Estonian Air Loss Clocked at €8.1m, Net Gain Posted in Air Transport Services

Photo: ERR
4/3/2014 1:20 PM
Category: Economy

National carrier Estonian Air has announced its loss figure for last year - 8.1 million euros. That is roughly 1 million euros deeper in the red than originally forecast by the state but consistent with reports in April.

According to the figures released today, Estonian Air's turnover dropped in 2013 by 21 percent to 72.3 million euros.

The airline says the results are in line with its restructuring plan, and noted that in spite of the overall loss, it had a net gain of 7.4 million euros from its principal area of activity, air transport services.

Commenting on the results, Jan Palmér said the carrier was in more solid shape than it was on November 1, 2012, when he took over, and on track with restructuring.

He said the European Commission was looking at the matter of state aid and evaluating the restructuring plan. He said the state-owned company was working with the Estonian officials to make sure the decision, expected soon, would be positive.

The company served 551,169 passengers last year, a drop of 37.9 percent from 2012. Two in seven aircraft provided charter services, the volume of charter flights growing fivefold, to 209 flights.

According to Palmér, the loss is mainly attributable to extraordinary costs and the failure to find enough business for two Embraer 170 aircraft that the airline was hoping to sell.

Before the European Commission decision, the airline cannot convert the 37-million euro loan it received from the state into equity, which means that the airline’s equity was -14.7 million euros last year, which is illegal according to Estonia’s Commercial Code.

If the commission agrees that cash given to the airline was illegal state aid, they must be repaid it with interest, which would bankrupt the airline. The decision is expected to be made this fall.


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