September 2022, Virtual
September 29 2022, Virtual
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Estonian Air has stopped operating after €85 million in state aid to the airline was ruled illegal by the European Commission.
The carrier, based in the Estonian capital Tallinn, grounded flights on Sunday (November 8) following the EC decision that the Estonian government should recover the state funding it has given to Estonian Air.
The EC verdict on Saturday came after a three-year investigation into the deal which the commission said gave the airline “an unfair advantage” over its competitors.
Commissioner Margrethe Vestager, who is in charge of EC competition policy, said: "Companies should compete based on a sustainable business model rather than relying on continued support by the state to stay in the market.
“Estonian Air has repeatedly received public subsidies over the past five years but did not carry out the necessary restructuring to become viable as a business. It would not be a good use of taxpayer money to keep Estonian Air in the market artificially – nor would it be fair to competitors, which have to compete without such support."
Estonian Air said it would be working with other carriers to arrange alternative flights for passengers due to travel up to November 11, and refunds would be given to those with bookings from November 12 onwards.
The Estonian government has already set up Nordic Aviation Group (NA) as a replacement service for Estonian Air with flights from Tallinn to eight destinations using five different airlines, as well as Adria Airways’ ticket system and operating certificate.
Estonian Air had flown to destinations such as Brussels, Copenhagen, Oslo, Kiev and Amsterdam.
“The current situation is an interim stage. We are working at creating a new Estonian airline and will gradually move to our own branding, product design, services and aircraft, develop a network of routes oriented to Estonian population,” said NA in a statement.