Ferry lines eligible for up to €20 million aid from Estonian state ({{contentCtrl.commentsTotal}})

Tallink ferry.
Tallink ferry. Source: Siim Lõvi/ERR

Shipping lines and their Estonian-registered subsidiaries can apply for European Commission-approved state aid to the tune of €20 million, to help mitigate the effects of the coronavirus pandemic which saw passenger routes grind to a halt for several weeks in March to May.

The aid will constitute state aid in the European Commission's understanding.

Taivo Linnamägi, head of the aviation and maritime department at the Ministry of Economic Affairs and Communications, told ERR Friday that the support is aimed at compensating firms hit by the coronavirus pandemic.

"The maritime sector has been one of the hardest-hit victims; they could not carry out normal business due to the evaporation of passengers and imposition of national restrictions. To help resolve this, the government has chosen to allocate an additional €20 million to cover losses," said Linnamägi.

The aid is on top of the government's wage compensation scheme which, for instance, Estonian shipping line Tallink took advantage of once it was issued in April. Tallink also received a €102-million loan from state agency KredEx.

Linnamägi added that as an additional measure, waterway charges have also been abolished until March next year.

Tallink announced yesterday that the company's turnover decreased by 75 percent compared to the second quarter of 2019, with a net loss of €27.4 million over the same time frame. 

Tallink reported a net profit of €14.9 million in the second quarter of 2019.

Inno Borodenko, CEO of OÜ Viking Line, the Estonian subsidiary of Scandinavian-owned Viking, told ERR that there had been no surprises in her company's financial results, though did not quote figures.

"We are in the same economic situation as Tallink; we have the same passengers and experienced the same virus," Borodenko said, adding that Viking certainly intends to apply for the €20-million aid.

The company's losses are likely to exceed this

The aid is likely to be doled out proportionately, Linnamägi said, with companies compensated at 80 percent of losses following negotiations with the European Commission.

Viking is also in talks with the governments of Finland and Sweden, with the chance of getting subsidies from these too, Inno Borodenko said.

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Editor: Andrew Whyte

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