TALLINN - Several lawmakers from ruling parties have hinted that the time has come for the state to sell its remaining shares in Estonian Air, the national carrier, signaling a possible sell-off by the new center-right government in the coming months. The Economic Affairs and Communications Ministry, led by Juhan Parts, declined to comment on the possibility of selling the state's 34 percent stake in the airline, though the minister's spokesman told the Postimees daily that the issue was being considered.
Coalition lawmakers, however, admitted that the privatization idea was supported during coalition talks since, in their words, the state has little say in the day-to-day operations of Estonian Air.
Marko Mihkelson, an MP from the Pro Patria and Res Publica Union, told Postimees it was impossible to understand SAS's strategy and there was no way for the state to influence them.
Social Democratic MP Eiki Nestor said the state should continue owning the stake only if there were a strategic investment or a direct business interest. "I cannot see a reason why the state should be an owner of the company," he said.
The ministry is reportedly studying the sale option and is expected to issue a report soon.
In addition to the state's interest, Scandinavian-owned SAS possesses a 49 percent stake while Cresco, an investment bank, has 17 percent.
Existing shareholders have preemptive rights to any sale by another shareholder.
SAS officials confirmed they would be interested in acquiring the state's holding.
Hans Ollongren, head of public relations, told the Baltic News Service that if the government decided to sell, SAS would certainly be prepared to discuss it. "At the moment we must wait and see," he said.
Estonian Air has been performing sluggishly in recent years, with passengers complaining of flight delays and other inconveniences.
"Last year was difficult for the company, and 2006 ended with a loss caused mainly by considerably lower than expexted market growth, a series of technical problems and consequent extraordinary costs," Olev Schults, chairman of the supervisory board, said earlier this year.
Still, the airline increased passenger turnover 7.3 percent last year to 689,800. It maintains a 45 percent share at Tallinn International Airport and is in the middle of a fleet renewal plan that calls for phasing in more Boeing aircraft.
This year Estonian Air plans to introduce a route to Vienna and to restart the route to Hamburg. It also announced recently that it would acquire its 6th aircraft 's a Boeing 737-500 's in June.
