Airlines furious over merger denial
Scandinavian Airlines (SAS), domestic carrier Braathens and their employees were reeling Monday after it became clear that Norwegian regulators will block a merger of the two carriers. The regulators also want to dump frequent flier programs within Norway.
"This is a major step backwards to the times before free competition in the air," said an openly irritated SAS boss Gunnar Reitan.
Norway's competition authority (Konkurransetilsynet) signalled Monday that it won't allow SAS to take over the ailing Braathens. It also said it wanted to do away with the bonus programs each carrier has to reward loyal customers.
That would affect all incentives given to individuals, travel agencies and companies for repeat business.
Employees at both SAS and Braathens, meanwhile, expressed bitter disappointment Monday afternoon over the regulators' move to block a merger of the two arch-rivals.
Many now fear that Braathens' owners may declare bankruptcy, a move that would ground the fleet, force the return of leased aircraft and spark mass layoffs.
The leader of one employees' union said the existence of two carriers in Norway's small domestic market has led to overcapacity, higher ticket prices and major losses at both carriers.
Regulators and consumer groups, however, have feared that an SAS takeover of Braathens would result in one dominant player in Norway, and eliminate competition.
SAS intends to appeal the authorities' decision.