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Formed in 2009 and to start operations in 2010. Charter, international, long haul low cost carrier (LCC), passenger & cargo, jet airplane services.
1363 Hovik, Norway
The Kingdom of Norway was established in 1814, it covers an area of 32,878 sq km, its population is 4.5 million, its capital city is Oslo, and its official language is Norwegian.
October 2009: Norwegian start-up Feel Air (FEN) plans to establish itself as a long-haul, low-cost operation between Scandinavia, the USA and Asia from March to April next year, offering fares up to -50% lower than the competition. (FEN) is arranging dry leases for two new Airbus A330-200s, with a two-class seating configuration: 264 economy (Y) seats with 34in pitch, and 40 premium-economy (C) seats with a 38in pitch. The service, however, will be uniform, with passengers required to pay extra for meals and entertainment.
(FEN) is in the market to raise NOK 240 million/$42 million with Norway's largest investment bank DnBNOR Markets.
(FEN) Chief Executive Officer (CEO) Kai Holmberg, formerly a Senior Vice President at VIA Travel Group, says: "We're trying to effect a Ryanair (RYR)-type cost religion, combined with an AirAsia X (ASX) business model, wrapped up in Virgin (VAA)-style branding."
One airplane will be based at Stockholm Arlanda airport (ARN) and one at Oslo Gardermoen airport (OSL), and both will connect to Bangkok and New York (JFK). Frequencies will be weighted towards New York in the summer and Thailand in the winter.
To achieve lower costs, (FEN) is aiming for heavy airplane utilization of 16.7 hours per day. This will mean floating, or inconsistent, scheduling. (FEN) hopes to be cash-positive by mid-2011 and during its first nine months, expects to raise load factors from 49% LF to 75% LF, and yield-per-seat to $0.05.
(FEN) has raised $37 million of starting capital from Norwegian sources, which include state equity investment vehicles. Although forward plans assume an oil price of $70 per barrel, Holmberg asserts that the start-up has raised enough capital to sustain it for 12 months at $110 per barrel. "The challenge we're looking at is keeping our labor costs down and getting those fuel hedges in place," Holmberg adds.
(FEN) still awaits its Norwegian Air Operator's Certificate (AOC).
Providing (FEN) nears its targets, it will feed capacity into its existing routes for a period before adding more destinations in the USA and southern Asia. Any new routes will be cherry-picked from thinner markets, says Holmberg.
Its present competitors on the New York and Bangkok routes include Continental Airlines (CAL) and Thai Airways International (TII).
"The most important reason why (FEN) is going to succeed is that Spain and Scandinavia are the most under-served and unexploited markets in Europe. A part of our expansion and penetration strategy is to not go into the lion's cage," Holmberg says. For that reason, he adds, (FEN) chose not to launch from Copenhagen, but rather Oslo and Stockholm which offer healthy low-cost feeder traffic. The choice of (JFK) over cheaper Newark (EWK) was dictated by better connectivity. Holmberg remains optimistic despite the poor economic environment. "We have seen casualties," he says. "But looking forward to this year, when we see Jetstar (IMU), V Australia (VAZ) and AirAsia X (ASX) - this is beginning to show that it might be working if you get all the elements right."
November 2009: Feel Air (FEN), a new Scandinavian Low Cost Carrier (LCC), intends to focus on leisure travellers and will begin operations with Stockholm Arlanda - New York (JFK) and Oslo Gardermoen - Bangkok service in spring 2010 aboard dry-leased A330-200s. It currently is raising capital of NOK240 million ($42.1 million) with Norwegian investment bank DnBNOR Markets. (FEN) plans to have 160 employees at start-up.
The new airline will be led by former Norwegian Director General Civil Aviation, Otto Lagarhus as Chief Operations Officer (COO) and former Senior VP of VIA Travel Group, Kai Holmberg as Chief Executive Officer (CEO).
(FEN) predicted (EBITA) of NOK48 million next year based on yield of $0.05, load factor rising from 49% LF to 76% LF and fleet utilization of 16.7 hours per day.
(FEN) has received over >800 crew ((FC) & (CA)) applications, even though the vacancies have not been posted yet.