Estonian Air CEO Jan Palmér says the company has too many planes of different sorts. The initial goal is getting rid of two Embraers. Future vision? Five planes of the same type.
First priority: getting rid of excess planes
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What’s Estonian Air’s greatest expense? The main reason for loss of money?
It would be optimal for Estonian Air to fly five planes of the same type. As it is, we have different types. European regulations being very strict, every type needs a certain storage of different spare parts, differing maintenance. Pilots need to be trained for different planes.
At the moment, we mainly fly with three Bombardier CRJ700 type planes. We also have four Embraer 700 planes. The first goal is getting rid of two Embraers.
In aviation, we have such a notion as wet-lease. Meaning that a plane is rented out together with the crew – as a rule, pilots are included in the contract; cabin crew deal varies, as some require local language skills. In essence, we would be a subcontractor, flying somebody else’s lines. Thereby, we’d be rid of two Embraers, having three Bombardier CRJ700 and two Embraer planes.
The ideal would be having all five same type, but it still would be a step in the right direction. Right now, we are in discussions with several European airlines.
(Palmér later specifies that Estonian Air’s Bombardiers and Embraers are basically equal, but it looks like it is easier at the current European market to get rid of Embraers. The more so that the Bombardiers belong to Estonian Air, while the Embraers are leased.)
Have you talked with the pilots about them being rented out with planes? Will they have to live in another country then?
Yes, it may mean that they have to move, at least temporarily maybe, to another country. We have talked with them and they have received the news well. Considering that the other option would be losing the job…
But, back to the planes – we also have the Saabs. Their lease is up in April. In addition to that, we have a Boeing 737 – its lease is up in June and we will discontinue that also. By the way, the Boeing stands idle, we don’t do maintenance for it, and neither do we buy spare parts. We do, however, make leasing payments. This is cheaper than using it.
Estonian Air does have historical baggage that we need to get rid of.
What deadlines have you set? When do the two Embraers go? When will Estonian Air have five same type lanes?
I’d like to get the company cleaned up by summer. That would be the first version: three Bombardiers plus two Embraers. Next step will be five of the same type.