Estonia saves Estonian Air – for now anyway!

Estonia’s Ministry of Economic Affairs and Communications announced on Feb 26th, that the Estonian state has injected EEK 38.8 million (EUR 2.5 million) into the national carrier Estonian Air. According to the statement the decision was made because the government is keen to keep important direct routes going in a climate in which several other airlines have ended flights or cut their frequencies from Tallinn.

 The other shareholders have agreed to contribute an additional EEK 75.2 million, according to the Estonian newspaper Postimees. However, the newspaper’s online edition writes that SAS will convert EEK 37 million in issued loans to Estonian Air’s share capital and inject EEK 19 million, while Cresco will pay EEK 19.2 million. The proportions of influence between the shareholders in the airline will not change. SAS Vice President Ole Orver said that the Estonian government’s decision will certainly support Estonian Air’s development, but emphasized that SAS still wants to give up its ownership in the enterprise. The extra capital, he added, should make it easier to find a buyer. Cresco CEO and Chairman of the Board Olev Schults noted that he has always tried to be a serious minority shareholder and will maintain this strategy for as long as it is involved in the circle of the company’s owners. Postimees then quotes businessman and former economy minister Meelis Atonen as saying that the state should have fully sold Estonian Air to SAS while it could. “I have said before that the state is not a good aviation business operator and I am still of this opinion. SAS had an interest in obtaining 100 percent of Estonian Air and the state should have attempted a sale at that time,” he said.

For us, tavel agents, the situation with flights into Tallinn has become quite nerve-wrecking. Quite a few airlines have pulled their flights within the past year: LOT, Austrian Airlines etc. We will definitely miss the great connections KLM used to have (they will drop their Tallinn flights from May 4th) – and  and while it is becoming trickier all the time to find good connections to get the travellers to Tallinn – it is even a bigger problem to get them back home, as for example Lufthansa and Czech Airlines have their flights out of Tallinn scheduled too late in the afternoon to be able to catch any transatlantic connections.

While Estonian Air has reduced the flight frequencies to the closest big hub London to only twice a week and cancelled the flights to Frankfurt altogether (Lufthansa will be still covering that route) – they are opening quite a few seasonal routes to Europe. According to their press release on February 12, the following seasonal routes will open in 2009:
Paris: 29Mar-22Oct, THU & SUN
Hamburg: 01Apr-24Oct, WED & SAT
Barcelona: 09May-24Oct, SAT
Dubrovnik: 30May-03Oct, SAT
Dublin: 04Jun-30Aug, THU & SUN
Rome: 13Jul-31Aug, MON

There are two new routes to Stocholm for the Estonian out-of-towners:
Kuressaare – Stockholm: 02Apr-25Oct, THU & SUN
Pärnu-Stockholm: 30Apr-23Aug, THU & SUN

Please note that these schedules are subject to change without notice!
For the most up-to-date info please visit http://www.estonian-air.ee/lennuplaan

We are keeping our fingers crossed for the Estonian National airline. In November 2008 SAS expressed an interest to buy the whole thing – but just recently the big news was about the “fall” of flyLAL and SAS deciding to sell all their shares in Estonian Air…

It is reassuring that the government stepped in and showed their confidence and support. These are trying times – why not make use of our resources? Air in Estonia is free – and there is lots of it… Why not put it into good use! After all, it is one of the important connections to Europe – and to the world.

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