Minister: Estonian Air is one of government's main concerns this year

Photo: Reporter.ee

Air connections are worth a lot and Estonian Air will be one of the biggest concerns for the Estonian government this year, Finance Minister Jürgen Ligi said on Wedensday.

"Decisions that were grossly wrong have been made at the company and strike threats have eroded the trust of customers and creditors. That means sales figures that are falling like a rock and demands of advance payment," Ligi told BNS in an interview.

"Estonian Air has received state aid repeatedly, yet it is known that in aviation such support has been reclaimed on many occasions. A company spending state aid that is under threats of fine and strike has no value -- that still has to be created for it, and one is busy doing it," said the minister of finance.

The government last Thursday began a review of the restructuring plan of Estonian Air that the state-owned airline's management board presented to the supervisory board.

"The new plan concentrates on balancing the company and servicing a network of ten destinations with strong demand," CEO Jan Palmer said last week.

Estonian Air's summer flight plan includes the following destinations: Stockholm, Copenhagen, Amsterdam, Oslo, Moscow, St. Petersburg, Kiev, Vilnius and Trondheim, and flights to Nice and Paris during high season.

Besides Estonian Air is in talks to service the connections of other airlines using its aircraft. "We will downsize the company's costs to a level consistent with the new business volumes," he CEO added.

In mid-December the government decided to provide 8.3 million euros from the Property Reform Reserve as a loan to Estonian Air. In December the government paid out the first instalment of 793,000 euros and in mid-January the second instalment of three million euros.