Estonian Air decision due this week

One of Estonian Air's recently acquired Bombardier CRJ900s Photo: Postimees/Scanpix
11/5/2015 2:27 PM
Category: Economy

The Estonian Ministry of Economic Affairs has asked the European Commission (EC) for a decision on the national airline Estonian Air this week, after reportedly asking the EC to postpone a decision a number of times.

According Eesti Päevaleht, the ministry will make a decision public on Saturday, November 7.

The daily said all those close to the troubled airline are remaining tight-lipped. The EC began an investigation in 2013 after Estonian Air needed state funds to stay afloat and to restructure. According to EU regulations, a company can only receive a state bailout once every decade, but Estonian Air has received funding at least three times.

Rules also require funding to match market conditions, which Estonia said it has followed. The state did not involve any private-sector companies, which is nearly a must for EU requirements, although later talks were held with Infotar, a company behind the Tallink group.

Reportedly, Estonia asked the EC to delay any decision as Siim Kallas, EU's transport commissioner until the end of 2014, wanted to leave his office first. The decision was then delayed for the March 1 general election and later, Estonian officials asked time to set up a plan B, which has now been done in the form of Nordic Aviation Group, a company the state recently created to take over from Estonian Air in case of a negative decision from Brussels.

The state has handed Estonian Air 130 million euros between 2008-2014. The state has set aside 41 million euros for Nordic Aviation Group and another 32 million euros to take over contracts, if necessary.

Clients will be compensated

Economy Minister Kristen Michal told Äripäev that the state will buy back tickets if a negative decision is made.

“The government has taken a bearing that tickets will be compensated,” he said. He refused to give out any other details.

J.M. Laats

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