Missing Women, Money and Airplanes – E24

Erik G. Braathen surprised many on Tuesday when he and a team of experienced pilots, most of them with flight time in Norwegian, released the news that they will start an airline.

But there was also something else that kept the talk going on Tuesday: management’s image.

E24 even heard that the press conference in central Oslo was joked that the image of the new administration might look like an advertisement for Dressmann, as some women are not in the administration yet.

– We have thought about it. The aviation industry is quite a thin, male-dominated environment, but we’ll see what we can do with it, Erik G. Braathen tells E24.

Braathen, who has aviation and tourism bubbling in his blood vessels, began to think about the idea of ​​a new airline in March.

– This is an opportunity you have once in a lifetime, says Thomas Ramdahl to E24 with a smile when asked why he has thrown himself into it.

Thomas Ramdahl, who was Norwegian’s chief commercial officer and was traveling with Höegh Autoliners, was quick to agree to return to aviation.

– I agree, adds Brede Huser.

He has a long career in Norwegian and ran, among other things, the Reward bonus program. They have no plans for an immediate bonus program at the new company.

– So you have a name for the company?

– You can go to Nyttflyselskap.no to continue, says Brede Huser with a smile.

– Actually it was Brede who was going to find us office space, but now I will be the one who has to do it, continues Ramdahl and smiles, while looking at his colleague.

Huser had broken his ankle and had to trip on crutches at the press conference.

I need plane

Flying heir Erik G. Braathen isn’t the only one investing in Norway. On Tuesday, Hungarian low-cost giant Wizz Air announced that it will open domestic routes in Norway, 14 years after they started flying to Norway.

The aviation industry is one of the hardest hit as a result of the corona pandemic. On Tuesday, Norwegian released traffic figures for September, which showed a passenger figure of 90 percent during September of last year.

A crisis still opens opportunities. The Norwegian aviation market is very attractive and has generated great revenues for SAS, Norwegian, Widerøe and other players for several years.

– What do you think about Wizz entering the national market now? Do they stock up on the cake you are going to bet on?

– It is interesting that several have analyzed and seen that the Norwegian market is attractive. We are not afraid of competition, says Erik G. Braathen.

– We were probably as shocked as everyone else when Wizz came in with the news. But what we see is that it’s not just us who think Norwegian Domestic is attractive, says Thomas Ramdahl.

– Does this interfere with your plans?

– We’ll see. Competition is good, says Ramdahl.

In addition, there is no shortage of opportunities to rent airplanes at a good price during the crisis:

– Airfares are one of the reasons we are investing now. Now there is good access to planes, and prices are historically low, Braathen tells E24.

The new airline will use five Airbus A320neo (used by Wizz Air and in the implementation phase by SAS) or Boeing 737-800 (used by Norwegian).

It has not yet been clarified what type of aircraft the company will use, but one or the other will be chosen to have a type of aircraft in the fleet.

Braathen informs E24 that no lease has yet been concluded for the rental of aircraft.

I need money

It is not only aircraft rental contracts that must be concluded. Several other centerpieces must also be fitted before the first plane can take off.

There are currently about 25 people working full time with the start-up of the new airline.

The goal is to have 400 employees by 2022.

– Today, we are 25 potatoes that we have to do everything possible, but it is incredibly fun even then, says Thomas Ramdahl with enthusiasm.

The second thing you need space is funding.

– You say you are willing to invest NOK 50 million in this company. How much capital do you need to stay afloat until you make a profit?

– It’s too soon to say that.

– Have you been in contact with potential investors?

– No. But that’s why we also left today, to begin that process, says Braathen.

– But for this to be a good investment, it must be well capitalized from the start. In the aviation industry, you have to take risks where possible, and a strong balance is important, continues the aviation entrepreneur.

Business model based on salary costs

Profitability in aviation generally depends on three key factors: fuel price, aircraft capital cost, and wages.

– With aircraft rental prices at historically low levels, the cost of personnel will therefore constitute a relatively large proportion of our costs, says Braathen.

The grid hasn’t been set yet either, but Brede Huser and Thomas Ramdahl say the company should think differently than it does traditionally.

Precisely because salary costs will make up a relatively large proportion of costs, the grid must be created based on how the pilots and cabin crew can be used as much as possible; within the allowed hours, they can work every day.

– We have an extreme focus on efficiency and having a simple structure, says Brede.

So there will be no “thin” routes on the grid, just to keep planes in the air as much as possible throughout the day. The strategy is also tailored so that the corona pandemic not only reduces travel activity now, but also in the long term:

– We agree with Avinor’s analysis that the long-term market will shrink by between 20 and 30 percent, compared to before the crown, says Brede Huset.

– We are talking about going back to the market we had in 2011/2012, says R

– How will you arrive commercially as a new player?

– At least we will have an extremely good app and website. In addition, we have already received inquiries from individuals and companies who attended our launch, says Ramdahl.

– Do you want to focus also on the corporate market or mainly on the leisure market?

– I don’t think we will get the big companies right away, because they are often blocked by long contracts. But we would like to fly to everyone who wants to fly with us and we will focus on both the leisure market and small and medium-sized businesses, says Braathen.

Ramdahl adds that they should focus on departures when demand is highest and when there are major peaks during the day and week.