Connecting the dots

For several months now, airBaltic’s network management and development has been in the hands of Thomas Alexander Ramdahl, who has over 20 years of experience in the aviation industry. In this interview, he opens his office door and tells us what goes on behind the scenes when an airline decides to expand its network and open new routes. In this case, airBaltic has just published its list of new destinations for summer 2024.

Deciding on how to expand a network seems like a very exciting part of an airline’s operations.

Some people say that it’s even at the heart of an airline – deciding on routes, frequencies, timings, aircraft, and airport slots, which are the landing times at airports. Routes are always the most exciting – what routes to open, which ones to close. But these decisions are made in close cooperation with other departments, especially revenue management. It’s a big puzzle that needs to be put together.

Generally speaking, there’s a financial structure for every route, and if an airline isn’t earning money on a certain route or there’s no positive trend in sales, it often decides to take it out. But it has to offer something else in its place.

For airBaltic, the task is to find out where Latvians, Lithuanians, and Estonians want to travel. We have a base in Tampere as well, so we’re also trying to find out what kind of leisure and business destinations are interesting for them. We look at all kinds of aspects, and, of course, we’re in close dialogue with other colleagues.

Can you tell us about the process in more detail?

First, I’d say you need to look at trends. Where do people actually travel to and where is there a demand? Then there’s historical data from the airports about traffic numbers all the way back to 2000. Traffic data is one thing, but you can look at the population data in different countries as well. Another method I’ve used to find out about potential traffic is getting data from phone companies about the calls between countries. If there are a lot of calls between country A and B, then that means traffic, no matter whether they’re business or personal connections.

Of course, the pandemic changed the picture, but if you look, for example, at today’s capacity of flights between the Canary Islands and Scandinavia compared to 2019, it’s still 20% less than it used to be. The number of flights hasn’t picked up yet following Covid-19, so my team and I saw a window for us to try to get a part of that traffic for airBaltic. And that’s what we did. We opened a seasonal base in Las Palmas, locating two aircraft there, because there are so many people from Scandinavian countries travelling down to Las Palmas during the winter.

There are specific tools we use to set up a route and put tickets on sale, but then it comes down to brand awareness in the region, which is very important. Commercials and advertisements can be very expensive, but another way is to work with tour operators pre-selling some seats. It’s all about getting people on board and letting them become acquainted with the product. Then you see the brand awareness increasing slightly. But for new routes, you always need to have patience.

Last but not least, we have to bear in mind that, over time, a route will typically ‘wear off’. After people have been to the same place five or six times, they might start wanting to explore something else. So then, as an airline, we need to have that something else to offer… An airline also has to be careful not to have too many similar destinations, because then in a way it’s stealing from itself. Having the correct number of destinations and frequencies is always a balancing act, all the time.

While we’re looking at many different aspects to define if there’s a need for travel between certain destinations, it’s also good to just have a gut feeling. And courage. Because if you don’t dare to try something new, you will fail. You need to be positive and try different things.

Next summer’s routes are out now. What were these choices based on?

Yes, airBaltic recently announced seven direct flights from Riga: to Alicante, Tirana, Sofia, Ljubljana, Skopje, Chisinau, and Pristina. A mixture of several factors led us to these particular decisions, but mostly we were looking at the potential traffic from Scandinavia via Riga to all those destinations. There are many people from the Balkans living in Scandinavia, but there aren’t that many flights to the Balkans that can connect and allow them to travel there throughout summer.

It’s about generating as much revenue as possible with the tools that we have. Flights from Scandinavian cities to Riga are our tools, and if we can connect all the dots, we can increase the market. The market in the Baltics is not huge, so we depend on connecting traffic in and out of Riga as well.

What do you want to achieve here at airBaltic?

airBaltic wants to grow as an airline and increase its number of aircraft, and I want to make airBaltic much more known outside the Baltics by expanding its network and bases. This is something I’ve done in my previous jobs, too. I know how to grow a company and make different bases work.

But it’s a team effort to make that happen. It’s not only the network department saying that we’re going to open a base here and will be flying there – the airline’s commercial side is also very much involved. The most interesting part of all this is that countries and people are different, and so things need to be done differently in each country. What works in Latvia does not necessarily work in Lithuania and Estonia. And it certainly may not work the same way in the Scandinavian countries. You need to look at each country individually and discover which button to push to make things happen, and that’s very exciting!

What tempted you to say yes to airBaltic and join the company?

There were many factors, but at the time when I was approached, I was free and open to new opportunities. I already knew about airBaltic, and it has a reputation in the industry as being willing to think differently and move forward with trends. It has a traditional structure, but it’s also able to adapt. For example, there’s the Starlink project, NFTs, and airBaltic was one of the first airlines in the world to accept crypto currency. It’s willing to adapt to trends, which I do enjoy. Because coming to work and doing the same thing day after day and not being able to do something new – that doesn’t appeal to me.

And did your first impressions match your expectations?

When I had my first interview in February, the weather was very grey, almost dark, and wet. But I did say yes to the job and moved here. However, I do commute back to Oslo every weekend, because my family is still in Norway. When people ask me whether I enjoy living in Riga, I say yes, I do. But I can’t give you my full answer yet, because I have to experience living here from November to March, which is the darkest period here (laughs).

Weather aside, Riga is a small city, which is very good. The people at airBaltic are friendly and I feel welcome. It’s a really good environment to work in, and it’s really fun to work here because my colleagues are so knowledgeable in their fields. Therefore, my job is more leading than telling, which I enjoy. I like having people around me with whom we can build something together.

Your career in aviation spans more than 20 years.

I started working part time at the airport when I was in college. Then, back in 1998, I began working for the Norwegian airline Braathens – in revenue management and later in the network department, where I continued to work after Braathens was bought by SAS.

In 2008, I was approached by Norwegian to lead its network department. After five years, I became the airline’s chief commercial officer, leading the whole commercial part of the airline: revenue management, network, sales, marketing, and customer relations. But in 2019, I decided I wanted to do something else because I’d been in aviation for such a long time. So I became chief of sales for a global shipping company.

But then an investor called me in April 2020 – just as the pandemic started – and asked me whether I wanted to be a part of a very interesting start-up project. He wanted to set up a new airline and do something different. I said yes to it, and we took off in a matter of months. Within a couple of years, we had grown to 12 aircraft and flew until January 2023, when unfortunately – and mostly due to pandemic-related issues – we had to file for bankruptcy.

Building something from scratch was really exciting! But that chapter is over for me, and now I’m here at airBaltic, hoping to take some of the good things we did at the other company and try to make that happen here as well. Joining airBaltic is also letting me understand new fields within the industry. The dynamic here is good, and when people work together and do a good job, you can have an impressive, kick-ass product.