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Potential bankruptcy threatens bus services in Oslo 

The strained finances of bus provider Unibuss could cause chaos for Oslo’s bus network if the company folds. 

Published: 24 April 2024 12:08 CEST
Pictured is a bus in operation in Oslo.
Transport in Oslo could be heavily disrupted by a potential bankruptcy. Pictured is a bus in operation in Oslo. Photo by Ben Garratt on Unsplash

Unibuss, which is wholly owned by Oslo Municipality, is in danger of going bust due to large losses, unpaid bills, and fines from public transport firm Ruter for issues with its electric bus fleet this winter. 

Oslo City Council will hold an emergency meeting headed up by transport councilor Marit Vea on Wednesday, where she will be grilled on how the council will avert a collapse in the city’s public transport network should Unibuss go bankrupt. 

Unibuss is comprised of four smaller companies that operate bus routes in Oslo on behalf of Ruter. The company has just over 370 buses in operation and covers around 60 to 70 percent of the routes in Oslo and the neighboring municipality of Bærum. 

Oslo’s fleet of electric busses struggled especially with snow and cold temperatures this winter, which caused frequent chaos across the capital’s public transport network. 

Snow, ice, range and charging issues for the busses lead to vehicle shortages which caused mass delays and cancellations several times over the winter. 

Ruter, which is also part owned by Oslo municipality, believes that the financial problems facing Unibuss mean the company could be forced to file for bankruptcy or undergo a major restructuring, according to a memo obtained by publication Teknisk Ukeblad.  

It has previously told public broadcaster that it was working on a plan in case Unibuss goes bankrupt. 

“There is no doubt that the first days of such a scenario will be very demanding for the residents of Oslo and parts of Akershus,” Ruter’s communications director Elisabeth Skarsbø Moen told public broadcaster NRK.  

“First and foremost, we are working to find a solution together with Unibuss that does not affect Ruter’s customers,” she said. 

“But as those responsible for public transport, we have both a plan and an emergency organization ready to also handle a bankruptcy,” Skarsbø Moen added. 

Should Unibuss go bankrupt, its buses would become part of the bankruptcy estate and if such an event were to occur while passengers were in transit, all passengers would need to disembark at the next stop so the buses can be transported to the depot. 

Ruter said it had an eye on the market to try and see what could be available in terms of extra buses and equipment. 

It said that its priority would be to ensure that school transport, and that healthcare workers could get to work, in the event of a sudden lack of buses. 

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TRANSPORT

Why a Norwegian airline wants to charge tourists more than residents

Widerøe, a Norwegian regional airline, is pushing for a new ticket pricing strategy that will see tourists charged more than residents on some flights.

Published: 16 April 2024 13:47 CEST
Why a Norwegian airline wants to charge tourists more than residents

The airline Widerøe has propsoed a new approach to ticket pricing, over concerns that the recently halved maximum prices on short-haul flights provided by the government may actually make travel less accessible for residents in Norway’s rural districts, regional newspaper Brønnøysunds Avis reports. 

The airline has suggested adopting a Spanish model, where different fares apply to permanent residents and tourists, the newspaper reported on Tuesday.

This model, according to the airline, would aim to strike a balance between making air travel in rural areas accessible for local residents while ensuring that routes are not filled up by tourists.

Norway’s FOT route system

In Norway, the vast majority of air traffic operates under commercial arrangements.

However, to maintain a comprehensive network of flight services across the country, the government pays for transportation by procuring flight route services through public competitions among airlines on routes that may not be economically viable for commercial operators.

These routes are primarily located in western Norway and northern Norway (you can find the full list on the Norwegian government’s website), and Widerøe is one of the largest providers of these flights.

These arrangements, known as FOT routes (forpliktelser til offentlig tjenesteytelse på flyruter in Norwegian roughly translates to a ‘public service obligation on flight routes’), impose requirements such as maximum ticket prices, capacity, frequency, and routing.

Typically, the contract is awarded to the airline offering the lowest cost to the state, granting them exclusive rights to scheduled traffic on the designated route for the contract period.

Higher demand prompts reaction from Widerøe

Effective from April 1st, 2024, and August 1st, 2024, new agreements will govern these FOT routes. One of the tweaks will see the maximum prices that airlines can charge on some routes halved. 

While these agreements are expected to enhance accessibility and affordability for travellers across Norway, Widerøe has already noted a surge in demand on some of the routes, particularly from holidaymakers and leisure travellers.

Concerns have also been raised regarding potential adverse effects on patients reliant on air transportation for medical purposes.

Lina Lindegaard Carlsen, Widerøe’s communications advisor, acknowledged the issue and suggested exploring alternative pricing models to address them effectively.

“It remains to be seen how it will actually turn out, but if it becomes difficult to get people in need to be served, then we believe that other price models will work better for those completely dependent on aeroplanes as public transport,” Lindegaard Carlsen said.

The communications advisor added that Widerøe had recommended to the Ministry of Transport that a new price model be considered. Under this model, residents along the FTO network would get a solid discount on flights, regardless of whether the journey consists is a FTO or commercial flight.

“This would ensure a low price for the residents of Norway’s districts while at the same time ensuring that the most popular departures are not filled up by holiday and leisure travellers many months in advance,” Carlsen said.

Widerøe was formally acquired by Norwegian Airlines in January 2024.

When the takeover was first announced in July 2023, Norwegian CEO Geir Karlsen said, “With this transaction, we will now create a streamlined and more comprehensive offer for all customers, and we look forward to offering seamless travel across our entire route networks.”

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