Estonian Air failure could cost nation €150 million each year, says airport brass (2)
The bankruptcy of national carrier Estonian Air and the failure to set up an alternative would cost the economy 1 percent of GDP, roughly 150 million euros each year, says Tallinn Airport board member Erik Sakkov.
“Various studies have shown the direct and indirect impact of Estonian Air to the Estonian economy is close to 1 percent of GDP, about 150 million euros last year. So to be clear what is at stake,” Sakkov told Postimees.
He said the only bad plan for Estonian Air is to do nothing, and any other idea, which would allow Estonia to keep air connections, would be acceptable.
Estonian Air was on the verge of bankruptcy a few years ago, until the state bailed the company out. The European Commission began an investigation into state funding of the company, and after three years, it is yet to make a ruling. If it decides against Estonian Air, the company would have to pay the money back, money which it does not have. In that case Estonian Air would fold.
The state recently set up a back-up company with a 40-million-euro injection. If Estonian Air fails, then a new national carrier will be built using the back-up company. If Estonian Air is cleared, that money will go to Estonian Air, which will use the money to pay the state's loans back.