New conditions of Kuressaare air tender oust Nordica
The Road Administration has removed age of aircraft from conditions for the new Saaremaa air connection tender, to the vexation of Nordica subsidiary Regional Jet. Its newer but more expensive planes could be left out, while the new conditions suit Lithuanian competitor Transaviabaltica.
To once again understand the Kuressaare air tender, we need to go back to its failed predecessor.
The previous tender was won by Nordica (link in Estonian) subsidiary Regional Jet. This despite the fact they offered a 72-seater instead of the required 40-seat aircraft and wanted 30 percent more than the state was willing to pay for each flight.
Because 30 percent of the outcome of the tender depended on the age of aircraft, Transaviabaltica lost, despite offering lower prices. Their plane from 1992 simply couldn't compete with Regional Jet's aircraft that were just seven years old. Nevertheless, a contract was not signed with the latter.
Lawyers wanted the age criterion removed
Director of Transport of the Road Administration Meelis Telliskivi says that age of aircraft will no longer matter in the new tender.
"Figuratively speaking, participants with brand new planes could greatly hike prices, while others sporting older aircraft… In short, it is a mathematical nuance. We discussed it with many different sides and finally decided to stick with the price criterion to make matters simpler."
Similar tenders abroad include the age of aircraft in their conditions, making it pointless to offer flying machines over a certain age.
"We desperately wanted to include it, but different lawyers told us the tender would be null and void in that case. Anyone contesting the tender would result in it getting delayed once more. And we do not want the tender to end up being dragged through legal corridors like it did last time," Telliskivi said.
Conditions suit Transaviabaltica
Therefore, the age of aircraft will not matter in the new tender. Meelis Telliskivi says that it is of no significance technically and in terms of safety as most components of aircraft, down to the engines, are replaced over time.
Representative of Transaviabaltica in Estonia Rene Must adds that the difference is down to aesthetics and user experience. "A modern aircraft has a nicer interior, more comfortable seats," he says.
Must couldn't say whether Transaviabaltica will go after the Kuressaare contract but added that there are relatively few 40-seater aircraft in the region. The Lithuanians have them.
Nordica: do you expect us to buy old junk?
Nordica subsidiary Regional Jet has larger planes; however, the company looks to have no business with the Kuressaare tender now that age of aircraft has become a non-issue. The previous tender showed that Transaviabaltica can charge a lower price.
This is not to the liking of Nordica CEO Erki Urva.
"Of course, it is possible to cooperate and find old junk somewhere in Scandinavia to offer the service with. But we are not sure we want to waste our energy on something like that," Urva said.
40 seats requirement to be retained
A third company called Nyxair has expressed an interest in the Saaremaa connection, while their planes only fit 33 passengers. Even though Nyxair CEO Jaanus Ojamets has repeatedly tried to persuade the Road Administration to bring down the capacity criterion, Meelis Telliskivi believes 40 seats to be the minimum.
"In addition to the locals, Saaremaa is quite a major tourist destination, and because coaches fit 40 people and more today, we want to avoid a situation where we would need still other modes of transport between the two," he said.
It looks, then, that Transaviabaltica would be sure to win the four-year Kuressaare contract and for a good amount as competition seems to be in short supply.
Another condition changed
Meelis Telliskivi believes competition will be closer than that. "I very much hope we will see four or five companies come up with bids."
Telliskivi draws on another change in the tender conditions as bidders had to produce specific planes and their replacements last time. There is no such requirement now, as long as the aircraft is regulation.
"Because a lot of companies rotate aircraft, they cannot ensure a plane carrying the same side number will be servicing a specific connection all the time."
This final change could also lure larger airlines to Kuressaare.
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Editor: Marcus Turovski