A patriotic duty to buy plane tickets? Don’t be absurd (13)

(Siim Lõvi /ERR)
By Dario Cavegn
2/15/2016 12:28 PM
Category: Opinion

The management of the Nordic Aviation Group asked Estonians more than once to support their new national airline company by flying with it. As it is, not even pilots want to do that - not for the money they’re offered, not under these conditions, and not for the people that have found a comfortable way to turn the collapse of Estonian Air into a business.

Three independent sources tell a story that goes roughly like this:

They speculate that in August 2015, Märten Vaikmaa and Tõnis Lepp set out to make the most of the impending collapse of Estonian Air. Mr. Vaikmaa at this point was the majority stakeholder in the Nordic Aviation Academy (NAA), Mr. Lepp’s Hiiumaa Lennukompanii owned the rest of the shares.

The same sources also speculate that Mr. Vaikmaa knew what was coming, and about the plans for the ailing airline the government had in the works. He was a member of Estonian Air’s supervisory board at the time, hence the assumption that he knew that after the grounding of the national carrier, only the Bombardier CRJ aircraft would be left.

Their guess is that as Estonian Air’s successor began to take shape, Mr. Vaikmaa and Mr. Lepp saw an opportunity to set themselves up as irresistible business partners for the new company.

Like Estonian Air had done, the new company would employ a pay-to-fly scheme. It would also outsource its crew to be flexible enough to grow in phases of different intensity. This meant that whoever would employ the pilots would also need to make sure that the necessary training was available.

Some of this is more than speculation and can actually be confirmed. The Nordic Aviation Academy quietly applied for a training license for the Bombardier planes. Mr. Lepp set up a new subsidiary for his Hiiumaa Lennukompanii, called Nordic Crew Management. The future crew outsourcing partner of the Nordic Aviation Group was entered into the commercial register on 28 September 2015.

On 9 October, Estonian Air’s successor, the Nordic Aviation Group, was created. Just a few weeks later, on 26 October, the Nordic Aviation Academy got the training license for the Bombardier CRJ jets. This information is publicly accessible and available on the website of the Estonian Civil Aviation Authority.

On 8 November, Estonian Air ceased its operations. According to several sources, Mr. Lepp began contacting the defunct airline’s pilots, offering them to work for Nordic Crew Management.

On 10 November, Mr. Lepp’s Hiiumaa Lennukompanii bought Mr. Vaikmaa’s shares in the Nordic Aviation Academy. This, the sources say, broke the link between Estonian Air’s supervisory board and the Nordic Aviation Academy. What is clear is that Hiiumaa Lennukompanii now owned two subsidiaries that could work together to make the new state-owned Nordic Aviation Group a very good offer.

Nordic Crew Management provided the crews the NAG needed. It did so building on the same employment schemes Estonian Air had used. At the same time, it worked with the Nordic Aviation Academy to provide the type rating training the pilots needed for the Bombardier CRJ jet, and as such emerged as the only business in Estonia able to offer this complete package.

End of story.

Legal, but sleazy. And as long as outsourcing staff remains a priority for the Nordic Aviation Group, having a business partner able to provide such a nicely rounded off deal is a dream come true and every bit in their interest to run the new airline as efficiently as possible.

If it weren’t for the fact that there could have been a competitor, and that it was left out. And the fact that it wasn’t private capital, but the state that equipped the NAG with €40.7m.

There’s the state-owned Estonian Aviation Academy in Tartu, not to be confused with the NAA mentioned above. For them, setting up a type rating course really wouldn’t have been all that difficult.

It wouldn’t have been expensive either. The application fee amounts to a few hundred euros, the only added cost is the composition of the school’s own training manual. The course then follows.

In other words, the Estonian Aviation Academy in Tartu could likely have introduced the same kind of training the NAA now offers.

Why this matters? Simple. The government sank €40.7m into the Nordic Aviation Group, and part of this taxpayers' money is now spent on the services of Nordic Crew Management and the Nordic Aviation Academy. It moves on to private businessmen where part of it could have gone back to a state-owned company.

This is a liberal economy, and that’s a good thing. But state money is still state money. Even though there might not have been the legal necessity to do it, it would have left a better impression if the government had made sure the local pilots remained employed, and the state-owned flight academy had business.

But of the roughly 50 remaining local pilots that are qualified to fly the Bombardier CRJ jet, just 18 work for Nordic Crew Management. Former Estonian Air pilots said to ERR that twice as many would be happy to fly even for today's lower pay - if it weren’t for Hiiumaa Lennukompanii’s two subsidiaries, and behind them, for Tõnis Lepp.

To sum up: legal or not, it was likely insider information led to a situation where a private company was given preference over a state institution that could easily have qualified to offer the same service.

Taxpayers’ money invested in a state enterprise going to private businesses where a state-owned flight school could have competed. A whole profession without bargaining power, and safety concerns that go as unheard now as they did in the times of Estonian Air.

And all the while, the Estonian taxpayer is told to support their new national airline and fly with the NAG. No wonder the pilots complain and criticise.

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