Tallinn Airport requests further €20 million for cargo hub investment plans
Tallinn Airport has requested an additional €20 million from the state. The airport wants to expand its facilities, particularly for cargo planes and aircraft maintenance. Economics affairs minister Taavi Aas (Center) hinted that the money might be forthcoming.
Work on the development, at the southern part of the airport's territory, has already started, and would see Tallinn increase its competitiveness as a cargo destination, relative to Riga and Vilnius airports, whose greater focus is on passengers.
Riga Airport in particular is a considerably larger passenger hub than Tallinn, as is Helsinki's Vantaa Airport.
The €20 million would be raised via share capital, which the government is set to boost to over €46 million, in a move aimed at bolstering Tallinn Airport's creditworthiness.
Riivo Tuvike, Tallinn Airport board chair, told ERR that the total investment comes to €37 million.
"To carry out this investment, we need to use self-financing, which is partly due to this share capital aspect," Tuvike said.
"We would like to borrow a minimum of €17 million, most likely more, but we are partly financing things with a loan, partly from equity," Tuvike went on.
The airport's profits have fallen by around €30 million due to the slow-down in the aviation sector, mostly arising from the coronavirus pandemic.
Economic affairs minister Taavi Aas (Center) told ERR that as this was a forward-looking investment, an agreement was likely soon be reached with the Ministry of Finance.
Aas said: "I believe that in fact we are relatively close to this. Not all [state credit agency] KredEx funds were used; this money was put in reserve and it is possible to carry out a share capital contribution from that."
The breakdown of the planned investments would see €7.3 million for the extension and €12.7 million for the buildings, which would be leased to Estonian aircraft maintenance firm Magnetic MRO.
"We want to expand cargo aviation. Estonia is in a good geographical position, we have the opportunity to develop cargo flights," Riivo Tuvike said of the rationale behind the investment.
"The other aspect is the aircraft maintenance business, which is perhaps even more attractive to the Estonian economy, as well-paying jobs are there," Tuvike went on.
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Editor: Andrew Whyte