Estonian Air Completes Financial U-Turn, Execs Say

Photo: ERR
7/26/2013 11:37 AM
Category: Economy

After aggressive cuts in staff, aircraft fleet, flight routes and subsidiaries, the Estonian Air crisis has been turned around, executives said yesterday as Q2 results were released. Still, the company's future is yet to be determined by a European Commission decision.

The national carrier was profitable for the first month in years in June, and second quarter losses, still nearly 1 million euros, were down by 80 percent from the first quarter, ETV reported.

"The other is that we fill our aircraft a little bit better and we have also got a little bit higher revenue per passenger,“ said CEO Jan Palmer, noting a 20 percent increase in sales.

Now that many of the toughest decisions are behind it, Estonian Air says it does not plan to make any more vast changes, such as to ticket prices and destinations, in the near future.

"We have also sold the Estonian Air Regional company. So that's all gone. But we still have part ownership in a company called Amadeus Estonia and also in the fuel company here at [Tallinn] airport. So we are trying to negotiate about trying to sell these because we don't need it,“ Palmer said.

Despite the turnaround from former boss Tero Taskila's grand plan to turn Tallinn into a regional hub, as opposed to more modest aspirations now, the company is actively seeking additional business opportunities, according to supervisory board member Erki Urva.

"We are holding negotiations with very many carriers. At the moment the company has a few aircraft to spare that are not needed for Estonian Air to carry out its flights. One is being used in Lithuania and another is used for charter flights" said Urva.

But the company is not out of the woods yet. After massive financial injections and loans, the Estonian government, in June, submitted a restructuring plan to the European Commission, which may or may not endorse financial aid that has been given.

European Transport Commissioner Siim Kallas said Thursday that there is "still hope“ the commission's decision will not shut down the company.

"I would say there is hope that there will be solutions that will allow air traffic to continue and a recovery from the situation will be made,“ Kallas said.


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