Hanschmidt: Estonian Air Will Hopefully Return to Profit by 2016 (1)

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11/3/2014 4:40 PM
Category: Economy

Infortar Group, which owns the shipping company Tallink, will buy 2.7 percent of Estonian Air from Scandinavian Airlines this week, but it has already expressed interest in becoming the sole owner of the national carrier by purchasing the remaining 97 percent from the state.

The majority owner of Tallink intends to create a synergy between the two companies and make the airline profitable again by 2016, reported ETV's "Aktuaalne Kaamera".

Minister of Economic Affairs Urve Palo said the state has been looking for a private investor for four to five years, who would help to give a positive spin to Estonian Air's business plan.

Ain Hanschmidt, the President of the Board of Infortar, said that the investment company also owns hotels and taxi companies. "We are the majority shareholder of Tallink, owning 36 percent of Tallink Group. We saw that there is room for great synergy and our group should be able to return Estonian Air to profit."

There is still one obstacle before the new union can be born: the European Committee is yet to decide whether the 25-million-euro state aid to the national airline was legal or not. There is a distinct chance that including a private investor will make a positive difference to Estonia's attempts in saving the airline.

Former European Commissioner for Transport Siim Kallas said that the state aid question will be discussed with an eye to the future. "If there is a slightest change for a future, they will be as positive about it as they possibly can."

However, the new suitor has said it will not hear of the obligations taken on by the past owners.

"Our condition is that we invest in Estonian Air. This means that we will invest in the future. We will not cover for debts, loans, losses, and past mistakes. We must get a zero balance company, a clean slate," Hanschmidt said.

Hanschmitt will not say how much Infortar is ready to invest before the coming summer season. And it will not be until the next stage of the deal that the new owner will decide the purchase of new planes.

Hanschmidt did say that Estonian Air will not become a cheap airline. "Our current strategy foresees that Estonian Air will specialize and become a regional carrier, offering flights to connecting hubs; that is, if someone wants to travel to the States, we will fly him to Stockholm or Copenhagen that are close by."


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