History of Maersk Air
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Maersk Air (), also known simply as Maersk (), is a Danish shipping company, active in ocean and inland freight transportation and associated services, such as supply chain management and port operation. Maersk was the largest container shipping line a ...
was a Danish
airline An airline is a company that provides air transport services for traveling passengers and freight. Airlines use aircraft to supply these services and may form partnerships or alliances with other airlines for codeshare agreements, in wh ...
that operated between 1969 and 2005. Owned by the eponymous A. P. Møller–Mærsk Group, it operated a mix of scheduled and chartered passenger and cargo services. Headquartered at Dragør, its main operating bases were
Copenhagen Airport Copenhagen Airport, Kastrup ( da, Københavns Lufthavn, Kastrup, ; ) is an international airport serving Copenhagen, Denmark, Zealand, the Øresund Region, and southern Sweden including Scania. It is the second largest airport in the Nordic ...
,
Billund Airport Billund Airport ( da, Billund Lufthavn) is an airport in Denmark. Located northeast of Billund, it serves as one of the country's busiest air cargo centres, as well as a charter airline destination. Most major European airports are connected ...
and
Esbjerg Airport Esbjerg Airport ( da, Esbjerg Lufthavn) is a small airport located 5 nautical miles (9.2 km) northeast of Esbjerg, Denmark. The airport was opened on April 4, 1971. The primary use of Esbjerg Airport is as a heliport for flying offshore out ...
. The airline had offshore helicopter operations from 1975 to 1999 and had three airline subsidiaries: Maersk Air UK, Maersk Commuter and Star Air. The airline was founded on the foundations on the purchase of Falck Air on 21 February 1969.
Fokker F27 The Fokker F27 Friendship is a turboprop airliner developed and manufactured by the Dutch aircraft manufacturer Fokker. It is the most numerous post-war aircraft manufactured in the Netherlands; the F27 was also one of the most successful Europe ...
s were bought and domestic services from
Copenhagen Copenhagen ( or .; da, København ) is the capital and most populous city of Denmark, with a proper population of around 815.000 in the last quarter of 2022; and some 1.370,000 in the urban area; and the wider Copenhagen metropolitan ar ...
to
Odense Odense ( , , ) is the third largest city in Denmark (behind Copenhagen and Aarhus) and the largest city on the island of Funen. As of 1 January 2022, the city proper had a population of 180,863 while Odense Municipality had a population of 20 ...
and Stauning. From 1971 to 1995 Maersk participated in
Danair Danair A/S was an airline in Denmark, headquartered in Kastrup, Tårnby Municipality. History It was a joint venture between Scandinavian Airlines System (51% ownership), Maersk Air (34%) and Cimber Air. The three companies marketed all domes ...
, which held a monopoly on all domestic services. Maersk Air was heavily involved in the
inclusive tour A package tour, package vacation, or package holiday comprises transport and accommodation advertised and sold together by a vendor known as a tour operator. Other services may be provided such as a rental car, activities or outings during the ho ...
s market during the 1970s, operating the
Boeing 720 The Boeing 720 is an American narrow-body airliner produced by Boeing Commercial Airplanes. Announced in July 1957 as a 707 derivative for shorter flights from shorter runways, the 720 first flew on November 23, 1959. Its type certificate was ...
and
737-200 The Boeing 737 is a narrow-body aircraft produced by Boeing at its Renton Factory in Washington. Developed to supplement the Boeing 727 on short and thin routes, the twinjet retains the 707 fuselage width and six abreast seating with two un ...
. From 1981 Maersk started international flights, first out of Billund and from the 1990s out of Copenhagen. Maersk Air gradually invested in new aircraft, including the Fokker 50,
Boeing 737 Classic The Boeing 737 Classic is a series of narrow-body airliners produced by Boeing Commercial Airplanes, the second generation of the Boeing 737 series of aircraft. Development began in 1979 and the first variant, the 737-300, first flew in Februa ...
and later the
737-700 The Boeing 737 Next Generation, commonly abbreviated as 737NG, or 737 Next Gen, is a narrow-body aircraft powered by two jet engines and produced by Boeing Commercial Airplanes. Launched in 1993 as the third generation derivative of the Boeing ...
. During the 1990s the number of international services increased, often
codesharing A codeshare agreement, also known simply as codeshare, is a business arrangement, common in the aviation industry, in which two or more airlines publish and market the same flight under their own airline designator and flight number (the "airli ...
with foreign airlines. With the Danish airlines deregulated in 1995, Maersk first sought to compete with Scandinavian Airlines. They then created a
cartel A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Mos ...
. After being exposed, the airline fell into a decline after 2001, posting large deficits from which it never recovered. The airline was bought by the
FL Group Stodir ( is, Stoðir, FL Group prior to 4 June 2008) is a majority family-owned investment company located in Reykjavík, Reykjavík, Iceland. The company was founded on July 20, 1973, under the name Flugleiðir. It was formed as a holding compa ...
and merged with Sterling Airlines in 2005.


Establishment

The A. P. Moller-Maersk Group's first invested in aviation in 1937, when it bought a stake in
Danish Air Lines Det Danske Luftfartselskab A/S or DDL, trading in English as Danish Air Lines, was Denmark's national airline from 1918 until it merged to create Scandinavian Airlines System (SAS) in 1951. DDL was established on 29 October 1918, but started its f ...
, Denmark's contemporary
flag carrier A flag carrier is a transport company, such as an airline or shipping company, that, being locally registered in a given sovereign state, enjoys preferential rights or privileges accorded by the government for international operations. Hi ...
. Work on starting their own airline started to take shape in 1967, when the executive management decided to purchase a
corporate jet A business jet, private jet, or bizjet is a jet aircraft designed for transporting small groups of people. Business jets may be adapted for other roles, such as the evacuation of casualties or express parcel deliveries, and some are used by pu ...
. They opted for a Hawker Siddeley HS 125-3B. Named ''Jette Mersk'', it was used both to fly executives and to fly critical spare parts and mechanics around the globe to service mechanical error on board ships. At the time there were few business opportunities for Danish airlines. The charter market was dominated by Spies Rejser and Tjæreborgs Rejser, each with their own airlines— Conair and Sterling, respectively.
Scandinavian Airlines System Scandinavian Airlines, more commonly known and styled as SAS, is the flag carrier of Denmark, Norway, and Sweden. ''SAS'' is an abbreviation of the company's full name, Scandinavian Airlines System or legally Scandinavian Airlines System Denmark ...
(SAS) was the flag carrier and held the sole right to conduct international scheduled services. Freight charters could only be carried out by other airlines if the entire load had a single shipper and recipient.Ellemose: 49 Bjarne Hansen, who was administratively responsible for the corporate jet, made several propositions for the Maersk Group to establish an airline. After several iterations, the plans were approved by CEO
Arnold Mærsk Mc-Kinney Møller Arnold may refer to: People * Arnold (given name), a masculine given name * Arnold (surname), a German and English surname Places Australia * Arnold, Victoria, a small town in the Australian state of Victoria Canada * Arnold, Nova Scotia Uni ...
in 1969. The airline therefore aimed at ad-hoc charter with aircraft in the 50-seat market, and perhaps securing the rights to fly regional scheduled flights to smaller domestic airports. To secure a running organization, Maersk bought Falck Air on 21 February 1969. There was internal disagreement about the airline's future strategy amongst its owner, the
Falck Group Falck Group is an Italian company located in Sesto San Giovanni. It was founded in 1906 and is one of the oldest companies in the steel industry. In the 1990s it turned to the production of energy from renewable sources. It was founded in 1906 i ...
. They therefore sold it as a discounted rate to Maersk. At the time Falck Air operated a fleet of two
de Havilland Heron The de Havilland DH.114 Heron is a small propeller-driven British airliner that first flew on 10 May 1950. It was a development of the twin-engine de Havilland Dove, with a stretched fuselage and two more engines. It was designed as a rugged ...
s and two
Hawker Siddeley HS 748 The Hawker Siddeley HS 748 is a medium-sized turboprop airliner originally designed and initially produced by the British aircraft manufacturer Avro. It was the last aircraft to be developed by Avro prior to its absorption by Hawker Siddeley ...
aircraft and a hangar at Copenhagen Airport, Kastrup. The airline had ordered three
Fokker F27 Friendship The Fokker F27 Friendship is a turboprop airliner developed and manufactured by the Dutch aircraft manufacturer Fokker. It is the most numerous post-war aircraft manufactured in the Netherlands; the F27 was also one of the most successful Eur ...
s, the first which was delivered on 9 December.Ellemose: 51 The second was delivered on 17 December, but was written off ten days later when it crashed after failing to become airborne after a touch and go at
Rønne Airport Bornholm Airport ( da, Bornholms Lufthavn) is a Danish airport located 2.7 nautical miles (5 km) southeast of Rønne, on the island of Bornholm. The airport is operated by Statens Luftfartsvæsen (''The Danish Civil Aviation Administration ...
.Ellemose: 52 As part of the establishment, Maersk entered the
travel agency A travel agency is a private retailer or public service that provides travel and tourism-related services to the general public on behalf of accommodation or travel suppliers to offer different kinds of travelling packages for each destinati ...
industry. Originally named Maersk Air Rejsebureau, it was later anglicized to Maersk Travel. It gradually built up a nationwide network of travel agency outlets, in Ålborg,
Århus Aarhus (, , ; officially spelled Århus from 1948 until 1 January 2011) is the second-largest city in Denmark and the seat of Aarhus municipality, Aarhus Municipality. It is located on the eastern shore of Jutland in the Kattegat sea and app ...
, Copenhagen,
Esbjerg Esbjerg (, ) is a seaport town and seat of Esbjerg Municipality on the west coast of the Jutland peninsula in southwest Denmark. By road, it is west of Kolding and southwest of Aarhus. With an urban population of 71,698 (1 January 2022)
, Herning,
Horsens Horsens () is a city on the east coast of Jutland region of Denmark. It is the seat of the Horsens municipality. The city's population is 61,074 (1 January 2022) and the municipality's population is 94,443 (), making it the 8th largest city in De ...
,
Odense Odense ( , , ) is the third largest city in Denmark (behind Copenhagen and Aarhus) and the largest city on the island of Funen. As of 1 January 2022, the city proper had a population of 180,863 while Odense Municipality had a population of 20 ...
and Skive.Ellemose: 111 Maersk Air also bought a share of Copenhagen Airport's
ground handling In aviation, aircraft ground handling defines the servicing of an aircraft while it is on the ground and (usually) parked at a Gate (airport), terminal gate of an airport. Overview Many airlines subcontract ground handling to airports, han ...
company, Copenhagen Air Services, in 1972, which they owned along with SAS, Conair and Sterling.Ellemose: 230


Initial operations

Maersk Air I/S was officially incorporated on 1 January 1970. The same day it took over the assets in Falk Air along with its
air operator's certificate An air operator's certificate (AOC) is the approval granted by a civil aviation authority (CAA) to an aircraft operator to allow it to use aircraft for commercial purposes. This requires the operator to have personnel, assets, and system in plac ...
, concessions and the operational responsibility for the HS-125. Maersk Air I/S was organized as a
partnership A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments ...
(), which was again owned by two subsidiaries within the Maersk Group. This allowed the company to report less detailed accounts, and hindered competitors from gaining as good a picture of the company's financial and accounting situation.Ellemose: 122 Norwegian-American Finn Rassmussen Ryssdal was hired as the airline's first director. He held the position for two years until he was replaced by another Norwegian, Johan Paus, former CEO of Scanair. Operations to
Odense Airport Hans Christian Andersen Airport ( da, Odense Lufthavn, also often referred to as ) is a small airport serving the Danish city of Odense. It is located in the village of Beldringe, some 9 km north-northwest of the city. The airport is named a ...
commenced on 26 December. Maersk received permission to operate a scheduled flight from Copenhagen to Stauning Airport from 1 November 1969. This service had previously been provided by
Cimber Air Cimber may refer to: * Lucius Tillius Cimber (fl. 44 BC), ancient Roman governor, one of the assassins of Julius Caesar * Cimber Sterling, Danish airline * Cimber (airline), Danish airline, established in 2012 * Adam Cimber (born 1990), American p ...
. The initial scheduled operations consisted of five daily trip pairs from Copenhagen to Odense Airport, and two daily pairs to Stauning Airport.Ellemose: 62 The distribution of domestic routes was a contentious political issue. SAS held a privilege to commence any route they wished, but lacked regional airliners to serve the smaller airports. Norway and Sweden had seen extensive construction of regional and smaller primary airports earlier than in Denmark. In Norway the independent operator
Braathens SAFE Braathens ASA, until 1997 Braathens South American & Far East Airtransport A/S and trading as Braathens SAFE, was a Norwegian airline which operated from 1946 until it merged with Scandinavian Airlines (SAS) in 2004 to become SAS Braathens. F ...
was allowed to operate a majority of the domestic services and in Sweden
Linjeflyg Linjeflyg was a Swedish domestic airline, formed in 1957 as a domestic subsidiary by Scandinavian Airlines System and Airtaco as well as by newspaper publishers Dagens Nyheter AB and Stockholms-Tidningen AB. History Airtaco (founded in August ...
had been established to fly the larger portion of domestic hauls. This had been met by skepticism in Denmark, where this was seen as a breach of the agreements establishing the SAS consortium. It also made some Danish politicians call for the establishment of a Danish domestic carrier. Danish authorities therefore asked the three scheduled carries, SAS, Maersk and Cimber, to negotiate to see if they could reach an agreement. Consensus was reached in November 1971, whereby the company
Danair Danair A/S was an airline in Denmark, headquartered in Kastrup, Tårnby Municipality. History It was a joint venture between Scandinavian Airlines System (51% ownership), Maersk Air (34%) and Cimber Air. The three companies marketed all domes ...
was established. SAS held a 51-percent share of the company, while Maersk received 34 percent and Cimber 15 percent. Initially it was to organize domestic flights and in the long run the owners intended it to develop into a separate operator, although the latter never took place. Danair bought services from the three airlines, who retained flights to their respective destinations. Then Danair would set prices and sell tickets on the flights and the profits were paid out in relation to the ownership shares. The airlines were paid a fixed price, irrespective of their actual operating costs. Maersk fared better than SAS, as their regional airliners were more economical than SAS'
Douglas DC-9 The McDonnell Douglas DC-9 is an American five-abreast single-aisle aircraft designed by the Douglas Aircraft Company. It was initially produced by the developer company as the Douglas DC-9 until August 1967 and then by McDonnell Douglas. After ...
jetliners.Ellemose: 63 Flights to
Vágar Airport Vágar Airport ( fo, Vága Floghavn) is the only airport in the Faroe Islands, and is located east of the village of Sørvágur, on the island of Vágar. Due to the Faroe Islands' status as a self-governing territory, the airport is not subje ...
on the
Faroe Islands The Faroe Islands ( ), or simply the Faroes ( fo, Føroyar ; da, Færøerne ), are a North Atlantic island group and an autonomous territory of the Kingdom of Denmark. They are located north-northwest of Scotland, and about halfway bet ...
commenced in 1971. The airport had been served by Faroe Airways from the airport's opening in 1964 to 1968 and then in an intermediate period by SAS. Maersk took over the service as part of the Danair agreement and initially served it using F-27s.Ellemose: 56 Thisted Airport opened in 1971 and Maersk was allocated as the operator. The Thisted and Stauning services were transferred to Cimber Air in 1976, although Maersk continued to operate some services. By 1973 there were 38,000 annual passengers at Thisted, but only 6,000 at Stauning. Maersk Air therefore decided in 1975 to terminate the Stauning services. This was met by opposition by four local members of
Parliament In modern politics, and history, a parliament is a legislative body of government. Generally, a modern parliament has three functions: representing the electorate, making laws, and overseeing the government via hearings and inquiries. Th ...
. These took up the issue politically and were able to succeed at retaining the route. This resulted in the Thisted and Stauning routes were combined, giving the route Copenhagen–Stauning–Thisted–Copenhagen.


Jetliners

Given the nature of the mother company, Maersk Air looked at the possibilities to operate in the cargo segment. The F27s were bought with cargo doors, allowing them to be converted to freighters in half an hour. The airline aimed at buying a Boeing 747, but restrictions on freight caused these plans to be abandoned. However, they did purchase Oriental Air Transport Services, a cargo handling company based at Kastrup. Maersk instead chose to target the inclusive tours charter market. The first customer was Karavane Rejser, who chartered a flight to Corsica. To gain better access to the market, Maersk bought two travel agents in December 1971, Raffels Rejser and Bangs Rejser. Thereafter the airline bought five used
Boeing 720 The Boeing 720 is an American narrow-body airliner produced by Boeing Commercial Airplanes. Announced in July 1957 as a 707 derivative for shorter flights from shorter runways, the 720 first flew on November 23, 1959. Its type certificate was ...
Bs in 1973. This was followed up with purchasing the tour operator Unisol in 1974. The three agencies were merged to form a new agency under the brand Unisol and 120,000 annual trips. Unisol—Denmark's third largest inclusive tours travel agency—was placed under the industrial department in Maersk, while the airline reported directly to the executive administration. This caused a lack of coordination between the companies and Maersk never made money from the inclusive tours operations.
Maersk Oil Maersk Oil ( da, Mærsk Olie og Gas A/S) was a Danish oil and gas company owned by the A. P. Moller-Maersk Group. with a maximum operated production of 550,000 barrels of oil equivalent per day. Production came from Denmark, the UK, Qatar, Kazak ...
secured a monopoly in 1962 on exploration and extraction of any offshore petroleum in the Danish economic zone. By the 1970s they were operating oil platforms and needed helicopter transport to these. Maersk Air was contracted to perform this deed, for which it bought two Bell 212 helicopters. The airline stationed these at
Esbjerg Airport Esbjerg Airport ( da, Esbjerg Lufthavn) is a small airport located 5 nautical miles (9.2 km) northeast of Esbjerg, Denmark. The airport was opened on April 4, 1971. The primary use of Esbjerg Airport is as a heliport for flying offshore out ...
and they commenced operations on 1 July 1975. Maersk Air took delivery of its first two Boeing 737-200 Advanced in 1976. In January 1975 a Fokker F-27 was written off in a non-fatal crash during landing. At this time Maersk Air was considering introducing jetliners on the Faroe routes, but the runway was a limiting factor By devising a plan whereby the flight would have a slow approach speed and received heavy-duty breaks, it was possible to introduce the Boeing 737-200 Advanced on the route. The first such service took place on 10 February 1977.Ellemose: 57 During the second half of the 1970s Maersk focused on wet leasing their larger 720-aircraft on the intercontinental market. Contracts included flying pilgrims from Morocco to
Mecca Mecca (; officially Makkah al-Mukarramah, commonly shortened to Makkah ()) is a city and administrative center of the Mecca Province of Saudi Arabia, and the holiest city in Islam. It is inland from Jeddah on the Red Sea, in a narrow ...
and Scandinavians to North America. After having lost 100 million Danish krone (DKK) by 1979, Unisol was sold to Tjæreborg in 1980. A participating cause was Unisol's inability to profile itself in a market dominated by two high-profile, yet diametrical, owners.Ellemose: 56 Fourteen 737-200s had been delivered by 1981. Some were leased to other carries, including
Guyana Airways Guyana Airways was the flag carrier of Guyana. It was an important link for the Guyanese community as it provided a way into and out of the country. During its operations, Guyana Airways operated services to destinations in the Caribbean, the U ...
,
Malaysia Airlines Malaysia Airlines Berhad (MAB; ms, Penerbangan Malaysia Berhad), formerly known as Malaysian Airline System (MAS; ), and branded as Malaysia Airlines, is the flag carrier airline of Malaysia and a member of the Oneworld airline alliance. (Th ...
and
Tunisair Société Tunisienne de l'Air, or Tunisair ( ar, الخطوط التونسية) is the national airline of Tunisia. Formed in 1948, it operates scheduled international services to four continents. Its main base is Tunis–Carthage International ...
. Others were used charter services, mostly to Danish inclusive tour operators. From 1983 three aircraft were entirely dedicated to this task. This was a highly competitive market, where Maersk had to compete with Conair, Sterling and Scanair, amongst others. The 737-200s proved too large for domestic services. The F27s had been sold and the airline therefore determined that it needed to procure new turboprops. A decision was made to buy the
de Havilland Dash 7 The de Havilland Canada DHC-7, popularly known as the Dash 7, is a turboprop-powered regional airliner with short take-off and landing (STOL) performance. It first flew in 1975 and remained in production until 1988 when the parent company, ...
, but in the meantime the airline leased three HS 748s from 1980 to 1981. The first Dash 7 entered revenue service on 13 May 1981.Ellemose: 80 During the late 1970s Maersk Air was failing to make a profit. The revenue of DKK 535 million in 1979 fell to DKK 454 million in 1981, hitting a record loss of DKK 29 million in 1981. The company encountered problems with
liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity, the ease with which an asset can be sold * Accounting liquidity, the ability to meet cash obligations when due * Liq ...
in 1981, when it was not able to pay its employees wages. The parent company were not willing to lend the airline any more. There was an understanding in the group's executive management that if the airline failed to get through the crisis it would be allowed for file for bankruptcy. Bjørn Hansen was hired as CEO in 1981, carrying out a restructuring of the company. The number of bases for charter aircraft was reduced, cutting personnel costs. Eleven of the airline's twenty-four aircraft were sold. A key part of this plan was not allowing the aircraft to remain idle during the daytime, thereby maximizing revenue.Ellemose: 86 The number of employees were reduced from 720 to 480. By 1985 the revenue had risen to DKK 898 million in 1985, allowing the airline to make a profit of DKK 112 million in 1985. Starting in 1981 Maersk Air started flying a Bell 212 under contract with the Cabinet of the Faroe Islands. By then the helicopter fleet had reached five Bell 212s. From 1983 the petroleum activity increased and two larger
Eurocopter AS332 Super Puma The Airbus Helicopters H215 (formerly Eurocopter AS332 Super Puma) is a four-bladed, twin-engine, medium-size utility helicopter developed and initially produced by the French aerospace company Aérospatiale. It has been subsequently manufactu ...
s. On 2 January 1984 a Bell 212 crashed in the North Sea, killing the crew of two and a passenger.Ellemose: 83 Danair was reorganized from 27 September 1982. SAS's routes to Aalborg, Aarhus and Rønne were taken into the Danair pool. Maersk on its side increased the number of departures on its services. The goal was to improve profitability. And although the scheme did rise passenger numbers, it failed to improve Maersk Air's financial performance in the domestic market. Stauning was dropped from Maersk and Danair's scheduled from 1 January 1983. The Faroe route was the airline's most lucrative, with profits 29 million in 1987. The Cabinet of the Faroe Islands wanted a share of this and in 1988 they, in cooperation with Cimber Air, established Atlantic Airways. Maersk protested and stated that as a Danair partner, Cimber could not operate a competing route. But with Cimber only purchasing 25 percent of the new airline, the clause did not come into effect. Atlantic Airways captured roughly half the market on the route. A large portion of this was new ridership, so Maersk's annual patronage on the route only fell from 100,000 to 80,000. However, the competition made it impossible for either airline to make a profit on the route. The Cimber Air case ended in arbitration and on 27 October 1994 the Maritime and Commercial Court found that Cimber Air had acted disloyally and sentenced them to pay Maersk Air a compensation of DKK 35.5 million. Maersk took delivery of its first
Boeing 737-300 The Boeing 737 Classic is a series of narrow-body airliners produced by Boeing Commercial Airplanes, the second generation of the Boeing 737 series of aircraft. Development began in 1979 and the first variant, the 737-300, first flew in Februa ...
in 1985. Half of Maersk Air's accumulative profits came from the sale of used aircraft. Inspired form the importance of crucial timing of purchase and sale of ships, Maersk Air made several advantages deals. One of the involved selling 737-200s for a higher price than they had paid for them. Maersk was an early customer of the Fokker 50, taking delivery of the first unit in 1988. As part of the purchase agreement, they would receive DKK one million per sold aircraft in the Nordic Counties. This turned out well as SAS and Braathens SAFE bought a combined twenty units.


International

Maersk decided to look for possibilities to fly international routes. The first Danish non-SAS international concession was in 1981 granted to Air Business, who operated an
Embraer Bandeirante The Embraer EMB 110 Bandeirante (English: ''pioneer'') is a Brazilian general purpose 15–21 passenger twin-turboprop light transport aircraft designed by Embraer for military and civil use. The EMB 110 was designed by the French engineer Max ...
from Esbjerg via Thistedt to Stavanger Airport, Sola in Norway from 1983. Maersk Air bought Air Business the following year, keeping it as a subsidiary. Soon the a change to the concession was granted allowing the flight to operate from Aalborg Airport instead of Thistedt, allowing for a greater catchment of passengers. The subsidiary airline took the name Maersk Commuter in 1988.Ellemose: 91 Changes in European Community rules in 1984 allowed any carrier to operate intra-European routes, granted that they connected two regional airports. Maersk laid its eyes on
Billund Airport Billund Airport ( da, Billund Lufthavn) is an airport in Denmark. Located northeast of Billund, it serves as one of the country's busiest air cargo centres, as well as a charter airline destination. Most major European airports are connected ...
, which was centrally located in Jutland and was classified as a regional airport. It was already a popular base for charter flights.
London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
was a favored destinations, but all the four primary airports (
Heathrow Heathrow Airport (), called ''London Airport'' until 1966 and now known as London Heathrow , is a major international airport in London, England. It is the largest of the six international airports in the London airport system (the others bei ...
,
Gatwick Gatwick Airport (), also known as London Gatwick , is a major international airport near Crawley, West Sussex, England, south of Central London. In 2021, Gatwick was the third-busiest airport by total passenger traffic in the UK, after H ...
,
Stansted London Stansted Airport is a tertiary international airport serving London, England, United Kingdom. It is located near Stansted Mountfitchet, Essex, England, northeast of Central London. London Stansted serves over 160 destinations acro ...
and
Luton Luton () is a town and unitary authority with borough status, in Bedfordshire, England. At the 2011 census, the Luton built-up area subdivision had a population of 211,228 and its built-up area, including the adjacent towns of Dunstable a ...
) were all categorized as primary airports. To exploit the new regulations, Maersk identified
London Southend Airport London Southend Airport is an international airport situated on the outskirts of Southend-on-Sea in Essex, England, approximately from the centre of London. The airport straddles the boundaries between the city of Southend-on-Sea and the R ...
, which was classified as a secondary airport.Ellemose: 95 Maersk inaugurated the route on 29 November 1984 with two round trips. The services were carried out using Dash 7s. Due to the distance from the city Maersk could not market it as "London" unless they provided an onward connection. This was done by bundling the tickets with a first-class ride onwards by train, staffed with Maersk cabin crew. The route carried about 12,000 passengers annually and failed to make a profit. After having started routes from both Århus and Billund, Maersk initiated negotiations with both airlines regarding future services. Århus did not offer any services or help in marketing the airline. Billund on the other hand offered free landing fees the first year. The next service out of Billund was to
Cologne Bonn Airport Cologne Bonn Airport (german: Flughafen Köln/Bonn 'Konrad Adenauer') is the international airport of Germany's fourth-largest city Cologne, and also serves Bonn, former capital of West Germany. With around 12.4 million passengers passing thr ...
in Germany, in cooperation with Lufthansa. It was flown with the Fokker 50.Ellemose: 98 During the late 1980s Maersk Air started an expansion of its travel agencies. It bought Expert Rejser in 1987 and established international agencies in London,
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delta i ...
and
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
. In the following years it bought several smaller agencies and in 1990 entered a cooperation with DSB Rejsebureau. A common agency was established in Esbjerg and negotiations regarding a fusion were initiated. But both parent companies wanted to be the "locomotive" in the new company, and the deal fell through. As the European Union was working on deregulation of the airline industry, Maersk Air considered it necessary to continue to modernize its fleet to remain compete in the event it would at a later date have to compete with SAS. It needed a smaller aircraft than the 737-300 to replace it aging 737-200s and thereby asked Boeing to deliver a shortened version. With this request coming from Maersk and other 737 customers, Boeing launched the 737-500. Maersk took delivery of its first -500 on 6 April 1990. From 1990 Maersk was free to compete on any intra-European international route. It focused on routes out of Billund, providing services to Amsterdam Airport Schiphol, Brussels Airport, London Gatwick Airport,
Stockholm Arlanda Airport Stockholm Arlanda Airport is an international airport located in the Sigtuna Municipality of Sweden, near the town of Märsta, north of Stockholm and nearly south-east of Uppsala. The airport is located within Stockholm County and the provi ...
and Stavanger. In addition it flew from Copenhagen to London. All the new services were flown using the 737-500. The shift from Southend to Gatwick allowed patronage to rise to 100,00 per year and the airline to make a profit on the London route. Airline traffic fell in 1991 after the break-out of the
Gulf War The Gulf War was a 1990–1991 armed campaign waged by a Coalition of the Gulf War, 35-country military coalition in response to the Iraqi invasion of Kuwait. Spearheaded by the United States, the coalition's efforts against Ba'athist Iraq, ...
and Maersk Air failed to reach its targets for the international services. By 1991 revenue had risen to DKK 1,293 million, but the profit had fallen year by year until the company ran into a loss of DKK 25 million that year. However, the tides turned and the airline was again making profits in 1992.Ellemose: 101


New airlines

Maersk established a cargo division, Maersk Air Cargo, in 1982. Due to regulations, it only acted as a ground handling agent for overseas airlines, the largest being Cathay Pacific. When the cargo market was deregulate din 1987, Star Air was established as a separate cargo company directly under the Maersk Group. Incorporated on 1 September 1987, it bought an existing hangar on the south sector of Copenhagen Airport. Three Fokker F-27-600s were leased and converted to combi-freighters. These could be converted from freighter to passenger configuration in half an hour. Star Air originally had a mix of operations. One part was corporate charters, one was wet leasing to other airlines, one was charter and domestic operations for Maersk Air, and finally it conducted European hauls for freight companies, including FedEx,
TNT Trinitrotoluene (), more commonly known as TNT, more specifically 2,4,6-trinitrotoluene, and by its preferred IUPAC name 2-methyl-1,3,5-trinitrobenzene, is a chemical compound with the formula C6H2(NO2)3CH3. TNT is occasionally used as a reagen ...
and
United Parcel Service United Parcel Service (UPS, stylized as ups) is an American multinational shipping & receiving and supply chain management company founded in 1907. Originally known as the American Messenger Company specializing in telegraphs, UPS has grown t ...
(UPS). A Star Air F-27 crashed during landing at Cologne Bonn Airport on 26 May 1988, killing the crew of two. Although initially profitable, Star Air recorded a loss of DKK 10 million in 1991. To cut costs the operations were transferred to a new legal entity, Star Air I/S, which was then placed under Maersk Air. At the time UPS was looking for a European partner to haul intra-European flights out of Cologne Bonn Airport, using a fleet of
Boeing 727 The Boeing 727 is an American narrow-body airliner that was developed and produced by Boeing Commercial Airplanes. After the heavy 707 quad-jet was introduced in 1958, Boeing addressed the demand for shorter flight lengths from smaller airpo ...
s. Star Air missed this contract narrowly to Sterling, an existing 727 operator. However, in 1993 Sterling fell into financial distress and was not able to meet its contractual obligations. UPS turned to Maersk, signing a deal on 22 October 1993.
UPS Airlines UPS Airlines is a major American cargo airline based in Louisville, Kentucky. The second-largest cargo airline worldwide ( in terms of freight volume flown), UPS Airlines flies to 815 destinations worldwide. A wholly owned subsidiary of UPS (Unit ...
transferred two of its 727-200s to Maersk and within ten days operations had commenced. This were based at Cologne Bonn Airport and involved flights to Milan,
Rome , established_title = Founded , established_date = 753 BC , founder = King Romulus (legendary) , image_map = Map of comune of Rome (metropolitan city of Capital Rome, region Lazio, Italy).svg , map_caption ...
,
Zaragoza Zaragoza, also known in English as Saragossa,''Encyclopædia Britannica'"Zaragoza (conventional Saragossa)" is the capital city of the Zaragoza Province and of the autonomous community of Aragon, Spain. It lies by the Ebro river and its tributari ...
and
Porto Porto or Oporto () is the second-largest city in Portugal, the capital of the Porto District, and one of the Iberian Peninsula's major urban areas. Porto city proper, which is the entire municipality of Porto, is small compared to its metropol ...
. With the deregulation approaching, Maersk looked at other markets in which it could operate. Maersk determined that the British market was lucrative. Through its joint venture with
British Airways British Airways (BA) is the flag carrier airline of the United Kingdom. It is headquartered in London, England, near its main hub at Heathrow Airport. The airline is the second largest UK-based carrier, based on fleet size and passengers ...
, the Plimsoll Line, it bought Birmingham Executive Airways. The Plimsoll Line had previously bought Plymouth-based
Brymon Airways Brymon Airways is a British former airline with its head office in the Brymon House on the property of Plymouth City Airport in Plymouth, Devon."World Airline Directory." ''Flight International''. 24–30 March 199961 "Brymon House, Plymouth Cit ...
and also owned
Plymouth City Airport Plymouth City Airport is a 'mothballed' airport located within the City of Plymouth north northeast of the city centre in Devon, England at Derriford (formerly Roborough). The airport opened on this site in 1925 and was officially opened by ...
. The rules at the time hindered Maersk from owning more than fifty percent of the company. Birmingham Executive Airways was of particular interest for Maersk as they held concessions from
Birmingham Airport Birmingham Airport , formerly ''Birmingham International Airport'', is an international airport located east-southeast of Birmingham city centre, west-northwest of Coventry slightly north of Bickenhill village, in the Metropolitan Borou ...
to Copenhagen,
Göteborg Landvetter Airport Göteborg Landvetter Airport () is an international airport serving the Gothenburg (Swedish: ''Göteborg'') region in Sweden. With just over 6.8 million passengers in 2018 it is Sweden's second-largest airport after Stockholm–Arlanda. Landvette ...
and
Milan Milan ( , , Lombard: ; it, Milano ) is a city in northern Italy, capital of Lombardy, and the second-most populous city proper in Italy after Rome. The city proper has a population of about 1.4 million, while its metropolitan city h ...
. This would allow Maersk to establish itself with additional international routes.Ellemose: 104 To expand its operations, Birmingham Executive Airways changed its name to Birmingham European Airways and replaced its older
Jetstream 31 The British Aerospace Jetstream is a small twin-turboprop airliner, with a pressurised fuselage, developed as the ''Jetstream 31'' from the earlier Handley Page Jetstream. A larger version of the Jetstream was also manufactured, the British ...
and
Grumman Gulfstream I The Grumman Gulfstream I (company designation G-159) is a twin-turboprop business aircraft. It first flew on August 14, 1958. Design and development After first rejecting an idea to develop the Grumman Widgeon as an executive transport, the comp ...
turboprops with four British Aircraft Corporation One-Eleven. By 1991 its revenue had tripled to £56.7 million, although its deficits plummeted eightfold to £11.8 million. The two companies were merged in 1992 and renamed
Brymon European Airways Brymon European Airways was an airline formed in November 1992 by the merger of Birmingham European Airways and Brymon Airways. The latter were the original operators of the Dash 7 aircraft in the UK and conducted the trials of the type at the ...
. However, the two parts of the airline has vastly different scopes, fleets and strategies and few synergies could be taken advantage of. Maersk and British Airways therefore decided to split up the company. The company was demerged in 1993, with British Airways taking over the former Brymon operations and Maersk taking over the former Birmingham operations. The latter was renamed Maersk Air UK. Maersk signed a
franchise Franchise may refer to: Business and law * Franchising, a business method that involves licensing of trademarks and methods of doing business to franchisees * Franchise, a privilege to operate a type of business such as a cable television p ...
agreement in which Maersk Air UK would fly with British Airways livery and flight codes, but at their own expense and their own aircraft and crew. International services were provided out of Birmingham to Amsterdam, Copenhagen,
Cork Cork or CORK may refer to: Materials * Cork (material), an impermeable buoyant plant product ** Cork (plug), a cylindrical or conical object used to seal a container ***Wine cork Places Ireland * Cork (city) ** Metropolitan Cork, also known as G ...
,
Dublin Dublin (; , or ) is the capital and largest city of Ireland. On a bay at the mouth of the River Liffey, it is in the province of Leinster, bordered on the south by the Dublin Mountains, a part of the Wicklow Mountains range. At the 2016 c ...
, Milan and Stuttgart with the One-Elevens. Domestic services were flown with turboprops to
Glasgow Glasgow ( ; sco, Glesca or ; gd, Glaschu ) is the most populous city in Scotland and the fourth-most populous city in the United Kingdom, as well as being the 27th largest city by population in Europe. In 2020, it had an estimated popul ...
, Newcastle-upon-Tyne and
Belfast Belfast ( , ; from ga, Béal Feirste , meaning 'mouth of the sand-bank ford') is the capital and largest city of Northern Ireland, standing on the banks of the River Lagan on the east coast. It is the 12th-largest city in the United Kingdom ...
. Patronage rose from 300,000 to 451,000 from 1992 to 1996. The 737-500s were delivered from 1996. The airline carried out a major overhaul of its fleet in 1996. The four One-Elevens were sold and replaced with newer Boeing 737-500s. Meanwhile, a Jetstream 41 was transferred from British Airways, replacing the smaller Jetstream 31s. The services to Dublin, Cork and Glasgow were terminated and instead a route was started to
Lyon Lyon,, ; Occitan language, Occitan: ''Lion'', hist. ''Lionés'' also spelled in English as Lyons, is the List of communes in France with over 20,000 inhabitants, third-largest city and Urban area (France), second-largest metropolitan area of F ...
. Maersk Air UK saw its ridership increase with 22 percent in 1997, ending at 550,000 passengers. In November the airline ordered three 50-seat Bombardier CRJ200s with an option for a further twelve of any combination of the CRJ200 and the larger 70-seat CRJ700. The first CRJs were delivered in 1998 and by August 1999 there were six such aircraft in the fleet. The One-Eleves were retired in 1998 and the Jetstream 41 was pulled from service the following year. Both Maersk Air and SAS bid for a stake in
Estonian Air Estonian Air was the flag carrier airline of Estonia between 1991 and 2015. Headquartered in Tallinn it operated scheduled services from Tallinn Airport. Prior to its closure, the airline flew from Tallinn to 11 destinations in Europe. From 19 ...
when it was privatized in 1996. Despite issuing a lower bid, Maersk won, claiming a 49-percent stake along with a 17-percent state issued to Baltic Cresco Investment Group. Combined these cost about DKK 100 million.Ellemose: 129 Estonian Air underwent a modernization through the acquisition of Western aircraft. Two of Maersk Air's Fokker 50s were leased to Estonian Air, who also took delivery of two 737-500s. A third -500 was leased from Maersk from September 1998.


Danish deregulation

Maersk Air commenced services from Billund to Frankfurt in 1993,Ellemose: 107 and a year later it started flights from Copenhagen to
Kristiansand Kristiansand is a seaside resort city and municipality in Agder county, Norway. The city is the fifth-largest and the municipality the sixth-largest in Norway, with a population of around 112,000 as of January 2020, following the incorporati ...
.Ellemose: 293 To meet the upcoming deregulation, Maersk carried out a major fleet rearrangement in 1993. The airline sold its Fokker 50s and leased them back. Meanwhile, it procured six Boeing 737-500s, which were delivered in 1996. It also ordered twelve new Boeing 737-700s, which were delivered from March 1998. By the early 1990s the cooperation between the three Danair airlines had dissipated. One issue was that SAS launched its
frequent flyer program A frequent-flyer program (American English) or frequent-flyer programme (British English) is a loyalty program offered by an airline. Many airlines have frequent-flyer programs designed to encourage airline customers enrolled in the program ...
EuroBonus in 1992. This was extended to also cover Cimber's domestic services, but Maersk chose to not participate. The Danair partnership was therefore abolished and from then each of the airlines flew each their respective routes without cooperation.Ellemose: 108 Danair was dissolved on 1 October 1995, when the domestic airline industry in Denmark was deregulated. With the demise of Daniar, Maersk Air focused on improving its international connections. Its primary strategy was to establish routes from Billund to European destinations with
codeshare A codeshare agreement, also known simply as codeshare, is a business arrangement, common in the aviation industry, in which two or more airlines publish and market the same flight under their own airline designator and flight number (the "airli ...
agreements with major European airlines. This would allow Maersk Air's customers access to continue onwards with these airlines. Such agreements were struck with
Air France Air France (; formally ''Société Air France, S.A.''), stylised as AIRFRANCE, is the flag carrier of France headquartered in Tremblay-en-France. It is a subsidiary of the Air France–KLM Group and a founding member of the SkyTeam global a ...
, British Airways,
Finnair Finnair ( fi, Finnair Oyj, sv, Finnair Abp) is the flag carrier and largest airline of Finland, with its headquarters in Vantaa on the grounds of Helsinki Airport, its hub. Finnair and its subsidiaries dominate both domestic and international ...
,
KLM KLM Royal Dutch Airlines, legally ''Koninklijke Luchtvaart Maatschappij N.V.'' (literal translation: Royal Aviation Company Plc.), is the flag carrier airline of the Netherlands. KLM is headquartered in Amstelveen, with its hub at nearby Amste ...
, Lufthansa,
Sabena The ''Societé anonyme belge d'Exploitation de la Navigation aérienne'' (French; ), better known by the acronym Sabena or SABENA, was the national airline of Belgium from 1923 to 2001, with its base at Brussels National Airport. After its ba ...
and Swissair. Gradually the services were upgraded from Fokker 50 to 737-500s. In 1995 Maersk opened flights from Billund to
Paris-Charles de Gaulle Airport Paris Charles de Gaulle Airport (french: Aéroport de Paris-Charles-de-Gaulle, ), also known as Roissy Airport or simply Paris CDG, is the principal airport serving the French capital, Paris ( and its metropolitan area), and the largest intern ...
and the following year to Amsterdam and Stockholm. Maersk Air I/S was reorganized in 1996. The partnership model was abandoned and instead the airline became a limited company () directly under the mother company. Star Air on its side became a subsidiary of Maersk Air. Maersk Travel was merged with DFDS Travel in 1997, to create Maersk DFDS Travel. This proved a difficult process and Maersk pulled out of the new company in 1999. In 1994 Maersk Air bought out the other owners of Copenhagen Air Services. Within three years it was making a DKK 46-million profit from a DKK 401-million revenue. In 1998 Maersk merged the company with the ground handling company owned by the Swedish Civil Aviation Administration, creating Novia. It operated ground handling services at the airports in Copenhagen, Stockholm-Arlanda and Gothenburg Landvetter. Maersk's success in Jutland was noticed by SAS, who in October 1996 opened its first service out of Billund, to Frankfurt. This was the first route in which the two airlines competed head to head. In response, Maersk Air commenced services the following year out of SAS' stronghold at Copenhagen Airport to Milan,
Geneva , neighboring_municipalities= Carouge, Chêne-Bougeries, Cologny, Lancy, Grand-Saconnex, Pregny-Chambésy, Vernier, Veyrier , website = https://www.geneve.ch/ Geneva ( ; french: Genève ) frp, Genèva ; german: link=no, Genf ; it, Ginevr ...
and Stockholm. The latter was part of the "golden triangle"—consisting of the three highly profitable routes between the Scandinavian capitals. This was met by reduced prices by SAS on the route, to keep its goal of an eighty-percent market share. Maersk also established a feeder service from Aalborg to Billund, to provide connecting flights to international destinations. In 1997 services from Billund to
Bergen Bergen (), historically Bjørgvin, is a city and municipality in Vestland county on the west coast of Norway. , its population is roughly 285,900. Bergen is the second-largest city in Norway. The municipality covers and is on the peninsula o ...
, Milan,
Nice Nice ( , ; Niçard dialect, Niçard: , classical norm, or , nonstandard, ; it, Nizza ; lij, Nissa; grc, Νίκαια; la, Nicaea) is the prefecture of the Alpes-Maritimes departments of France, department in France. The Nice urban unit, agg ...
and
Zürich , neighboring_municipalities = Adliswil, Dübendorf, Fällanden, Kilchberg, Maur, Oberengstringen, Opfikon, Regensdorf, Rümlang, Schlieren, Stallikon, Uitikon, Urdorf, Wallisellen, Zollikon , twintowns = Kunming, San Francisco Zürich ...
. Flemming Knudsen took the position as CEO on 12 January 1998. On 3 March the first 737-700 was delivered, with Maersk Air being the European launch customer. Ole Dietz replaced Knudsen on 1 March 1999.Ellemose: 158 With its eight daily round trips, Maersk Air only captured ten percent of the market on the Copenhagen–Stockholm route, losing money on it. Maersk therefore started negotiations with British Airways and KLM to see if they could become part of an
airline alliance An airline alliance is an aviation industry arrangement between two or more airlines agreeing to cooperate on a substantial level. Alliances may provide marketing branding to facilitate travelers making inter-airline codeshare connections within c ...
. They were in close negotiations with what would become
Oneworld Oneworld (stylised as oneworld; CRS: *O) is an airline alliance founded on 1 February 1999. The alliance's stated objective is to be the first choice airline alliance for the world's frequent international travellers. Its central alliance offic ...
, but pulled out in the last minute. There were two main concerns: the first was that Maersk would have to become a franchise partner of British Airways, and that they had already started negotiating with SAS.Ellemose: 150 With the 14 June 1998 opening of the
Great Belt Fixed Link The Great Belt Bridge ( da, Storebæltsbroen) or Great Belt fixed link ( da, Storebæltsforbindelsen) is a multi-element fixed link crossing the Great Belt strait between the Danish islands of Zealand and Funen. It consists of a road suspension ...
, car, coach and rail transport became faster between
Jutland Jutland ( da, Jylland ; german: Jütland ; ang, Ēota land ), known anciently as the Cimbric or Cimbrian Peninsula ( la, Cimbricus Chersonesus; da, den Kimbriske Halvø, links=no or ; german: Kimbrische Halbinsel, links=no), is a peninsula of ...
and
Funen Funen ( da, Fyn, ), with an area of , is the third-largest island of Denmark, after Zealand and Vendsyssel-Thy. It is the 165th-largest island in the world. It is located in the central part of the country and has a population of 469,947 as of ...
on the one hand, and
Zealand Zealand ( da, Sjælland ) at 7,031 km2 is the largest and most populous island in Denmark proper (thus excluding Greenland and Disko Island, which are larger in size). Zealand had a population of 2,319,705 on 1 January 2020. It is the 1 ...
on the other. Without the need to take the Great Belt ferries, travel time was cut by an hour. For instance the travel time by train from Aarhus to Copenhagen fell from four to three hours, making domestic flights considerably less competitive. This had its effect on patronage, with significant drop in domestic traffic.Ellemose: 109 The same year the government introduced a tax of DKK 150 on all domestic flights, which further contributed to the fall in domestic ridership. The shortest route, from Odense to Copenhagen, was the most severely affected. Maersk Air anticipated a significant drop and reduced services from a 737-500 to a Fokker 50. Passenger numbers dropped to a third and the service was terminated on 13 June 1998.


Cartel case

For Maersk the lack of a frequent-flyer program was becoming a major hindrance on routes where it competed with SAS. With EuroBonus, SAS was able to get business travelers to buy more expensive tickets or wait longer at airports so they could earn personal miles, at the expense of their employer, who was paying the ticket. Maersk introduced a bonus program which gave free trips to the business, rather than the traveler, but this was not successful at attracting travelers. After the Oneworld negotiations failed, Maersk Air turned to SAS in an attempt to initiate a cooperation. Negotiations commenced in early 1997,Ellemose: 171 and the deal was announced on 8 October 1998, taking effect 28 March 1999. Maersk would adopt EuroBonus and codeshare all domestic flights, all international flights out of Copenhagen and the routes from Billund to London and Nice. Maersk also commenced services from Copenhagen to
Athens Athens ( ; el, Αθήνα, Athína ; grc, Ἀθῆναι, Athênai (pl.) ) is both the capital and largest city of Greece. With a population close to four million, it is also the seventh largest city in the European Union. Athens dominates ...
and
Venice Venice ( ; it, Venezia ; vec, Venesia or ) is a city in northeastern Italy and the capital of the Veneto region. It is built on a group of 118 small islands that are separated by canals and linked by over 400 bridges. The isla ...
.Ellemose: 152 In addition to the publicly stated clauses, the agreement also contained a series of illegal collusions. Maersk and SAS split up the market between them, so they no longer would fly on competing routes. This involved that Maersk Air would withdraw from its Copenhagen services to Stockholm and Geneva. Maersk Air also agreed to—gradually so to not awake suspicion—withdraw from its various codeshare agreements with other airlines than SAS.Ellemose: 173 One reason for SAS' move was that Norway's
Braathens Braathens ASA, until 1997 Braathens South American & Far East Airtransport A/S and trading as Braathens SAFE, was a Norwegian airline which operated from 1946 until it merged with Scandinavian Airlines (SAS) in 2004 to become SAS Braathens. ...
had recently bought
Transwede Transwede Airways AB, was a Swedish charter and later also scheduled airline operating between 1985 and 1998. Based at Stockholm Arlanda Airport, Transwede initially flew Sud Aviation Caravelles and from 1987 also McDonnell Douglas MD-80s. Most ...
and that negotiations had commenced with the aim of a merger or close cooperation with Maersk. Such a cooperation could seriously threaten SAS in the domestic and intra-Scandinavian market, and by holding Maersk close at bay SAS hoped to avoid such an alliance. Maersk Air announced in November 1998 that it would close the two routes it was losing money on, the Copenhagen services to Vojens and Stockholm. On the former the route had lost sixty percent of its patronage with the opening of the Great Belt Fixed Link. Meanwhile, SAS pulled out of the Billund–Frankfurt route. Niels Sundberg, CEO of Sun-Air, wrote an official complaint to the
EU Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
, arguing that the deal struck between SAS and Maersk had a closer cooperation than the competition regulations allowed.Ellemose: 167 The case was followed up by the EU Commission and the Danish authorities. Eventually the
European Commissioner for Competition The Commissioner for Competition is the member of the European Commission responsible for competition. The current commissioner is Margrethe Vestager ( ALDE). Responsibilities The portfolio has responsibility for such matters as commercial c ...
, Mario Monti, approved a
dawn raid A police raid is an unexpected visit by police or other law enforcement officers, law-enforcement officers with the aim of using the element of surprise in order to seize evidence or arrest suspects believed to be likely to hide evidence, res ...
on SAS and Maersk, which took place on 15 June 2000. Maersk Air chose to cooperate with the Commission and surrendered a series of private papers not found in the raid, in a hope that this would lower a potential fine. These summarized the negotiations and documented how the airlines had discussed abolishing all competing services. The commission issued a statement of objections in January 2001. It concluded among other things that SAS would make an additional €20-million profit per year if Maersk pulled out of the Copenhagen–Stockholm route. Maersk Air was sentenced to a fine of €17.5 million, while SAS was fined €43.75 million. Maersk Air was granted a twenty-five-percent discount for cooperation, while SAS received a ten-percent discount. As a consequence, Dietz resigned as CEO and Hansen, who had been appointed chairman, also withdrew. Flemming Ipsen was hired as a new CEO, while Troels Dilling was hired as chairman. Ipsen came from A. P. Møller–Mærsk's corporate judicial division, and had no experience from the aviation industry.


Decline

Maersk was struck by a series of labor disputes in 1998 and 1999. The company experienced high turnover amongst cabin crew, due to lower wages and longer working hours that at SAS. The airline was therefore forced to hire English-speaking crews. However, these were limited to one per flight. The airline had a revenue of DKK 3.5 billion and made a profit of DKK 124 million in 2000. That year the airline opened a route from Billund to
Dublin Dublin (; , or ) is the capital and largest city of Ireland. On a bay at the mouth of the River Liffey, it is in the province of Leinster, bordered on the south by the Dublin Mountains, a part of the Wicklow Mountains range. At the 2016 c ...
. With the deregulation of the handling market from 1999, competitors with lower costs took over a substantial portion of the market. Novia failed to retain its profits and lost DKK 80 million from 1999 to 2001. The CAA sold its stake in 2001 to
Aviapartner Aviapartner, whose origins date back to 1949 under the name of Herfurth Air Services to become 'Belgavia' in the late 1960s, is a Belgian company that provides ground handling services at 37 airports in Belgium, France, Germany, Italy, Spain an ...
, with Maersk weaving its
right of first refusal Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transactio ...
. The cooperation between the two owners was poor. Maersk Air tried to either sell their stake to Aviapartner or by the other half, but in the end the two companies were not even able to speak together. Novia continued to lose money and had to receive DKK 65 million in new share capital in 2001. Maersk Air eventually let the company be file for bankruptcy. The cargo handling was sold to SAS in 2003, while the remaining assets were sold for DKK 1.Ellemose: 232 At the turn of the century Maersk Air fell into financial distress. The airline was struck hard by the 2001 airline recession, making a loss that year of DKK 341 million.Ellemose: 233 Ridership increased in 2002, largely through the increased sale of discounted tickets. The services to Istanbul, Dublin, Zürich and Milan were closed in 2002, as were the Copenhagen-bound flights from Rønne and Billund. However,
Munich Munich ( ; german: München ; bar, Minga ) is the capital and most populous city of the German state of Bavaria. With a population of 1,558,395 inhabitants as of 31 July 2020, it is the third-largest city in Germany, after Berlin and Ha ...
and
Barcelona Barcelona ( , , ) is a city on the coast of northeastern Spain. It is the capital and largest city of the autonomous community of Catalonia, as well as the second most populous municipality of Spain. With a population of 1.6 million within ci ...
were added to the schedules.Ellemose: 234 Maersk Air therefore turned to divest its non-core activities. The hangar that was used by Cargo Center Copenhagen was sold for DKK 80 million. Estonian Air had grown to a fleet of four 737-500 and was making a profit with eleven international destinations. However, Maersk saw little strategic value in the airline and the 49-percent stake was therefore sold to SAS in late 2003 for DKK 146 million. With the increased losses, the Maersk Group invested a further DKK 300 million in a share capital expansion in June 2003. Meanwhile, the airline carried out cuts, laying off 40 pilots and 120 cabin crew. This was not sufficient, and in November a further DKK 400 was placed in the company by the owners. To avoid the situation from deteriorating, Maersk Air was tightly integrated into the owner corporation and had to make detailed monthly reports. In late 2003 Maersk Aircraft A/S was established to own the fleet, spurring speculation in the media that Maersk was planning of liquidating the company. The year gave a net loss of DKK 841 million. By 2001 the number of employees in Maersk Air UK had risen to 490 and the first CRJ700 had been delivered. Meanwhile, British Airways was building up operations at Birmingham Airport through two other franchise agreements, with Brymond Airways and British Regional Airlines. The franchise agreement with Maersk, set to expire on 24 March 2001, was extended that month through the summer season. This spurred speculation that Maersk would abandon the franchising agreement. However, in August a five-year extension was signed. Maersk Air UK lost an accumulative DKK 325 million from 2000 through 2002.Ellemose: 233 By early 2003 the Maersk Group had given up on operating an airline in the UK and put Maersk Air UK up for sale. However, there were no interested buyers and it was speculated that British Airways would have to step in and take over the franchise. The company was therefore sold in a management buyout in 2003, with the airline becoming
Duo Airways Duo Airways was an airline based in the United Kingdom. Its main bases were Birmingham Airport and Edinburgh Airport. It ceased operations in May 2004. History The airline was formed by a management buyout of the former Maersk UK in June 200 ...
. At the time the airline had eight aircraft and 350 employees. Up till this point Maersk Air had lost DKK 250 million on its UK operations. The new company folded in 2004, and Maersk Air was forced to bring home five CRJs from Birmingham. Maersk lost a further DKK 65 million with the sale of these aircraft.Ellemose: 246


Fly as you like

In the years following the cartel case, almost the entire executive management of the airline was replaced. A large portion of the new management was without experience from the aviation industry. On 1 November 2003 Ipsen was replaced as CEO by Finn Øelund, who came from the same position in
Air Greenland Air Greenland A/S (formerly named Grønlandsfly), also known as Greenlandair, is the flag carrier airline of Greenland, owned by the Greenlandic Government. It operates a fleet of 32 aircraft, including 1 airliner used for transatlantic and ch ...
. He devised a new strategy, in which the airline would better utilize tis fleet by placing flights closer to each other and flying throughout the day. He also proposed competing head on with SAS, as he believed that Maersk Air with the new strategy could operate with lower costs than the consortium. The plans materialized in 2004 with the establishment of routes from Billund to Milan,
Oslo Oslo ( , , or ; sma, Oslove) is the capital and most populous city of Norway. It constitutes both a county and a municipality. The municipality of Oslo had a population of in 2022, while the city's greater urban area had a population ...
and Kristiansand. The airline entered a codesharing agreement with
Kenya Airways Kenya Airways Ltd., more commonly known as Kenya Airways, is the flag carrier airline of Kenya. The company was founded in 1977, after the dissolution of East African Airways. Its head office is located in Embakasi, Nairobi, with its hub a ...
, allowing passengers to fly from Billund via Amsterdam to
Nairobi Nairobi ( ) is the capital and largest city of Kenya. The name is derived from the Maasai phrase ''Enkare Nairobi'', which translates to "place of cool waters", a reference to the Nairobi River which flows through the city. The city proper h ...
and onwards to 26 African destinations. A new reservation system was introduced allowing passengers to pick their seat upon booking and opt for additional seat pitch. The aircraft received a new seating plan, whereby four different classes were introduced, named "small", "medium", "large" and "x-large", with pitches ranging from and from six to four abreast. Each aircraft would increase its annual flight time from 2,200 to 3,600 hours, allowing for more routes to be flown with the same fleet. Combined, this allowed for a significant drop in the airline's
unit cost The unit cost is the price incurred by a company A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a com ...
s.Ellemose: 244 A name change to Maersk Air Express was considered, but dropped to ensure continuity. But the change in strategy was reflected through a change to the airline's visual profile. Aircraft received a new white and dark blue livery, replacing the old light-blue Maersk colors. The airline adopted the slogan "fly as you like" and focused its route production on typical holiday destinations and cheap fares. The airline focused on having a uniform fleet of 737-500 and -700s. It therefore sold its CRJs to Cimber, who took over the routes from Billund to Aalborg, Brusseels, Milan, Munich, Oslo and Stockholm. The four-class system was complicated for passengers and by late 2004 it was reduced to three. However, sales increased by 34 percent, reaching 2.7 million that year. The airline continued to lose money and in December 2004 a further DKK 400 million in share capital was provided by the owner. A deal was also struck with Star Tour to wet lease six of the aircraft for inclusive tour charters. The year ended with a deficit of DKK 499 million. Contributing causes were rising fuel costs, selling more discounted tickets than planned and a weak dollar, which influenced the books as the Maersk Group adjusted its fleet book values to the annual dollar rate.


Merger with Sterling

Since 2002 Maersk had seen competition in the scheduled market from Sterling, which had reorganized itself as a low-cost carrier targeting the Mediterranean leisure market. In 2005 Fred. Olsen & Co. sold the airline to
FL Group Stodir ( is, Stoðir, FL Group prior to 4 June 2008) is a majority family-owned investment company located in Reykjavík, Reykjavík, Iceland. The company was founded on July 20, 1973, under the name Flugleiðir. It was formed as a holding compa ...
, an Icelandic holding group which also owned among others Icelandair. The Maersk Group announced on 30 June 2005 that it would sell Maersk Air to Sterling. Star Air and the corporate jet were kept out of the deal. Ownership of the 737 was also not included, and instead there were leased to Sterling.Ellemose: 253 The sales price of Maersk Air was never made public.Ellemose: 254 The new airline, which took the Sterling name, had a fleet of 30 737s and 1,900 employees upon its merger in September 2005. One hundred and eighty of these were laid off. It was at the time the fourth-largest low-cost carrier in Europe. The leasing agreements proved unfavorable and Maersk Aircraft needed an additional DKK 300 million in share capital in 2005. Maersk Air pilots were met with lower wages and reduced seniority, having to accept the wage level of Sterling. Five of Maersk's routes were terminated and the flight slots reallocated to other Scandinavian markets. The new company sold Maersk Air Cargo to SAS on 1 October 2005.Ellemose: 261 Despite a steady growth in the number of routes, revenue and passengers, Sterling Airlines failed to make a profit. The airline was taken over by partial owner Pálmi Haraldsson. He had to issue new share capital of DKK 444 million in 2008. However, the 2008–11 Icelandic financial crisis created liquidity problems and attempts were made to sell the airline. These failed and on 29 October 2008 Sterling filed for bankruptcy. The main competitors, SAS,
Norwegian Air Shuttle Norwegian Air Shuttle ASA, trading as Norwegian, is a Norwegian low-cost airline and Norway's largest airline. It is the fourth largest low-cost carrier in Europe behind Wizz Air, easyJet and Ryanair, the second-largest airline in Scandinavia ...
and
Transavia Denmark Transavia Denmark ApS, also known as Transavia.com Denmark or Transavia Denmark and trading as transavia.com, was a Danish based low-cost airline operating as a subsidiary of Transavia group. Its main base was at Copenhagen Airport. Transavia D ...
, all rushed to establish services on the terminated routes. By the time parts of the estate had been bought by Cimber on 3 December, most of the lucrative slots and routes had been captured.Ellemose: 264


References


Bibliography

* {{Portal bar, Aviation, Companies, History, Denmark Maersk Air
Maersk Air (), also known simply as Maersk (), is a Danish shipping company, active in ocean and inland freight transportation and associated services, such as supply chain management and port operation. Maersk was the largest container shipping line a ...
Maersk Air (), also known simply as Maersk (), is a Danish shipping company, active in ocean and inland freight transportation and associated services, such as supply chain management and port operation. Maersk was the largest container shipping line a ...
Aviation history of Denmark