The Estonian national carrier Estonian Air has expressed dissatisfaction that the Latvian airline airBaltic has started running flights from Tallinn to Berlin and Vienna. They say that because AirBaltic has received assistance from the Latvian state, and that this was accompanied by expansion restrictions, they should not be able to compete with Estonian Air, ETV reports.
Estonian Air is still waiting for a response from the European Commission on whether the cash injections made to enable the company to survive were allowed or are illegal state aid.
The company's restructuring plan has been sent to Brussels, which Estonian Air says sets clear limitations on their activities, to make sure that they are not competing with other companies with the support of the state.
While Estonia is still waiting for a response from Brussels, airBaltic received theirs last year. The decision was positive. Estonian Air manager Jan Palmer questions, however, why airBaltic has opened routes from Tallinn to Vienna and Berlin.
"One of the things that we had to guarantee was that we didn’t expand our business. We should turn round our company and make it sustainable, but we are not allowed to start new routes and especially competing with other airlines. Most likely airBaltic must have the same kind of restructuring plan, where they also should be restricted in the way they do their restructuring," says Palmer.
AirBaltic confirmed that the decision on state aid was accompanied by restrictions, but that these do not affect the services from Tallinn.
"We as an airline are not allowed to grow. Therefore, we are opening these new lines only within the limits which we are allowed to operate under. We have closed a number of routes where we have been forced to do that due to changes in the market," explained airBaltic's Janis Vanags.
Palmér claims that the two airlines cannot make a profit by competing on the Tallinn-Vienna and Tallinn-Berlin routes., and thinks that the main reason for airBaltic's actions is to apply pressure on Estonian Air. AirBaltic, however, insist that they are focusing on profit, not on putting pressure on anyone else.