Finnish startup Lygg has raised €3.6 million (approximately $3.9 million) from venture capital fund Superhero Capital to continue developing its on-demand-yet-scheduled regional air services concept.
Lygg was started by pilot and entrepreneur Roope Kekäläinen, and Jari Viinikkala who hails from the financial services industry.
In conversation with AeroTime, they shared some details about how Lygg aims to capture a share of the corporate air travel market. Lygg offers direct and convenient air links between regional airports with almost no scheduled traffic but that nevertheless serve specific companies and industries with regular travel needs.
While Lygg offers regular schedules, there are some elements that differentiate it from traditional airlines. For example, it only starts a new route after it has secured a minimum amount of traffic by closing contracts with corporate customers.
For example, if a large company has facilities in several locations that require its staff to travel frequently between them, Lygg can offer a deal to provide capacity on that route at the time that best suit that customer. The terms of the contract and the pricing would depend on the capacity committed. Once the route was up and running, Lygg would also market it to other companies and the public.
All flights are operated with relatively small aircraft, with between eight and 19 seats, since Lygg focuses on niche routes that have no or limited conventional air service.
When designing Lygg’s business model, CEO and founder Kekäläinen applied lessons learned from the demise of Go!Aviation over a decade ago, which was another regional airline he founded in Finland.
While high capital expenditures and a premium positioning turned out to be the wrong call at the time, Lygg has made a conscious effort to be nimble, flexible and position itself as a business tool, rather than a luxury.
Lygg does not own any aircraft and it subcontracts the flying to existing operators. This not only allows the startup to keep capital expenditure to a minimum, but also gives it the flexibility to add capacity only as needed.
Regional charter operators welcome the prospect of deploying their aircraft on regular, prolonged assignments. Since some routes may run for relatively long periods of time, revenue stability could even encourage some of these independent operators to invest in new aircraft.
At the moment, Lygg operates in the Nordics where it runs routes such as Helsinki to the Swedish city of Örebro and between Tampere (Finland) and Stockholm (Sweden), which it is launching in August 2023. However, the startup plans to expand to other countries in Europe soon, with the founders hinting at Germany, the United Kingdom and France.