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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 |
Comments
Airline 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.
How 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?
I 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.
Iberia too, Volotea, Vueling.
It 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.
Regarding 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.
INN-NS
I 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 ?
The EU Commission do not allow competitors to LH group and AF/KL groups from Southern and Eastern countries to grow.
Adria already added Estonian to their web page...
INN-NS
Ja lepo kazem nigde se ne spominje ne znam sto.
INN-NS
How big is that, is that gong to make Adria the biggest airline in the ex-yu?
Or second biggest?
http://rs.seebiz.eu/fiskalni-savet-ocekuje-naplatu-nis-ovih-potrazivanja-do-kraja-godine/ar-123591/
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INN-NS
INN-NS
Come on...
al kad nisu u gradu koji nikad na spava. Jel to Air Serbija najavljuje letove za New York?
Ono 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.
Must be really unprofitable that Adria got it.
http://www.sasgroup.net/en/sas-launches-flights-to-tallinn/