History of Braathens (1994–2004)

Braathens rejected a proposal from the main competitor Scandinavian Airlines System (SAS) for a merger; instead the helicopter division was sold and the company listed on the Oslo Stock Exchange.

After a year, Color Air was bankrupt, but Braathens had suffered large losses, and terminated many routes, including all services in Sweden.

In particular, it had discussions with the large European airlines Lufthansa, British Airways and KLM about an alliance, but these were rejected by Braathens SAFE, stating that the agreements were all about getting traffic to the partner's hub.

Braaathens SAFE was worried that the high debt the company had due to the purchase of new aircraft would make them illiquid in a price war.

Bjørn G. Braathen stated that the company had bought the new aircraft based on the belief that deregulation would occur in 1997, giving the airline time to pay more of the debt.

The cost of collecting this fee was so high that SAS and Braathens SAFE announced it was cheaper to continue to fly to the unprofitable airports.

On 19 August 1993, ten of eleven trade unions agreed to a three-year wage contract, which contained bonuses for all employees based on the company's profit.

[6] The following two years, Braathens SAFE also introduced scheduled international flights to Rome, as well as summer routes to Jersey and Nice.

[7] However, Braathens SAFE terminated their routes from Bergen to Bodø, Harstad/Narvik and Tromsø, making the passengers switch planes in Trondheim.

Several of the contracts had been secured by the airline offering discounts to the companies in exchange for not allowing their customers to collect frequent flyer points.

[12] On 18 June, Braathens SAFE announced that starting on 27 October, the company put one aircraft into service on the route from Oslo to Stockholm.

In addition, Braathens SAFE started flying from several Norwegian cities to KLM's main hub at Schiphol Airport in Amsterdam.

In addition, the partnership involved a coordination of scheduling, prices, frequent flyer programs, corporate customer agreements, maintenance and procurement.

In addition, KLM-partner AirUK would become an agent for Braathens SAFE, and the company hoped that 40% of the sales on the route would be sold in the United Kingdom.

At the same time, Braathens SAFE announced that the airline would start selling more discounted tickets on the London-flights, to compete with Ryanair's new route from Stanstad to Sandefjord Airport, Torp.

It introduced a new livery with a blue bottom, and replaced the Norwegian flag on the tail with an abstract, silver wing, that became the company's new logo.

At the same time, a two-class configuration was introduced: the 'Best' section, accounting for 70% of the planes capacity, received higher seat pitch, complimentary in-flight drinks, meals and newspapers, priority boarding and refundable tickets.

The 'Back' section was for discount ticket holders, who received a no-frills service with a smaller seat pitch, and were located at the back of the aircraft behind a curtain.

[29] After introduction, the concept increased the work load on handing employees, who needed to check the passengers' tickets to ensure they sat in the right class.

The airline cost SEK 600 million and the deal gave Braathens and Malmö Aviation a 25% domestic market share in Sweden.

[31] In January 1998, Olav Nils Sunde, owner of the cruiseferry company Color Line, announced that he would start a domestic low-cost airline.

[47] On 15 September, Color Air announced that they would start flying five round trips from Oslo to Stavanger on 1 October, following the delivery of their fourth aircraft.

This was rejected by the Norwegian Armed Forces, who based their need of transport of military personnel during wartime on requisition of civilian, Norwegian-registered aircraft.

The company announced in 2000 that they were considering purchasing a smaller type of aircraft, that would replace the 737s on some routes, and that would allow Braathens to start operating the Norwegian Air Shuttle services themselves.

The rebranding itself not only cost money to initiate, but also increased operating expenses, because cabin crew needed to move the curtain depending on the number of passengers on each class.

[70] The Norwegian Competition Authority announced that since the new company would have all domestic scheduled services between primary airports, it was unlikely that the take-over would receive permission from them.

[73] The Competition Authority stated that their denial of the take-over was that the reduction of capacity would remove the airline's incentive to provide discounted tickets, because they would not have to use them to capture travelers with lower willingness to pay from the competitor, and that they would not need low-paying customers to fill up the vacant seats.

[74] CEO Arne A. Jensen stated to the press that he felt that the cause of the problems were made in 1993, when the airline failed to make the correct choices in relation to the deregulation.

In addition, SAS demanded that Braathens reduce its fleet from 33 to 23 aircraft if the deal was to go through, threatening to terminate the purchase if the airline did not abide.

From Oslo and Trondheim to Northern Norway, all routes were taken over by Braathens, with exception of a few flights made by SAS to Tromsø and Bodø.