caravelle
Posts: 656
Joined: Thu Aug 10, 2000 4:33 am

Norwegian Fears SAS Braathens

Tue May 04, 2004 7:49 pm

I tried a search but it seems no one has posted anything on the competition SAS/Braathens - Norwegian. The newcomer is under threat from SK/BU slashing fares where both airlines compete.

The article below is taken from Norwegian Internet Daily Nettavisen (www.nettavisen.no).

- caravelle


Future looks bleak for Norwegian
Av Bård Ove Molberg og Carin Pettersson 03.05.04 14:26


If SAS Braathens is allowed to continue to sell really cheap tickets, it will be the end of Norwegian, claims Bjørn Kjos, head of Norwegian Air Shuttle.


(Norwegian)Kjos said he does not doubt for a second that SAS Braathens now offers airplane tickets as low as NOK 323 (USD 48) in order to break his company.

«It’s the only strategy they have to get rid of Norwegian,» Kjos proclaimed.

Thinks SAS Braathens wants to get rid of Norwegian
As TV 2 Nettavisen reported Thursday, the Norwegian Competition Authority (NCA) is investigating SAS Braathens for a possible illegal price dumping in connection with the low price campaign launched April 21.

Kjos said he is pleased that the NCA has taken this action, as he claims that if SAS Braathens is allowed to continue to sell airline tickets at such a low price, Norwegian will sooner or later be pressed out of the market.

«This is nothing, but a clear maneuver to push Norwegian of the playing field,» Kjos said. «I’m convinced that they are loosing money on every ticket they sell.»

Have no choice
Norwegian responded to the low price campaign from SAS Braathens by lowering the cheapest ticket price to NOK 198 (USD 30). The company is loosing money on the tickets, but Norwegian does not have a choice, but to offer lower prices the SAS Braathens, according to Kjos.

«No company can fly for NOK 198, but we are forced to be lower than SAS Braathens when they have 20 daily departures to for example Trondheim, while we have seven or eight. In addition, they have papers and offers food and I don’t know what else during the rush hours,» stated Kjos.

The Norwegian CEO is sure that if the NCA does not act, Norwegian will slowly, but surely go broke. He claims that SAS is trying to do the same as when Color Air and Braathens got their backs broken a couple of years ago.

«If they are allowed, they will always break any competitor,» Kjos stated. «They have before. They have enough to take of, besides they have three kingdoms backing them up.»

«They are saying it themselves too,» Kjos continued. «When they launched their low price campaign, they said that they were going to win back market shares. Since they started at a 100, and now how 86-87 percent, that probably means that they are going back to a monopoly situation.»

Kjos concluded that he does not know how long Norwegian can survive if the NCA does not act.


Trains and boats and planes....
 
backfire
Posts: 3467
Joined: Fri Oct 06, 2006 8:01 am

RE: Norwegian Fears SAS Braathens

Tue May 04, 2004 8:00 pm

Actually, the aviation press covered this last week - the Norwegian competition commission has started a preliminary investigation to see whether SAS Braathens has been price-dumping. There's new regulations in Norway, as of May 1, which give greater power to the competition watchdog to impose penalties on airlines abusing their position.
 
caravelle
Posts: 656
Joined: Thu Aug 10, 2000 4:33 am

RE: Norwegian Fears SAS Braathens

Tue May 04, 2004 8:15 pm

Backfire, yes, I know. What I find interesting, and why I post this thread, is the remarks from Mr Kjos, leading to falling share prices, and today even reports in the tabloids, claiming you won't get a refund on your tickets if Norwegian collapses.
I very much hope the company survives and grows stronger, but the uncertainty enveloping the company certainly makes me wonder....

- caravelle

Trains and boats and planes....
 
backfire
Posts: 3467
Joined: Fri Oct 06, 2006 8:01 am

RE: Norwegian Fears SAS Braathens

Tue May 04, 2004 9:07 pm

Agreed. I suspect there'll be a lot of hand-wringing if Norwegian goes under...
 
caravelle
Posts: 656
Joined: Thu Aug 10, 2000 4:33 am

RE: Norwegian Fears SAS Braathens

Wed May 05, 2004 5:15 am

Yes, and the same thing is happening all over: Majors trying to squeeze the minors to remain in control of the market.

- caravelle
Trains and boats and planes....