History

Early history

Norwegian Air Shuttle ASA was first incorporated on January 22, 1993. The initial activities were based on the acquisition of parts of the defunct business of Busy Bee of Norway AS which had the same owners as Braathens S.A.F.E. Busy Bee was founded in 1966 and operated a variety of taxi, cargo, charter and wet-lease flights, the latter on behalf of sister company Braathens S.A.F.E. Busy Bee petitioned to be wound-up around the 1992/1993 year end after the Norwegian Defense terminated its charter contract with the company.

During the first nine years of operations, independently owned Norwegian Air Shuttle ASA focused on providing regional flights on the West Coast of Norway in close cooperation with Braathens S.A.F.E using a fleet of three Fokker F-50 aircraft. The scale of the operation was increased, and by 2002 the company used six Fokker F-50 aircraft to serve the airports of Haugesund, Kristiansund, Molde, Stavanger and Trondheim on behalf of Braathens. Additionally, the Stavanger- Newcastle route was operated as a stand-alone route.

A Norwegian Air Shuttle Fokker F-50 in front of a Braathens S.A.F.E Boeing 737-500 in Bergen in May 1999 (Photo: Jan Einar Fardal).

Between 2000 and 2002 the company also operated helicopters and ambulance aircraft through its subsidiary Lufttransport AS which was later spun off. Lufttransport AS is the largest helicopter ambulance company in Scandinavia.

Start-up of the 737 low cost operations

By the end of 2001 SAS merged with Braathens, Norwegian Air Shuttle ASA’s only customer. In early 2002 the CEO of SAS, Jørgen Lindegaard, publicly announced that “The way I see it, it is not natural that Norwegian Air Shuttle ASA continues to fly the routes in Western Norway on behalf of Braathens beyond the contract they have which will expire next autumn. Norwegian Air Shuttle ASA is not part of our future plans for airline operations in Norway”.

Facing closure, Norwegian Air Shuttle ASA quickly responded by deciding to directly serve the Norwegian domestic market, which for topographic and demographic reasons is considered one of the largest air travel markets in the Nordic region. Norway has many strong domestic routes including two of the 10 largest routes in Europe, Oslo-Bergen and Oslo-Trondheim. Combined with a strong desire for increased competition and lower prices as a result of an economic slowdown and a monopolistic domestic market, market entry was timely and attractive for the company. Overcapacity in the aircraft market at the time also created good opportunities to negotiate favorable leasing agreements, helping to ensure a competitive cost base.

Over a three month period Norwegian signed long-term lease contracts for six Boeing 737-300 aircraft and increased the number of employees from 110 to 294. Norwegian obtained an Air Operating Certificate (AOC) to fly Boeing 737s on August 30, 2002, and the first scheduled flight departed on time two days later. The Company commenced operations on the four busiest routes in Norway, namely the routes from Oslo to Stavanger, Bergen, Trondheim and Tromsø, competing head-on with SAS Braathens (now known as SAS Norge). With a desire to underline its presence and “go-ahead spirit”, the company changed its logo and aircraft livery, painting the aircraft with signal-red noses and vertical tail fins featuring Norwegian entrepreneurs and heroes.

Design drawing for one of the first Boeing 737-300 aircraft in the new Norwegian livery.

Norwegian continued to fly turbo-prop commuter flights for SAS Braathens until April 2003. Though the company was contractually bound to fly until autumn 2003, SAS Braathens prematurely terminated the contract. Still owning three Fokker F-50 aircraft, the company was licensed to operate short haul, short take-off and landing (STOL) operations in Northern Norway on the routes Tromsø-Lakselv, Tromsø-Andenes and Andenes-Bodø. The company ceased all Fokker F-50 operations at the end of 2003 in order to solely focus on Boeing 737-300 jet operations. The three remaining Fokker F-50 aircraft were sold during the first half of 2004.

During the first year of jet operations, Norwegian opened 13 additional routes, which significantly improved the utilization of the aircraft fleet with an equivalent reduction in cost per flight hour and cost per seat-kilometer. Norwegian has continued to expand its route network from all the major cities in Norway to both domestic and international destinations, thereby realizing further economies of scale. From the first full year of jet operations in 2003 through 2007, the company has increased its revenues by 341%, operated 313% more aircraft, transported 462% more passengers and operated 633% more routes.

From the very start of jet operations, low cost has been a focal point for the company. In addition to efficient utilization, economies of scale and a streamlined organization, one of the key concepts are accessible, simple and affordable distribution channels. The company regards its main distribution channel, www.norwegian.com, among its competitive advantages, and investments in information technology (IT) remain a high priority. By 2008, unit cost is down by 39 % from 2003, unadjusted for the significant increase in the price of jet-fuel. The current cost level is close to half that of its main competitor.

The company stock went public on December 18 2003, raising 250 million NOK in an oversubscribed offering. Following the listing on the Oslo stock exchange, the official name of the company was changed to Norwegian Air Shuttle ASA. The company continues to use the commercial brand “Norwegian”.

Recent history

In July 2006, Norwegian Air Shuttle ASA opened a new base at Warsaw Frederic Chopin International Airport. Simultaneously, Norwegian Air Shuttle Polska Sp.zo.o was established as an operating company providing marketing and crewing services to the parent company. The base was set up in order to capture the strong growth potential in Poland including intra-European migration of Polish workers and a growing leisure market out of Poland.

In April 2007, the company signed a letter of intent with Finnair for the acquisition of their Swedish-based subsidiary, the low cost airline commercially known as FlyNordic. The transaction was approved by competition authorities in July the same year and the transaction was completed by July 31, 2007. The company has rebranded FlyNordic to Norwegian.se and is in the process of replacing the eight MD-80s that came with the FlyNordic fleet with Boeing 737s to meet the parent company’s standards in terms of operational economics and operating reliability.

Norwegian entered into leasing agreements for 11 Boeing 737-800 in May 2007, shortly followed by the placement of the largest European aircraft order of the year for 42 state-of-the-art Boeing 737-800 HGW (high gross weight) aircraft. Five more 737-800 leases were signed recently. These 58 737-800s will replace the existing fleet of 23 leased 737-300s and 4 leased MD-80s; The first seven of the 737-800s were received in 2008 and the 58th aircraft is scheduled to be delivered from the factory during spring 2014.

Delivery of LN-NOB, the first of 58 Boeing 737-800s in Norwegian’s fleet, at the Boeing factory in Seattle in January 2008 (Photo: The Boeing Company).

In late autumn 2007, the company launched the Internet based bank BankNorwegian AS retaining 20% ownership. The airline’s loyalty program is run in cooperation with the bank.

In January 2008, the company launched the fully owned telephone company Call Norwegian AS. The company will provide internet connectivity on board the airline’s new Boeing 737-800 aircraft and at major airports served by Norwegian.

Following the collapse of a competing airline based in Copenhagen in October 2008, Norwegian announced the opening of a new base at Copenhagen Kastrup Airport. The announcement was made less than 14 hours after the bankruptcy, and the first newly opened flight departed Copenhagen that same afternoon. As per May 2009 Norwegian operates 23 routes out of the Danish base.