (16 October 1999). "Braathens øker billettprisene for å overleve". Aftenposten (in Norwegian). p. 23.
  63. ^ Dahl, Flemming (19 October 1999). "Braathens heiser flagg igjen". Aftenposten (in Norwegian). p. 36.
  64. ^ Dahl, Flemming (29 October 1999). "Braathens kutter, Widerøe utvider". Bergens Tidende (in Norwegian). p. 4.
  65. ^ "Flyselskapene tapte milliarder" (in Norwegian). Norwegian News Agency. 1 February 2000.

External links

Wikimedia Commons has media related to Color Air.

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