MORE PLANES: The agreement to invest will expand Estonian Air’s operations.
TALLINN - The long-term aim of the 30 million euro investment the Estonian government decided to make in national carrier Estonian Air is to increase the company’s value, and to then transfer it back to private ownership again, reports National Broadcasting. Economy Ministry spokesperson Rasmus Ruuda said that the state plans to be an owner of Estonian Air as long as is necessary for the development of the company.
“In principle, it is possible to sell a percentage of the state’s stake to a financial investor; the company can be listed at the bourse, as well as a new strategic partner can be included. Today the company is not in a good enough state or attractive enough to include private investors,” said Ruuda.
Ruuda noted that the money the government invests now is considered a financing deal and that “the company should reach profit in 2-3 years.”
The airline is performing well as the economy rebounds. In October, Estonian Air carried 65,230 passengers, which is 32 percent more than at the same time last year, reports LETA. In the first ten months of 2011, Estonian Air carried 583,155 passengers. The total number of passengers increased 18 percent compared to last year.
“Estonian Air took initial steps to improve the connectivity and frequencies in September and we are pleased to see that the two last months were very good in terms of growth in passenger numbers. We added flight frequencies on the Oslo, Brussels, Moscow, Kiev, Amsterdam and Vilnius routes and changed our pricing structure with more attractive fares, which all have stimulated demand,” said Rauno Parras, Estonian Air commercial vice president. “This will give us confidence to roll out our new strategy and give even more positive news in the coming weeks,” added Parras.
The regularity of Estonian Air flights in the first ten months was 99.1 percent and the 15-minute punctuality was 90.8 percent. In October the regularity and the punctuality were 99.4 percent and 89.2 percent, respectively.
The government decided on Nov. 3 to invest 15 million euros in the share capital of Estonian Air this year and another 15 million euros next year, in order to implement the first stage of the new strategy of the company. The investment enables it to renew and increase the fleet of planes, recruit and train extra pilots and flight attendants, said the state chancellery.