newstodate.aero
Feb 21, 2013 (newstodate): The EU Commission is expressing doubts over a number of public support measures for Estonian Air granted by the Estonian state.
An in-depth investigation has thus now been opened, giving interested third-parties an opportunity to comment on the measures under assessment.
In December 2012, Estonia notified to the Commission its plan to grant a rescue loan of 8.3 mio euro to Estonian Air.
The Commission has doubts that the rescue loan for Estonian Air is in line with the provisions of the EU guidelines on aid for the rescue and restructuring of companies.
According to these rules, companies in difficulty can receive rescue aid only once over a period of ten years, according to the so-called "one time last time" principle.
However, Estonian Air already benefited from three capital injections in 2009, 2010, and in 2011-2012, respectively, and these measures were not notified to the Commission.
While private shareholders participated in the 2009 and 2010 capital injections, the 2011-2012 injection was carried out exclusively by the State.
Moreover, the sale in 2009 of Estonian Air's ground handling business to the State-owned Tallinn Airport may have involved state aid to Estonian Air, says the Commission.
Should the Commission rule against Estonian Air, the carrier would have to repay the capital injections - in itself bringing it across the brink of bankruptcy if that had not already occurred.
An in-depth investigation has thus now been opened, giving interested third-parties an opportunity to comment on the measures under assessment.
In December 2012, Estonia notified to the Commission its plan to grant a rescue loan of 8.3 mio euro to Estonian Air.
The Commission has doubts that the rescue loan for Estonian Air is in line with the provisions of the EU guidelines on aid for the rescue and restructuring of companies.
According to these rules, companies in difficulty can receive rescue aid only once over a period of ten years, according to the so-called "one time last time" principle.
However, Estonian Air already benefited from three capital injections in 2009, 2010, and in 2011-2012, respectively, and these measures were not notified to the Commission.
While private shareholders participated in the 2009 and 2010 capital injections, the 2011-2012 injection was carried out exclusively by the State.
Moreover, the sale in 2009 of Estonian Air's ground handling business to the State-owned Tallinn Airport may have involved state aid to Estonian Air, says the Commission.
Should the Commission rule against Estonian Air, the carrier would have to repay the capital injections - in itself bringing it across the brink of bankruptcy if that had not already occurred.