Toomas Peterson who is former CEO of Estonian Air writes in Äripäev that now is the time to replace the troubled Estonian Air with an entirely new budget airline.
“For Estonian Air, horrible end would be better than endless horror. I suggest to set up an entirely new airline,” said Peterson.
He added that such a budget airline would operate 5 to 6 aircraft of the same type and fly to about ten Europe’s most important urban centres on a daily basis.
“The state could hold a golden share which could be a third of the airline, while a core investor and a strategic partner would have another third and the rest could be sold to Estonians, for instance, by public offering of shares,” he wrote.
According to Peterson, such ownership structure was guarantee stable and daily air connections to Europe’s most important centres, certain level of public control and, what’s most important, the interest and motivation of Estonians themselves to fly with their own airline.
The initial investment could be around EUR 50m which should be enough to cover the costs of the first six months of operations.
Closer destinations such as Helsinki, Riga, Vilnius and St. Petersburg could be operated by a company set up on the basis of Regional Estonian Air that is using turboprop aircraft.
According to Peterson, since 2009, Estonian Air has received EUR 57m in capital injections and another EUR 25m in short-term loans, totalling 82m euros.
At the same time the government has informed the European Commission of only one loan in the amount of EUR 8.3m.
“The rhetorical question is whether we should still try to breathe life into this dying horse,” he asks.
Toomas Hõbemägi
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