Sterling has been formally owned by twin companies Bonheur ASA and Ganger Rolf ASA, two of the publicly traded cornerstones of the empire run by Olsen, whose interests range from shipping to Timex watches.
While Norwegian-controlled, Sterling's headquarters have been based in Copenhagen as it was originally founded by the Dane behind the Tjæreborg charter tour company, Ejlif Krogager.
Bonheur and Ganger Rolf are selling Sterling for DKK 400 million (about USD 72 million) to Fons Eignarhaldsfelag, an Icelandic investment firm controlled by partners Palmi Haraldsson and Johannes Kristinsson. They were previously major shareholders in Icelandair and currently own cut-rate carrier Iceland Express, according to a statement from Ganger Rolf.
The statement also noted that Iceland Express will be merged into Sterling, which flew more than 1.8 million passengers in 2004 and has more than 600 employees.
Turbulent times
Sterling was at the forefront of offering relatively cheap, one-way tickets to European destinations at fares far below those of dominant carriers SAS and, at the time, Braathens. SAS later took over Braathens when it ran into trouble competing with upstart Norwegian Air.
Norwegian also went into the European market and picked up the idea of discounted one-way fares sold on a first-come, first-served basis. Last fall, Norwegian started cooperating with Sterling on some key routes as both carriers struggled in the tough airline market.
Despite strong passenger growth, Sterling posted a loss of DKK 119.3 million in 2004, which it attributed mostly to high fuel prices and tough competition. The Fred Olsen companies injected more capital into Sterling to prop up its finances, and Sterling started the code-sharing with rival Norwegian in November.
'More consolidation needed'
Sterling president Harald Andresen has said more consolidation is needed in the airline industry and noted recently that the route cooperation with Norwegian "is not enough." He said there were still "too many operators, and it is too easy to start new low-cost airlines, which will continue to result in over-capacity and rock-bottom prices."
The statement from Ganger Rolf said Andresen will return to his former position as senior vice president within Fred. Olsen & Co in Oslo when the sale of Sterling is completed, expected by May 1. Andresen will remain available as an advisor to the new owners for up to four months.
The sale to the Icelandic investors is the latest in a long period of ownership turbulence for Sterling. It was sold out of the Tjæreborg group in 1986 and then went bankrupt in 1993. It later was subject to a management buyout and the Fred Olsen companies bought 90 percent of Sterling in 1996.
Ganger Rolf and Bonheur introduced scheduled service in 2000 and currently own 50 percent each of Sterling's shares.
