Estonian flights operator Regional Jet will adopt the Xfly brand for in-house use and lease seven new aircraft to expand its ACMI leasing business. The company will retain the legal name of Regional Jet OÜ.
CEO Jan Palmer said that the aviation market has seen continued consolidation and there is no more room for small independent commercial airlines. The brand name is becoming increasingly important as people tend to prefer well-known names.
Ticket sales will increasingly move into the hands of Google, Amazon, eBay and other global digital giants.
While small operators hold 45 percent of the U.S. airline market, many of them are owned by large commercial operators.
Regional Jet pursues cooperation with SAS and LOT. Major commercial airlines in Europe have also created smaller local operators to service shorter flights.
Regional Jet was created in 2015 and operates regional flights for other airlines. The company has on average six-year contracts with commercial airlines that put Regional Jet's planes and crews at the disposal of major operators. The Estonian company does not use its own livery or any distinguishing marks. Regional Jet does not decide where to fly or sell tickets based on its contracts with airlines.
Regional Jet uses employment agencies and aviation academies to recruit staff, offering its partners planes that bear their logos and motivated crews.
There is a lot of potential for such cooperation, Palmer believes, which is why Regional Jet plans to grow. The company already has €150 million worth of new contracts for the coming years. It has hit "critical mass" to become sustainable and profitable as a result of this volume. Its advantage are low costs made possible by its Tallinn home base.
Regional Jet flies six planes out of Tallinn today, set to grow to eight in the near future.
The company is set to lease another seven Embraer 190/195 aircraft in the next six months.
The company has lacked a clearly distinguishable brand so far. This has created questions among business clients in terms of who they are dealing with and among employees in terms of who they're working for.
Regional Jet's predecessor Nordica that operated as a commercial airline was well established on the market, while recent confusion has made it difficult to hire staff, with business partners preferring to buy services from completely neutral companies.
Until recently, the Estonian company's planes read that the flight is being operated by Regional Jet for SAS, for example, that meant having three separate companies' names on a single aircraft.
This created the need to rebrand Regional Jet. The company will be using the Xfly brand to suggest anonymity flying for different airlines requires. The company will retain its legal name Regional Jet OÜ.
The new name will largely see in-house use and will not appear in the street or in advertisements. The name will also not be found on the sides of the company's planes that will use the logos of partners they are flying for.
Editor: Marcus Turovski