It has to be online as far as I understand. The launcher keeps the engine and itself up to date and there is no offline option as far as I can tell. Having said that, once you have the version … you can go offline and use it … but to get the initial version you have to be online so it can be downloaded.
Yes … once you have everything downloaded … when the launcher starts up and it can’t connect to the internet it gives you the option to go offline. You can then still work with the engine and your games.
You will however not have access to the Marketplace or the Learn Tab … which might or might not be important to you. 8-}
You don’t need to run the launcher at all if you don’t want. If you have built the engine from sources or installed it fully and there is a file 'Engine\Build\PerforceBuild.txt" present in the install location (or the launcher isn’t installed at all) it won’t start the launcher when you start the editor.
You can run it without the launcher - a few days ago when my connection was wonky it asked if I’d like to use it in offline mode, and that worked.
Also, you can just run the ue4editor.exe from the install directory and it’ll work.