Estonian Air's Losses at Halfway Mark Bigger than Expected
Estonian Air's CEO says that the company's losses in the first half of 2012 were bigger than expected but maintains that the national carrier is not in a crisis.
Six months after the company posted a historic loss for 2011 of more than 17 million euros, supervisory board members said they are not pleased with the preliminary results in what was supposed to be a turnaround year, and in late June Erkki Raasuke replaced Joakim Helenius as chairman - to better monitor compliance with the company's new strategy, said the company.
In an interview with Eesti Päevaleht published on July 5, CEO Tero Taskila said he would not provide the exact figures. "We won't state them publicly, and as always, the actual performance this year will emerge at year's end. But I will say again that Estonian Air is not in crisis."
He said one reason for the losses was the weaker euro rate against the dollar, the currency in which most fuel prices are quoted. The carrier has also replaced much of its fleet - although an escalating legal dispute with the Bombardier aviation contractor is not taking a financial toll, at least not yet, said Taskila - and retrained its personnel in line with the new strategy. A third reason offered by Taskila was that the carrier has not succeeded in cutting costs fast enough.
"I will say, though, that the current plan has not changed. We promised to bring the company into the black in three years and now we have two months to keep our promise. For the time being, work will go on as before."
He noted that the final months of the year were traditionally the most lucrative ones for Estonian Air.
Taskila, brought on a year ago to introduce a "quick and innovative" strategy, has made various statements on the timeframe for profitability, including saying that he hoped for a small profit by 2012.
Kristopher Rikken