Airport, Estonia, Financial Services, Transport

International Internet Magazine. Baltic States news & analytics Wednesday, 22.10.2014, 06:08

Postimees: Estonian Air is running out of ready capital

Juhan Tere, BC, Tallinn, 09.07.2012.Print version
According to some sources available to the daily newspaper, Estonian Air will need a new cash injection at the end of 2012, unless coming months would bring any decisive changes to the airline’s financial results, writes LETA/Postimees.

Last year, the national carrier earned a total loss of 17 million euros. This year, the Estonian Government invested 15 million euros into the company, as it did last year. The enterprise as well as the Ministry of Economic Affairs and Communications are not prepared to disclose how much of this money has been sent during the first few months of the year.

 While Estonian Air has doubled its number of passengers, it has been unable to significantly reduce its costs. The costs have also grown because the airline has had to replace its fleet – the long-awaited Bombardier planes from Canada were not suited for the company.

 The significant loss earned was also the reason why minister of economic affairs Juhan Parts who represents the State – i.e. the owner of the aviation enterprise – replaced Joakim Helenius as the chairman of the company’s supervisory board and appointed his new advisor Erkki Raasuke on this position.

 Former CEO of Estonian Air Andrus Aljas stated that the objective set for the current management board of the airline is unrealistic. “Unfortunately, the reality in the aviation business is that it is impossible to expand quickly while earning a profit; I cannot bring any examples from the history where such a feat has been managed,” he explained.






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