newstodate.aero
Sep 17, 2015 (newstodate): Estonia has developed a contingency plan in an effort to ward off the consequences of a negative verdict in the current EU probe into alleged illegal state aid for Estonian Air.
If the verdict goes against Estonia, Estonian Air must repay the 40.7 mio euro received from the state - and that would spell the end of the carrier.
The government has thus decided to establish a state-owned company with a share capital of 40,7 million euros. The main objective of the company will be establishing an aviation group and forming a structure inside the group enabling it to provide service for Estonia's aviation market and to other airline companies.
The investment funds for the new company are already allocated in the state budget. In case of a positive decision, Estonian Air will be merged with the established group and with the capital put in, Estonian Air will pay back the loan granted by the state.
In case of a negative decision, the new aviation group will organize flights on its own to provide service for Estonian market to ensure Estonia's connections to the rest of the world on the necessary level.
The state will also set up a company with a share capital of 32 million euros, which will take over Estonian Air's aircraft credit agreement and paid deposits from the Canadian crediting agency while shielding the carrier from claims against the assets of Estonian Air.
This company will continue to lease aircraft for Estonian Air as well as for other interested companies and according to the European Commission's decision, the assets could be merged into a bigger holding company to earn income or to use for maintaining the necessary connections for Estonia.
If the verdict goes against Estonia, Estonian Air must repay the 40.7 mio euro received from the state - and that would spell the end of the carrier.
The government has thus decided to establish a state-owned company with a share capital of 40,7 million euros. The main objective of the company will be establishing an aviation group and forming a structure inside the group enabling it to provide service for Estonia's aviation market and to other airline companies.
The investment funds for the new company are already allocated in the state budget. In case of a positive decision, Estonian Air will be merged with the established group and with the capital put in, Estonian Air will pay back the loan granted by the state.
In case of a negative decision, the new aviation group will organize flights on its own to provide service for Estonian market to ensure Estonia's connections to the rest of the world on the necessary level.
The state will also set up a company with a share capital of 32 million euros, which will take over Estonian Air's aircraft credit agreement and paid deposits from the Canadian crediting agency while shielding the carrier from claims against the assets of Estonian Air.
This company will continue to lease aircraft for Estonian Air as well as for other interested companies and according to the European Commission's decision, the assets could be merged into a bigger holding company to earn income or to use for maintaining the necessary connections for Estonia.