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| Adria to profit from Estonian demise |
Adria Airways has been selected by the Estonian government to step in if Estonian Air declares bankruptcy, which could happen as early as today. The Estonian national carrier is awaiting for the European Commission to rule whether the 57 million euros worth of state aid it received from 2009 onwards was in line with European Union regulations. Following a three-year investigation, the Commission is likely to make its decision public today. Sources claim that the ruling, which has been drafted and is in the process of being translated, will require Estonian Air to pay back all of its state aid, effectively bankrupting the carrier.
Aware that its national airline is likely to go bust this weekend, the Estonian government has moved to select Adria to deal with the fallout. From Sunday, Adria will operate a handful of flights out of Estonia as well as the service from Orebro in Sweden to Copenhagen, launched only last week. "This change ensures that the route continues to be operated under the same terms and conditions as before. Adria Airways has been a full member of Star Alliance since December 2004, and thus has access to 27 airlines including SAS", Orebro Airport said in a statement. Estonian media note that Adria has been selected as both airlines have similar fleets. Estonian Air operates with three Bombardier CRJ900s and a pair of CRJ700 aircraft.
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| Tallinn Airport |
The Estonian government has created a successor to its embattled national carrier called Nordic Aviation Group. However, the airline is yet to receive necessary permits and is unlikely to take to the skies soon. Adria is expected to operate out of Estonia over the next six to twelve months. On the other hand, Austria's InterSky was recently selected to operate Estonian Air's flights between Tallinn and Oslo from tomorrow until December 6. However, the Austrian airline declared bankruptcy on Thursday. Adria's involvement with the Estonian government will generate much needed funds. The Slovenian carrier is seeking an eight million euro cash injection from investors by the end of the month.
UPDATE
The European Commission ruled today that Estonian Air had illegally received state aid. The carrier "didn't carry out the necessary restructuring to become viable as a business", the ruling notes. As of tomorrow, Estonian Air will cease all operations.
Estonian Air has ceased operation as of 8.11.15 due to EC’s negative decision. More info: https://t.co/u33OgYcQwM or by phone +372 605 8888
— Estonian Air (@Estonian_Air) November 7, 2015
As a result, Adria Airways will be introducing scheduled services from Tallinn tomorrow. In the initial phase, flights will be operated by partner airlines BMI, Carpatair, Next Jet and Trade Air. During this period, the Adria Flight Career Centre will retrain additional crew members in accordance with Adria's protocols. This period will also see the incorporation of three CRJ900 and two CRJ700 aircraft that were previously part of the Estonian Air fleet. The project is expected to run between twelve and eighteen months. Adria Airways will also provide Nordic Aviation Group with full commercial and operational support and will operate all flights using its own aircraft or leased aircraft. "The key aim of this project for Adria Airways is the commercial effect of flying in conjunction with Nordic Aviation Group, as well as a long-term alliance in the regional carrier sector and a search for synergies, which is the key to the success and survival of all regional airlines in Europe", Adria said in a statement, released this evening.
As part of the deal, Adria Airways will be operating on the following routes from Monday, November 09 (click the link for further details)
As part of the deal, Adria Airways will be operating on the following routes from Monday, November 09 (click the link for further details)
| Route | Launch date |
|---|---|
| Tallinn - Amsterdam | NOV09 |
| Tallinn - Brussels | NOV09 |
| Tallinn - Copenhagen | NOV09 |
| Tallinn - Kiev | NOV09 |
| Tallinn - Oslo | NOV09 |
| Tallinn - Stockholm | NOV09 |
| Tallinn - Vilnius | NOV09 |
| Tallinn - Trondheim | NOV13 |
| Tallinn - Munich | DEC12 |
How ironic. Adria was in the same position last year wajting for the EC oi announce its verdict
ReplyDeleteNo irony here. Just plain interest. EC has a very interesting approach when it comes to state aid in the aviation industry. You have nothing to worry about if you are closely connected to Lufthansa. It will be interesting to see what EC comes up with when it comes to Etihad's deals in Europe, although they were all done in accordance with EC prescribed state aid regulations. I would still not be surprised if they came up with something to slow down Etihad...
DeleteJust a question, maybe I am wrong. JP is still a state owned company and the slovenian taxpayers contribute to its developement. Are the slovenians paying to fly around estonians? Just a question.
ReplyDeleteI think it's the Estonian government that is paying for these flights. I might be wrong though.
DeleteI remember when Cyprus Airways suffered the same scenario, the government created a fund to re-route stranded passengers via other airlines. I think this is so much easier... and cheaper than renting out airplanes.
Come on. Of course it's the customers themselves who pay for the tickets. In fact, I just bought 5 tickets for €1000 to replace the ones that I had with Estonian Air, which will in turn be compensated by government.
DeleteToo many of them around....Europe s nations need to open up their minds and think more with visions and less in limits. We dont need that many carriers in Europe and not every capital needs a limou in the garage. Less is more. Look to the States where the big 3 are making good profits again. Once we proceed this far in Europe we also wont need any government aid injections more
ReplyDeleteYeah but how to decide who gets the hubs and airlines and who doesn't?
DeleteAirline hubs are a HUGE economic engine. The European Union seems to be trying their best to limit the growth of Airlines in Southern and Eastern Europe.
A3 is in Southern Europe and grows just fine.
DeleteIberia too, Volotea, Vueling.
It leads to monopoly. All business in hands of a few people. Awful.
DeleteLot was saved by the European Union and so were Adria and airBaltic. It was more than obvious that the three airlines received funds just like MA, CY and OV did.
DeleteIt all depends who has the most influential friends in Brussels and who can lobby for you. So it doesn't really have to do with the EU limiting growth.
Actually, funny that Aegean was mentioned because in their case the EU was limiting their expansion. For about two years they were delaying the sale of OA fearing that the domestic market would end up being uncompetitive. After two years the EU finally approved this deal and it was only then that A3 started to truly expand.
Of course the incompetent bureaucrats should have known from the start that such a large market would not remain in the hands of a single airline. Look at the situation today, these are the airlines that operate domestic flights in Greece: Aegean, Ryanair, Astrajet, Ellinair, Volotea and a few smaller, island airlines.
These EU laws benefit established airlines in Western Europe and to keep developing countries from establishing their own stable airlines.
ReplyDeleteFew questions here.
ReplyDeleteHow will Adria be payed? You will assume that the money for the already purchased flights will be stuck in Estonia Air accounts. Are there laws preventing the Estonian government in paying Adria? If not then whats the difference between this and an airline getting subsidiaries?
Why wouldn't any state owned airline in the EU just re'register in a different EU country and then just be payed by its own country to fly non profitable routes?
Could this be a loop hole or am I getting to ahead of my self?
It's still unclear if these flights will be there for a short period of time or for a much longer one. If the latter then it will be tricky because they will have to follow strict EU laws on subsidies. Like I wrote yesterday, once OV goes belly up, BT and FR will just add flights and compensate for their loss. OV was already rather insignificant in the local market so their departure won't be missed.
DeleteEstonian government will compensate EA ticket holders, who then use their own money to purchase tickets from Adria.
DeleteGo Adria!
ReplyDeleteBravo Slovenija!
ReplyDeleteMa sta bravo? Iz Ljubljane nikakav razvoj prema jugu i Spanjolskoj, ali zato linije iz Tallina?
DeleteThere is not enough demand to cover the routes you are talking about as Slovenians only fly if the prices are cheap.
DeleteRegarding Estoninan flights, during the winter time Adria has problems as 2-3 aircraft sit in Ljubljana doing nothing, because there is not that much demand. If these flights go ahead, Adria will utilize these aircraft and hopefully make a profit out of it.
Yeah, Slovenia is only the wealthiest ex-Yu country, so it makes sense they only fly if the tickets are cheap. I guess that's also why people from Slovenia go to Venice, Milan, Munich, and probably Budapest too, to catch flights from there.
DeleteIt is not about the money, it's about narrow-mindedness. Not that many Slovenians go to these airports to travel around.
DeleteThe times when Slovenia was the richest among the ex yu countries, are long time gone. Maybe the GDP is higher than in other countries but the fact is that the expences and taxes are much higher and most of the Slovenians still can not afford air travel. A lot of Slovenians also work for 650EUR per month and to pay for a ticket 150-250eur is impossible for them.
DeleteEC has just confirmed it will announce its decision on Estonian Air today.
ReplyDeleteIf the Estonian government has gone to all this trouble to set up a new national airline and make deals with Adria and others it's pretty clear what outcome they are expecting. Just like with Adria when the government did absolutely nothing before the decision was announced because they knew the outcome.
DeleteS5-AAZ CRJ700 should be flying ORB - CPH tomorrow.
ReplyDeleteEC is really doing its job at closing down airlines. Malev, Cyprus Airways, Estonian... Adria got lucky.
ReplyDeleteLufthansa affiliates are rarely affected ;)
DeleteIf Serbia joins EU that could happen to JU as well.
DeleteThe EU Commission do not allow competitors to LH group and AF/KL groups from Southern and Eastern countries to grow.
No...they will be profitable by then or diminish before!
DeleteMaybe Adria will come and save them like Estonian! ;)
DeleteBice svakako zanimljivo videti kako ce se izboriti sa ogromnom konkurencijom ako se ovo desi.
ReplyDeleteINN-NS
It's confirmed. Estonian Air has been ordered to repay state aid. Estonian economy Minister will confirm the ruling in afternoon.
ReplyDeleteIf they go bankrupt Adria could biy some of their CRJs in order to set up a base at MBX where they could base one or two CRJs to introduce some new routes from there.
ReplyDeleteYeah, right. Before 2 weeks Adria was begging money for winter time around 8millions EUR, so they can go through, and now they will have a base in MBX :)???
DeleteCome on...
If they start with summer schedule this could work. For winter is too late now
DeleteWhat will happen if Adria doesn't get 8 mio EUR? Rescue flights for rescue flights? :D
DeleteIt is now official: http://www2.estonian-air.ee/#
ReplyDeleteIt seems that EU is converging to US model, big 3 legacy carrier groups + 2-3 LCCs.
ReplyDeleteI wonder what is next big move in the battle for the market. All legacy carriers have established LCC subs to varying degrees of success (Vueling, German/Eurowings, Transavia) and adopted LCC practices. I wonder what LCCs will do next. Ryan plans to have 180m passengers by 2024 (almost double 2015 number).
Since overall intra-EEA P2P market will not grow nearly this fast. I wonder what destinations beyond EEA they plan (Morocco and Israel seem to be the only destinations outside EEA for now). When will they start transatlantic flights ?
https://www.adria.si/et/
ReplyDeleteAdria already added Estonian to their web page...
Citao sam na stranim portalima i nigde nepise preuzimanje od strane ADR nego BT cudi me da ne znaju.
DeleteINN-NS
Klinac ne lupaj. Adrija od sutra leti na tim linijama, odluka je vladina. Ne pravi se pametan, ispadaš smješan.
DeleteKoje još kompanije preuzimaju linije od Estonian-a?
Deletehttp://www.aerotelegraph.com/estonian-air-stellt-den-betrieb-ein-air-baltic-springt-ein
DeleteJa lepo kazem nigde se ne spominje ne znam sto.
INN-NS
No other airlines besides Adria form Tallin. So, basicly Adria is a new Estonian :) Great job!
DeleteDete stvarno si smešan. Smaraš. Čitaj članak, vidi na Adrijinoj stranici, karte se prodaju. Ne budi...
DeleteGreat source of income for Adria when it needs it most. The airline has just become much more attractive to potential investors.
ReplyDelete+1
DeleteThe timing is perfect for Adria!
DeleteI wonder if Ljubljana-Talinn flights would be feasible (2x weekly?). Maybe next summer?
ReplyDeleteSo basically Adria takes over Estonian Air's flying routes and fleet?
ReplyDeleteHow big is that, is that gong to make Adria the biggest airline in the ex-yu?
Or second biggest?
3 CRJ900 i 2 CRJ700 ce biti preuzeta nece imati najvecu flotu jedino ce mozda imati najvecu mapu destinacija.
DeleteINN-NS
Will new planes get Adria livery?
DeleteYes admin. Do you have this information? I would also like to know
DeleteJa ne znam dali ce preuzeti ili ne samo sam naveo flotu .
DeleteINN-NS
"The project is expected to run between twelve and eighteen months. Adria Airways will also provide Nordic Aviation Group with full commercial and operational support". Now, this is a big new. Well done, Adria!
ReplyDeleteEx YU Aviation, once again fantastic news coverage. Mamma mia what a service. Thank you so much for all yr great efforts
ReplyDelete+1
Delete+1
Delete+100
DeleteBravo Adria Airways. Vaš novi slogan bi trebao biti Nova krila Evrope.hihi
ReplyDelete+1000
Delete+10000000
Deleteal kad nisu u gradu koji nikad na spava. Jel to Air Serbija najavljuje letove za New York?
Today is Adria's day in the spotlight for a good and well deserved reason. Let's give Air Serbia rest until Monday.
DeleteLjubljana-Tallin in summer would be a reasonable choice
ReplyDeleteThey said maybe in 2017 ;)
DeleteOT - much has been said about what sort of subsidies Air Serbia receives from the State. This article confirming that it does not owe any money to NIS and pays all its bills - as confirmed by the NIS CEO Kravchenko - will hopefully put to bed that urban myth.
ReplyDeletehttp://rs.seebiz.eu/fiskalni-savet-ocekuje-naplatu-nis-ovih-potrazivanja-do-kraja-godine/ar-123591/
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I ti si to ovde pročitao? Blago meni. Ovde se govorio o dugovima prema NISU koji su isplačeni i to iz budžeta Srbije (staro dug Jata).
DeleteOno što se zna je da NIS dobiva novac od Srbije za Jat (stari dug), te da Air Serbija ima povlaštene cene zbog nekog sporazuma između Srbije i NIS-a koji verovatno ni Interpol ne može da istraži kakav je i na koji način se to plača.
^ Covece kako ti ne dosadi svaki dan. Air Serbia ti ne izlazi iz glave.
DeleteBravo Adria!
ReplyDeleteGledam kako su u subotu saznali da će da preuzmu sve a već u nedelju su imali i oznake, i ticket office, i reklamu. A sečam se kako je Air Serbia u Beču još 7 meseci imala na aeroromu natpis Jat.
ReplyDeleteDo I understand it correctly that all of these JP-coded flights will earn as usual in Miles&More and other *A programs? (Great news if so :) )
ReplyDeleteYes you do, the tickets will be issued by Adria and the flights will be fully compatible with star alliance and miles and more/miles and smiles/miles and bonus and so on. It will be/is a normal Adria star alliance scheduled service.
DeleteThanks!!
DeleteA great opportunity for JP, this is a new base for them.
ReplyDeleteWhy they selected Adria among all the possible choices?
ReplyDeleteMust be really unprofitable that Adria got it.
Your comment (logic) is either weird or malicious .... I believe they got the deal because they have similar fleet, free planes in winter season, training center for new crews and are also a reliable business partner. I believe many airlines have free planes during winter season and were interested, but they lacked other things ...
DeleteAnd I suppose that it was also a star alliance LH SK JP deal, because SK and LH would lose lots and lots of transfer passengers if Adria went bust. So I also think it is a rescue deal made by Star Alliance, offering Adria a helping hand.
DeleteSadly for Nordic Aviation Group though, SK has announced its own flights to CPH/ARN/OSL to start next week--in competition to JP!
ReplyDeletehttp://www.sasgroup.net/en/sas-launches-flights-to-tallinn/