Headquartering an Airline far from an Airport is not a recipe for success

In Norway we have several examples on this. Norwegian was/is hq’d at Fornebyu that haven’t been an airport for over 20 years. Flyr was hq’d in the overexpensive Oslo city center. And Norse hq’d in Arendal, a town without an airport and even further from Oslo airport than Oslo itself.

The train connections from hq to airport might be frequent and only take halve to an hour but its not the same as a 10 minute walk to oversee where your real operations happens. The place where your customers experience your service and most of your critical costs are spent. But also the costs most easily squeezable.

Closenes let you reduce the costs before they occur rather than just financially overseeing the bills in accounts after they have happened. That makes a difference when it comes to reducing costs through strict control. 

And low costs are the most important for being able to underprise your competitors. Something all the beforementioned airlines tried and tries because they see themselves as a kind of low cost operators. Not the type of Ryanair and Wizz but more like Easyjet. A kind of a premium low price. A segment all the majors also want their slice of.

Being based at an airport also let you do easy day trips to the other key hubs of your network, or even halve day trips, for frequent vists, stricter control and spreading the gospel of your airline. 

All these airlines ended up leasing out part of their fleet even in the normally busy and profitable summer months. Meaning they wheren’t close enough connected to their businesss to fill the planes they had commited to, and themselved had leased for a lot of money. 

Flyr ended up doubling its fleet from 5 to 10 with overexpensive brand new planes after only 6 months flying. And then the following winter they only managed to have 1 out of 10 planes flying on a regular basis and desperately trying to lease out 5, even trying to commit them for the summer months. Clearly without demanding an upfront  downpayment because they folded shortly after the leasse agreement was announced. Summer 2023 Norse had 5 out of 15 planes leased out. But are the subleaseouts agreements profitable because now they are on the hunt for more capital to have a chance of surviving the winter.

One, Norwegian where so distanced from their activity that they thought if they could run an airline remotely in Norway they could also do it in South America thousands of kilometers away. Wrong.

And its not only airlines. Boeing haven’t really done brilliantly as a maker of commersal airplanes after they moved their hq to the financial east coast and far from any of their producing factories. And when it after a few years went wrong big time they are not moving back but rather to a politial center to squeeze more money out of them who don’t think about profit and loss because they are handing out public money and not the greens they themselves had to strive for.

On the other hand the Ryanair HQ was quickly moved from Dublin city center to Dublin airport as soon as O’Leary took the reins. And even when they outgrew it he moved it to a premise about 5 a minute drive from the airport.