newstodate.aero
Jan 17, 2013 (newstodate): Who is to blame for the plights of Estonian Air that currently hinges its survival on EU approval of a state loan to ward off the imminent problems?
Formerly, the blame has been on mistaken strategies under former CEOs, but a new understanding seems now to be emerging: the sheer size of the home market for an airline like Estonian Air does not provide anything like the critical mass required to become profitable.
According to an Estonian media reporting on Estonian parliamentary discussions, the country's prime minister voiced a deeper thought on the issue:
-Estonian Air has never been a company that earned a proper profit. Is has been rescued with different capital injections and loans during its whole existence. There has always been problems, and the cause of the problem has been the smallness of our state, Mr Andrus Ansip reportedly told members of the Estonian Parliament.
Estonian Air's former CEO Tero Taskila took office on June 1, 2011, but was replaced on November 1, 2012, by Jan Palmer who brings in abundant experience from recent airline bankruptcies including the Danish carrier Cimber Sterling and the Swedish Skyways.
Mr Palmer has taken with him as consultants his former management partner in Skyways, Mikael Wangdahl as well as a senior aviation specialist Kjell Fredheim, who was earlier in the top management of SAS.
Estonia has a population of 1.29 mio inhabitants, being the smallest country in the Baltic region.
By comparison, neighboring state Latvia has a population of 2,1 mio people, home also to its national carrier airBaltic that has established Riga Airport as the successful main hub in the region.
Finally, Lithuania has a population of three mio people - but saw its national carrier going bust by early 2009.
Visions of a Pan-Baltic carrier have long been nurtured, but so far without any results despite the obvious logic.
Formerly, the blame has been on mistaken strategies under former CEOs, but a new understanding seems now to be emerging: the sheer size of the home market for an airline like Estonian Air does not provide anything like the critical mass required to become profitable.
According to an Estonian media reporting on Estonian parliamentary discussions, the country's prime minister voiced a deeper thought on the issue:
-Estonian Air has never been a company that earned a proper profit. Is has been rescued with different capital injections and loans during its whole existence. There has always been problems, and the cause of the problem has been the smallness of our state, Mr Andrus Ansip reportedly told members of the Estonian Parliament.
Estonian Air's former CEO Tero Taskila took office on June 1, 2011, but was replaced on November 1, 2012, by Jan Palmer who brings in abundant experience from recent airline bankruptcies including the Danish carrier Cimber Sterling and the Swedish Skyways.
Mr Palmer has taken with him as consultants his former management partner in Skyways, Mikael Wangdahl as well as a senior aviation specialist Kjell Fredheim, who was earlier in the top management of SAS.
Estonia has a population of 1.29 mio inhabitants, being the smallest country in the Baltic region.
By comparison, neighboring state Latvia has a population of 2,1 mio people, home also to its national carrier airBaltic that has established Riga Airport as the successful main hub in the region.
Finally, Lithuania has a population of three mio people - but saw its national carrier going bust by early 2009.
Visions of a Pan-Baltic carrier have long been nurtured, but so far without any results despite the obvious logic.