In April 1988, Norwegian regional airline Norving terminated all scheduled services in Southern Norway.

The company stated that it needed 8,000 passengers annually to cover costs, with the ticket price set at about 500 Norwegian krone (NOK).

The fiercest competition would come from the Vestfold Line of the Norwegian State Railways, where a train from Skien to Oslo ran each hour.

Concession was granted by the Ministry of Transport and Communications in August 1989,[3] but the airline did not commence operations until 18 July 1990.

[9] Following the deregulation of the airline market in 1994, which allowed any European Economic Area-airline to operate any route they wished, Teddy Air tried to start services at Moss Airport, Rygge.

Since it at the time was the military-only Rygge Air Station, with no passenger facilities, the airline was not successful in receiving permission.

The contract gave a subsidy of NOK 23.7 million for three years, and was 15 percent lower than what Coast Air had been receiving.

On 21 February, Teddy Air launched a route between Stord Airport, Sørstokken, and Oslo, using Saab 340 aircraft.

[17] Other airlines saw the route as attractive, and Coast Air launched eight daily round trips between the two airports.

[16] In October, Coast Air announced that they had too few aircraft to continue flying from Stord, and would terminate operations.