New airline 'feels' out the market
October 2, 2009
A former travel industry executive and a former pilot and aviation official hope to raise enough funds from investors to launch a new low-fare, long-haul airline with flights from Oslo and Stockholm. Other industry executives scoff at the plans for “Feel Air,” which aims to take off next spring.
The vast majority of long-distance travelers from Norway have to change planes in other European hubs, like Copenhagen or Frankfurt, before continuing on to their final destination. Only a few airlines currently offer regularly scheduled intercontinental flights from Oslo: Thai Airways with its new route to Bangkok, Air Pakistan, Continental with one flight a day to Newark and US Airways with service to Philadelphia.
Dominant carrier SAS dropped its Oslo-Newark route years ago (the one that was eventually taken over by Continental) and all of its customers starting their trips in Norway have to either go through Copenhagen or Stockholm, or switch to SAS Star Alliance flights in other hubs like London or Frankfurt.Kai Holmberg, a 33-year-old former director for Via Travel Group, and Otto Lagarhus, a 64-year-old former SAS pilot who has served as head of Norway’s civil aviation authority, think the long-distance market from Norway is thus “under-served.” They think they can make money running long-haul flights from Oslo and Stockholm on Airbus 330-200 jets that can carry 307 passengers, reports newspaper Dagens Næringsliv .
“We expect to have 350,000 passengers by 2011,” said Holmberg, a graduate of Oxford and Oslo business school BI. He said that “thorough market research” shows that 3 million passengers flying from Norwegian and Swedish airports head for New York and Bangkok every year. Feel Air wants 11 percent of those markets.
Aftenposten.no reports that Feel Air intends to offer round-trip tickets from Oslo to New York’s JFK airport priced from NOK 1,500, and from Oslo to Bangkok for as low as NOK 3,000. Feel aims to target long-weekend travel, with the flight from Oslo leaving at 4pm on Thursday and landing at 7pm local time. The return would get passengers back to Oslo at 10am on Monday.
That’s just the sort of cheap pleasure travel that environmentalists hate, because of the emissions it can cause. Feel, however, sees a demand for such flights and has asked DnB NOR Markets to help it raise NOK 240 million to get them off the ground.
Bjørn Kjos, the high-profile head of low-fare airline Norwegian, immediately deflated Feel Air’s lofty plans, predicting the airline will be “stillborn.” He says it won’t have a chance without “feeder” routes that can get passengers beyond the main hubs.
“This is pure craziness,” scoffed Kjos. To which Holmberg retorted: “He says that because he wants to do this himself.”
SAS was more diplomatic than Kjos, saying it welcomed new competition. “But they’re going to have a tough time,” said SAS investors’ contact Sture Stølen. “Over-capacity on long haul routes is great, and yields tight. It will be an enormous challenge.”