The airline reported a €49 million loss in the first nine months of 2024, at a time when one in four passengers passing through Tallinn Airport travels via airBaltic.

Kukemelk noted that while Estonia should remain grateful for airBaltic's operations here, the airline poses a significant risk to the country.

Despite reporting a €40.3 million profit in the third quarter of 2024, airBaltic reported a €48.5 million loss for the first nine months as a whole.

In 2023, the airline reported €34 million in profits, but incurred a €54 million loss the previous year.

Kukemelk said: "If airBaltic requires additional capital, Latvian taxpayers may come to question why their money is invested in the airline, especially as flights also operate from Estonia, Lithuania, and Finland."

He estimated that the probability of airBaltic's business plan failing lies as high as between 40 and 50 percent.

"It is unwise to ignore hard figures like revenue and profit for too long. If airBaltic cuts its flights from Tallinn, it is unclear what the state's next plan would be," Kukemelk added.

Deputy Secretary General for Mobility at the Ministry of Climate, Sander Salmu, acknowledged the significant impact on connections with Riga and Vilnius should airBaltic scale down its Tallinn operations, but noted that other airlines would likely take over a large proportion of the other routes.

He said: "Currently, there's no indication of a move of that kind, but the airport is monitoring the situation, tracking business and tourist destinations. Continuous efforts ensure these connections remain available."

Salmu said that the state ensures flight connections primarily via Tallinn Airport, setting expectations for it to maintain and increase air traffic efficiently and profitably.

He added that the transport development plan has put in place a baseline level for flight connections, which the state implements through the airport.

Kukemelk, meanwhile, said: "The airport should be supported with infrastructure and competitive rates, but it's essential to find marketing measures for needed routes,"

Kukemelk added that the state should rather focus more on supporting specific essential routes, than solely relying on the airport for connections.

Void left by exit of Nordica

Estonian state-owned airline Nordica declared bankruptcy late last year.
That carrier was created in 2015 to secure key destinations for Estonia, after its forebear, Estonian Air, wound up its operations.

At its peak, Nordica held almost a 40 percent market share at Tallinn Airport.
ETV current affairs show "AK.Nädal" provided an overview of Nordica's journey.

Kati Kõrbe, an associate professor of logistics, told the show Nordica's bankruptcy, while it may have been an emotional issue for passengers, was not anything dire in air traffic terms, noting Tallinn Airport's recent growth following the coronavirus pandemic.

Kõrbe said: "In December, Tallinn Airport set a record in passenger growth, surpassing 20 percent in some months. By 2030, passenger numbers could rise to 4-5 million."

Whereas Estonia once relied on Estonian Air, then Nordica, it now depends on airBaltic, as noted with one in four passengers traveling via the airline.
Kukemelk suggested that Estonia could ameliorate the situation by boosting its presence in markets like Germany, benefiting business travelers with more links to Hamburg, Berlin, and Copenhagen.

Another option is additional route tenders, such as Tartu-Helsinki, where the city of Tartu is subsidizing Finnair to the tune of €3.2 million over a four-year period.

Kukemelk proposed creating a marketing fund to shore up key routes.
Such a fund, he said, could offer marketing support for airlines and could promote Estonia as a destination.

He suggested providing up to €1 million in support to airlines with year-round flights to key German destinations.

The state should also develop measures to prepare for scenarios where reliance on airBaltic is reduced.

"Lithuania's response to FlyLAL's bankruptcy in 2009 provides a good example. Slovenia also struggled when Adria Airways ceased operations in 2019," Kukemelk noted.

Salmu confirmed that Tallinn Airport already has a marketing fund, supporting new routes or maintaining existing ones via a €4-€5 million annual budget.
The state, it is argued, helps keep Tallinn Airport's fees competitive in comparison with other regional airports, covering security, rescue, and environmental costs.

Last November, Minister of Infrastructure Vladimir Svet (SDE) signed an agreement to invest €14.4 million to improve the energy efficiency of Tallinn Airport and its regional subsidiaries, with €9.3 million going to Tallinn alone.

The reconstruction is funded by CO2 emission trading and will be completed from 2024-2027.

Additionally, Tallinn Airport is working with Visit Estonia to promote both the airport itself, and Estonia as a destination.

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