OREANDA-NEWS. November 14, 2011. At a cabinet meeting the Estonian government approved the new growth strategy of the national carrier Estonian Air and passed a resolution to increase share capital to cover the company’s investment needs in the coming years.

The main objective of Estonian Air’s business strategy is to form a bridge between Estonia and the rest of the world, offering better connections when flying to and from the country and thereby boosting the nation’s ability to compete internationally.

In the medium term the company will be focussing on growth and increased efficiency so as to achieve a more secure position on the Baltic, Scandinavian and European markets. In the long term the company will consider its options in regard to the advantages of Estonia’s geographical position, including offering intercontinental long-haul flights in association with international airlines.

The company is planning to add five new Bombardier CRJ aircraft to its fleet, enabling it to replace its existing Boeing planes and reduce its operating costs. The aircraft are also needed in order to launch new routes and provide more frequent flights. Four of the five planes will be delivered in 2012, with the fifth arriving in 2013. Three will take the place of the carrier’s existing Boeing aircraft, while the remaining two will provide it with opportunities for growth.

Estonian Air will also be replacing its turbo-propeller aircraft so as to offer more comfortable regional flights and bring down its operating costs.

In order to implement the first stage of the airline’s new strategy the state will be injecting 15 million euros into its share capital this year and the same amount in 2012. This will allow the company to modernise and expand its fleet and recruit and train additional pilots and cabin crew. It is the company’s view that the return on the investment in the long term will be much greater than the amount initially contributed. The strategy will create around 2000 new jobs in Estonia, 800 of them in the tourism industry.

Estonian Air is not solely dependent on state investment: if its financial results in 2013-2014 are good, it also stands to attract the investments it needs for growth from other sources. The state took an active role as an owner of AS Estonian Air in 2010, since November of which it has held a 90% stake in the company. The new supervisory board of the carrier was given the task by the Ministry of Economic Affairs and Communications of developing a future strategy for Estonian Air that would help it achieve its two main goals: offering more regular connections between Tallinn and key business centres in Europe and ensuring sustainable profitability.