Estonian Air cries foul over AirBaltic expansion (4)

(Postimees/Scanpix)
4/1/2015 12:31 PM
Category: Economy

State-owned airline Estonian Air has questioned AirBaltic's decision to open routes from Tallinn to Berlin and Vienna, saying the company should not be allowed to expand as it received state aid.

The Riga-based AirBaltic was bailed out by the Latvian government and according Estonian Air CEO Jan Palmer, the restructuring agreement between AirBaltic and the Latvian government does not allow the company to expand in such a manner.

Estonian Air itself was subject to a bail-out by the government and said the restructuring plan it sent to the European Commission for approval does not allow the company to compete with other airlines as it will have then used state aid for expansion, not restructuring.

Palmer said AirBaltic probably has a similar restructuring plan and are subject to similar limitations. He added that it will be very difficult for two companies to make profit from the same route.

Janis Vanags, of AirBaltic, said there are limits to expansion, but they do not apply to Tallinn.

Estonian Air is yet to receive approval for its plan, AirBaltic received approval last year.

Estonian Air flies to Berlin and Vienna three times per week, AirBaltci will fly four times per week on both routes from May to October.

J.M. Laats

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