Estonian Air Hit With Historic Annual Loss
Published: 30.03.2012 17:25
Photo: Postimees/Scanpix
Estonian Air suffered the greatest financial loss in its history last year, and the chairman of the company's supervisory board has said that he is “not content.”
Although the company's sales revenue grew by 12 percent, it still took a loss of 17.3 million euros in 2011 - more than six times larger than in 2010.
“Despite the last year’s slump in the aviation market and the fact that Estonian Air’s loss was the smallest in Northern Europe, we are not satisfied with last year’s results,” Joakim Helenius, chairman of the national carrier's supervisory board, said in a statement.
Helenius said the board has set a goal for management to reach profitability within the next two years.
The airline asserted that its financial results were primarily influenced by the increased fuel prices, which rose by 40 percent on average last year.
“The higher fuel prices exposed the fact that we did not have the right size of fleet, as we were unable to fill the Boeings sufficiently given our traffic patterns,” said CFO Wade Stokes.
“In addition, the non-recurring effects were 1.8 million euros, consisting of non-accrued Boeing redelivery costs and a write-off of a Boeing engine repair,” said Stokes.
Estonian Air has not reaped a profit since 2004.
Last year, CEO Andrus Aljas was replaced by Tero Taskila, who, upon assuming the position, said he hoped to bring the company to profitability in 2012. He said then, though, that if fuel prices contiue to soar, the goal might not be achieved. Seven months on the job last year, Taskila earned a salary of 33,200 euros per month on average.
Estonian Air carried 16.4 percent more passengers and operated 13.5 percent more flights in 2011 compared to the year before. The flagship carrier now flies to 24 destinations in CIS, Scandinavia and Europe.
The government of Estonia currently owns 90 percent of the company and has an option to buy out SAS Group's remaining 10 percent until 2014.
Ott Tammik