Tuesday, June 30, 2009

Estonian Air Net Loss more than tripled in 2008

Estonian Air net loss more than tripled in 2008 compared to the previous year and reached EEK170.5 million (EEK52 million in 2007).

Revenues increased by 6% to EEK1.46 billion but fuel prices and lower demand, together with bad manegement and strategy, contributed to that loss.

The national carrier has not been profitable since 2006 and set up a cost cutting plan while offering more destinations within Europe.

New flights from Tallinn to St Petersbourg and from Tartu to Stockholm are already scheduled. Estonian Air also profited from the departures of KLM and Easyjet (still flying to London) to relaunch the lines to Amsterdam and Berlin.

Estonian Air today offers 22 destinations in Europe with 6 aircrafts. 2 Boeing bought in the 90s were given away and had to be replaced by 3 Bombardier CRJ900 with 90 seats. However, the delivery is late. These new planes would allow to launch new lines to Zurich and Dusseldorf and fly more frequently to Brussels, Moscow and Paris.

The company is still looking for a big partner to survive. Indeed, since the Estonian governement refused to see its 34% shares in the company to SAS (49%), the Scandinavian group decided to get rid of its parts to refocus on the Nordic market. Investment bank Cresco owns the remaining 17%.

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