Estonian Air Was Very Close to Bankruptcy, Says Former Chairman
Erkki Raasuke, who recently left the Ministry of Economic Affairs to work for LHV, said that the national carrier was days away from having to declare bankruptcy around the turn of the year.
“At first we lost money fast, then we had disputes with the purveyors of the aircraft and creditors. Then the unions decided that the conditions [for their members] weren't good enough. Add to that the fact that passengers began to think that it was not safe enough to fly on Estonian Air's aircraft,” Raasuke said on the ETV program “Kahekõne” on Thursday.
The former head of the board at the company, Raasuke said that had one of the mentioned problems escalated, the company would have gone under. He also characterized the problem with the unions as a situation that had turned into extortion.
He said that the company has found now its feet, but a number of problems are yet to be solved, such as the question of whether the European Commission will accept the loans and investments the state has handed Estonian Air.
The national carrier announced in July that it had been profitable in June, turning its first monthly profit in years.
Over the past 12 months, the company has cut a number of staff, including 19 pilots, sold non-essential assets, rented one airplane to Lithuania and said goodbye to the last of its Boeings.