Estonian Air to cease operating November 8th

Estonian Air, which runs a fleet of aircraft comprising three Bombardier CRJ900s, two CRJ700s and a single Embraer 170 will unsurprisingly cease operating on the 8th November in accordance with a European Commission (EC) ruling which stated that “Following an in-depth investigation, the European Commission has concluded that aid measures by Estonia in favor of national flag carrier Estonian Air gave the company an undue advantage over its competitors in breach of EU state aid rules.
“Estonian Air therefore needs to pay back the state aid already received, which according to the Commission’s information amounts to about €85 million plus interest, and cannot receive an additional €40 million of restructuring aid.
“Companies should compete based on a sustainable business model rather than relying on continued support by the State to stay in the market,” said Commissioner Margrethe Vestager, who handles competition policy.
“Estonian Air has repeatedly received public subsidies over the past five years but did not carry out the necessary restructuring to become viable as a business. It would not be a good use of taxpayer money to keep Estonian Air in the market artificially—nor would it be fair to competitors, which have to compete without such support.”
The airline’s management board issued a brief statement saying that it had decided to cease operations because of the EC decision which also requested the paying back of €85 million (US$93 million) received in state aid. It is also believed the Estonian government, which was a 97.34% stakeholder in the airline will likely and rapidly create a new airline.
airBaltic, the national carrier of neighboring Latvia, has already indicated it would provide more flights from the Estonian capital, Tallinn, under its Horizon 2021 expansion scheme which it had announced earlier this year. The Latvian carrier is also going through major changes, having revealed on Nov. 6th that a German private investor is acquiring a 20% stake in it.