Minister of Economic Affairs Taavi Aas concedes there is disunity within the government over what to do with coronavirus flight restrictions, as well as whether and to what extent troubled state-owned airline Nordica should continue to be supported.
The European Commission last month green-lighted a €30-million state bailout for Nordica in the wake of the coronavirus pandemic, which at one point in spring saw practically all its flights grounded.
Latvia recently closed down quarantine-free border crossings from Estonia after the latter's COVID-19 rate exceeded the 16 per 100,000 benchmark set by that country's health ministry for travel without the need to isolate on arrival. Estonia's benchmark is the same.
Currently, Aas' ministry says that direct flights to and from Tallinn can only connect with countries with a reported 14-day coronavirus rate no higher than 25 cases per 100,000 inhabitants. However, Aas says this figure is outdated, in an interview with ERR which follows.
The "Baltic bubble" [of free travel between the three Baltic States] has popped. Is it still sensible to keep the flight restrictions at Tallinn Airport now or could they be removed?
So far as this crisis goes, all restrictions must be looked from the perspective of due course. We can't even talk about any first or second wave, yet. We have already had three to four different situations since the spring.
Since the Baltic bubble no longer exists, these restrictions should be reviewed. The current regulations are out of date so a decision needs to be made whether to make flights free of these types of restrictions, or to introduce some other metrics.
When will the decision to remove or at least relax flight restrictions be made?
I would like this to come as soon as possible; we weren't able to reach an agreement withing the cabinet this week, but we will continue with talks next week.
Who inside the cabinet is opposed to lifting the restrictions?
Let's just say that some of the more conservative members are opposed to it; I would not specify more than that.
What about the departure of the Polish owners of Nordica subsidiary Regional Jet? [Polish airline LOT owns a 49 percent stake in Regional but is pulling out – ed.] How much money do they want for the transfer of their share.
It is clear that they are leaving, and we are negotiating conditions for this. We think that LOT owes us and the Poles think the opposite (the sums are reportedly the same for both parties though, at €2 million, though in summer Aas said that less than a million might be enough – ed.).
Is there a consensus among all three coalition parties to inject Nordica with €30 million? Erkki Urva, head of Nordica, has said this money will be used to continue current activities. Has anyone in the government demanded that routes from Tallinn be (re)opened?
Without these types of disputes, the matter would have been settled long ago.
There are hesitations on all sides of the government. Everyone wants to be sure that if that money is put in, the company will stay in operation. We have a party in government that remembers how it has done with previous airlines (referring to the 2015 bankruptcy of Estonian Air, Nordica's predecessor, after the European Commission declared a previous bailout to that airline constituted illegal state aid – ed.). The Ministry of Finance wants to make sure that this investment correctly placed, and I want to be sure of that [too].
Erkki Urva has also said that if this money is not forthcoming, bankruptcy will come knocking. What is the government taking into account regarding this?
We consider that this would be a final decision. If we do not decide to help, this airline will halt operations.
Should the Estonian state try to sell a profitable part of the company, one which has proper route contracts, to provide air services abroad?
I maintain that as a backup option, we still need our own airline. We do not know how other carriers will behave if Nordica disappears. [Latvian state-owned carrier] airBaltic would probably start transiting passengers via Riga, and not fly directly from Tallinn. And earning revenue via outsourcing (which is what Regional Jet does in, for instance, operating domestic flights in Sweden for other carriers – ed.) is very sensible; it's a relatively risk-free business, because the money comes to Xfly (another Nordica subsidiary, which recently announced it will be operating SAS flights between Tallinn and Stockholm – ed.) in any case through contracts, even when there are no passengers. Before the crisis struck, this business plan had been working well.
I would also agree with Erkki Urva when he says there is no point in making trips at any cost, because ticket prices are low and other airlines are flying from Tallinn at a loss at the moment.
Taavi Aas was talking to ERR's Indrek Kiisler.
Editor: Andrew Whyte