Estonia's national carrier, Estonian Air, signed a long-term cooperation agreement with SAS Dec. 2. On the basis of the contract, Estonian Air will from March 28, 1999 be a member of SAS' EuroBonus frequent flyer program and the airlines will start a code-share flight between Tallinn and the Scandinavian capitals. A code-share flight means that the clients of Estonian Air can fly with SAS and vice versa.
Estonian Air held talks with four groups dominating the European scene - One World Alliance, Swissair, KLM-Alitalia and Star Alliance - and settled on Star Alliance's SAS, finding it the best partner for co-operation.
But the partnership means that Estonian Air's cooperation with Finland's Finnair on the Tallinn-Helsinki line has to be discontinued from March 28 next year, when the contract ends. Finnair cooperates with British Airways, which belongs to One World Alliance, a competitor to Star Alliance.
The most notable benefit for the clients of Estonian Air will be the EuroBonus point system. This enables frequent flyers of Estonian Air to collect points on flights with Estonian Air as well as SAS and other EuroBonus partners, including Lufthansa, United Airlines, Thai Airways, Air Canada and Icelandair. From the points collected, a client can choose a premium flight from among all the flights offered by the EuroBonus partners.
As from March 28, Estonian Air and SAS aim to start code-share flights between Tallinn, Stockholm, Copenhagen and Oslo, which means greater flexibility and more flights between Tallinn and the Scandinavian capitals for the customers of both airlines.
The airlines would also coordinate their timetables to support transit traffic through Copenhagen, Oslo and Stockholm to the rest of the world and through Tallinn to the CIS and Baltic countries.
The cooperation agreement does not have any impact on Estonian Air ownership and management. Estonian Air, which belongs to the Estonian state (34 percent), Baltic Cresco Investment Group (17 percent) and a Danish private airline Maersk Air (49 percent), will remain independent and retain its identity as the national carrier of Estonia, says the Estonian Air press release.
SAS was also one of the candidates in the privatization of the Estonian airline company in 1996, but lost the deal to Maersk Air. SAS and Estonian Air were also competitors in the past. Now they can arrange a more reasonable timetable, having flights at different times during the day.
Estonian Air operates with two Fokker 50 and three Boeing 737-500 aircraft to 13 destinations: Helsinki, Stockholm, Oslo, Copenhagen, London, Amsterdam, Hamburg, Frankfurt, Kiev, Moscow, Minsk, Vilnius and Riga.
The company received a 516 million kroon ($37.8 million) turnover last year, which is 152 million kroons more than the year before. The company's loss for 1997 was 56 million kroons, 30 million kroons less than it lost the previous year. According to Olev Schults from Cresco Investmets, the company had planned to profit in the fourth year after the privatization. In 1997 the company served 281,000 passengers and had 380 employees.