Bankrupt airline Avies now without license, all flight operations ceased (2)

4/1/2016 2:47 PM
Source: BNS
Category: Business

The Estonian Civil Aviation Administration (ECAA) suspended the air operator's certificate of the bankrupt airline Avies on Friday. Avies operated flights from Tallinn to Kuressaare, Kärdla, and Stockholm. The airline is not allowed to provide aviation services until the reason for the suspension is eliminated.

According to the Estonian Civil Aviation Administration, Avies partially failed to meet the requirements that guarantee compliance with aviation safety standards. As a result, Avies' license was suspended for six months starting Friday, or until the shortcomings are eliminated.

Passengers with tickets for Avies flights were asked contact the company. They can turn to the Consumer Protection Board for help in the case of disputes.

The creditors of the bankrupt airline had unanimously approved a new action plan in February, which they expected to be endorsed by the courts. The Harju County Court had declared Avies bankrupt and appointed lawyer Veli Kraavi trustee on Jun. 26, 2015.

The bankruptcy petition against the airline was filed by Swedish companies Swedewings and Bromma Air Maintenance. However, the creditors decided at their first meeting not to liquidate the company and let it remain in business.

In mid-July 2015, Avies had debts amounting to €8.3m. Kraavi said at the time that it would be decided in the restructuring process whether or not the debt would be reduced, or payments rescheduled.

The Saare County government said the decision was bad news for the island's residents. They would have to start looking for a new partner if the company didn't eliminate the shortcomings by summer.

Karl Tiitson, development adviser to the county government, told the Baltic News Service on Friday that the county government now had to sit down with Avies’ managers to discuss how and when the company would be able to eliminate the shortcomings named by the ECAA.

"Since the summer season is around the corner, we definitely need to know by summer. If it takes them six months to do away with the shortcomings, we will terminate our agreement with them and look for a new partner," Tiitson added. Saaremaa needed a working flight connection to Tallinn, he said.

An average of 1,300 people a month fly on the Tallinn-Kuressaare route in summer. The number of passengers carried by Avies on that route in all of 2015 was 12,000.

Avies said they considered the ECAA's decision to suspend their license unjust, as a week ago the company had presented the regulator with certificates of compliance with air safety standards. They intend to contest the decision.

The Ministry of Economic Affairs and Communications plans to announce a new tender shortly and resume flights to Estonia's biggest islands before Midsummer's Day. Concessions on safety were out of the question, Minister of Economic Affairs and Infrastructure Kristen Michal said on Friday.

Steps agreed upon in supervision hadn’t been taken by Avies, Michal said, and pointed out that the company still had a chance to fix its shortcomings and take up its flight services again.

Editor: Dario Cavegn

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