airBaltic Oulu Base – New Gateway to the Arctic

Though airBaltic’s intention to open a base in one of Finland’s regional airports was known already for several months – the official announcement came today - Oulu has been chosen over Tampere and Turku. Opening is going to happen in 2012, when Oulu terminal capacity will be increased. This decision is hardly explainable from point-to-point strategy as Southern Finland is more populous, the competition is still limited (especially from Turku) and flight times to Western European destinations are shorter. Furthermore - Tallinn and Vilnius base examples demonstrated – all other point-to-point bases for airBaltic has been a target for cuts if not working so well as from Riga. So is there any way how Oulu base can become a complementing not competing base in BT’s network?

  

The unique market - Arctic

RIX is in perfect location for serving Southern Finland, but the airports of Northern Finland are too far and with too less traffic to Western and Southern Europe. But the demand for Arctic and sub-Arctic routes can be high enough to sustain daily or double-daily flights if traffic from Oulu and other Finnish cities is added. Here is my vision how to make it work: 

The far north towns are proposed to be served with overnight flights arriving in Oulu at early morning. In Oulu passengers could change to:

1. Direct flight to Riga and further to any destination in Europe;

2. Any flight proceeding to towns in Southern Finland;

3. Other direct flights – for instance Stockholm, Oslo, Helsinki, Copenhagen, St. Petersburg.

Most of planes continue travel southwards with one-stop flight to Riga in order to provide link between Oulu and mayor Finnish cities and to pick up passengers for Riga hub departures starting at 10:00AM. Once arrived in Riga planes participate in daytime flights to destinations in Europe. As the Oulu-based planes most probably will be turboprops, they must serve the closest destinations from Riga – cities in Central Europe. Northwards journey starts shortly before 3:00PM and goes exactly the opposite way as the morning travel.

I see such advantages in this complex routing:

1. High aircraft utilization;

2. The widest possible market to towns in Arctic – important as the population is low;

3. Key markets using this routing: Arctic to Southern Finland via Oulu, Arctic to Riga and other mayor daytime destinations via Oulu; Southern Finland via Riga to Europe; Central Europe to nighttime destinations in N, E Europe and Asia via Riga;

4. Planes in utilization at Riga during the busiest daytime hours.

And such disadvantages:

1. Delay strategy is needed – being late is some segments may cause missed connections and delayed onward flights. But as booth Riga and Oulu are going to be bases, replacement capacities can be provided.

2. Tricky maintenance scheduling;

3. Arctic to South, West, Central Europe markets served with two transfers – one in Oulu, second in Riga. Situation can be improved by adding some direct flight to Arctic towns from Riga or offering more direct flights from Oulu to destinations in Europe.