Faroese national carrier Atlantic Airways anticipates a move into the ACMI market as it attempts to offset the effect of new competition on its primary route.
The Faroe Islands is an archipelago midway between Scotland and Iceland. As a dependency of the Danish crown with extensive self-governing powers, its main route is between the islands and Copenhagen, the Danish capital. One week ago, at the start of IATA’s summer season on March 26, Scandinavian Airlines (SAS) started operating on the route.
Competition is generally healthy, Atlantic Airways’ network and charter manager Pætur Rasmussen said on the sidelines of the European Regions Airline Association (ERA) conference in Copenhagen, but he had concerns as to whether the Faroe-Copenhagen route could support two carriers.
“Until now, there have been around 250,000 seats available annually and we transport 180,000 passengers a year, which gives a load factor of around 70%. The arrival of SAS adds another 120,000 seats annually, which gives a total of 370,000. I don’t know how many new passengers SAS will bring on to the route—perhaps 20,000.” That would bring load factors down to around 50%, which would be unhealthy for both companies, he said.
Atlantic Airways had worked hard to build up the route over several years and had been making efforts to keep fares low, but the arrival of much larger SAS had already seen a further drop in prices, Rasmussen added.