Estonian Air’s 2012 loss widens to $63.3 million

Estonian Air (Tallinn) reported a net loss of $63.3 million but claimed its turnaround is “on track”.

The company issued this statement:

In 2012, the revenue of Estonian Air was 91.5 million euros. The company’s net operational losses was 35.8 million euros. Together with one-off costs (impairment on aircraft), the net loss for 2012 was 49.2 million euros ($63.3 million).

The costs associated with the attempt to grow the airline and expand the route network amounted to approximately 26 million euros.

“Late last year, the Supervisory Council of the company decided to change Estonian Air’s business model from growth oriented carrier to a regional point-to-point airline,” says Jan Palmér, CEO of Estonian Air.

“While the airline carried a record number of passengers in 2012, low yields from the transfer traffic did not support the airline’s bottom line. Although the airline brought four new jet aircraft into service by the start of the summer season, overall the fleet transition proved to be more costly than planned,“ commented Palmér.

From the end of January 2013, Estonian Air is working according to the restructuring plan to become cost efficient regional carrier to provide flights to the destinations critically important for Estonia, where the demand is constantly high.

“Our turnaround is on track. We are changing from a traditional carrier to a small cost effective regional airline serving a core route network of ten destinations. We have already succeeded in increasing the yield, signed collective agreements with the crew, started to divest non-core assets and thus starting to be where we want to be. This gives us confidence to sustain the business,” added Palmér.

The ten core destinations of Estonian Air include Stockholm, Copenhagen, Amsterdam, Brussels, Oslo, Moscow, St. Petersburg, Kiev, Vilnius and Trondheim.

Copyright Photo: Stefan Sjogren. The airline is dramatically phasing out all types and will concentrate around the Embraer ERJ 170-100.

Estonian Air: AG Slide Show

Estonian Air logo

Route Map: The route map is shrinking to its core destinations listed above.

Estonian Air 3:2013 Route Map