Estonian Air Restructuring Plan Forwarded to Brussels
The Ministry of Economic Affairs has handed over its plan to restructure national carrier Estonian Air to the European Commission.
The plan, which is subject to approval by the Commission, foresees the state investing €40 million into the loss-making airline, uudised.err.ee reported today.
The state has so far given short-term loans to Estonian Air, recently extending the repayment deadline to 2018.
Minister of Economic Affairs Juhan Parts said at the beginning of May that the restructuring plan would allow Estonian Air to reach profitability in 2015.
The Commission's decision may take years.
A new direction
The restructuring plan marks a turn to a more economical, less ambitious path from former CEO Tero Taskila's program of building Estonian Air into a major regional carrier.
After announcing massive financial losses last year, the company has laid off more than half its staff and cut its number of aircraft, flights and routes. It is also selling properties and subsidiaries.
The company reduced its routes from 24 to 10, but if all goes well it may offer a few additional ones by 2015.
Estonian Air currently has 200 employees on its payroll, down from 340 last year, and is set to eventually make do with 150.
The fleet has been reduced from 13 to 10 aircraft, and will decrease to five in 2015.