Tallink CEO: Tallink alone cannot subsidize Estonian export

Tallink CEO Paavo Nõgene.
Tallink CEO Paavo Nõgene. Source: ERR

Entrepreneurs are blaming Tallink for a sudden hike in export prices and have said they deal a blow to industries across Estonia. Tallink Group CEO Paavo Nõgene said the price increase is temporary and due to travel restrictions as the shipping line has to stay afloat.

The Association of Construction Material Producers of Estonia (EETL) sent a letter to Prime Minister Jüri Ratas (Center), Minister of Economic Affairs and Communications Taavi Aas (Center), which said Tallink has drastically increased transit fees on the Finland and Sweden routes on short notice.

data from the Estonian Logistics & Freight Forwarding Association, the prices were increased by some 50 percent.

Tallink Group CEO Paavo Nõgene told Vikerraadio's morning program "Vikerhommik" that prices did increase on October 1, but the hike stems from travel restrictions and are not higher than prices were the year before, when export was booming.

Nõgene said reasons for the price increase should be found from missing links between Tallink and other companies. "If anyone feels their transit fees have gone higher than last year's average, then we can certainly help if they publish their current transit fees," the Tallink boss said.

He added that prices increased on October 1, because Finland banned all tourism. "Since we have hybrid ships, passenger ferries for up to 2,800 travelers, with 100-200 using them daily now, along with cargo and vehicle decks, then that inevitably leads to two choices: you either stop operations or fix prices in a way that keeps you alive," Nõgene said.

He added that until Finnish institution Traficom (a road administration institution - ed.) conducts a procurement for regular services, Tallink is forced to keep prices at a higher level.

Nõgene said the price hike will help Tallink stay afloat during the crisis. "If a large part of our income is lost - 85-90 percent depending on the month - to handle such a capital-heavy vehicle such as a ship, we have to cover those expenses somehow. It is clear that we are operating in a loss currently and it is also clear that Tallink alone can not subsidize Estonian export."

The company's goal is to keep cargo lines open. Nõgene said that until travel restrictions are in place and Tallink has no chance to take passengers, or until the regular line procurement in Finland is conducted, Tallink can not lower prices.

If Tallink is not chosen in Traficom's procurement, the company can not go on operating all vessels, the CEO concluded.


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Editor: Kristjan Kallaste

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