European investigation into state aid at Estonian Air

22nd Feb 2013
European investigation into state aid at Estonian Air

The European Commission has opened an in-depth investigation into a number of public support measures granted by Estonia in favour of its flag carrier airline Estonian Air.

At this stage, the Commission has doubts whether these measures are in line with EU state aid rules.

The opening of an in-depth investigation gives interested third parties an opportunity to comment on the measures under assessment.

It does not prejudge the outcome of the investigation.

Estonian Air has registered significant losses since 2006.

In December 2012, Estonia notified to the Commission its plan to grant a rescue loan of €8.3 million 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).

Indeed, Estonian Air already benefitted from three capital injections of €7.3 million euros (in 2009), €19.9 million euros (in 2010) and €30 million euros (in 2011-2012) respectively.

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.


Recommended for you

Follow Breaking Travel News

Travel Events Calendar

Media Partnerships

Global Restaurant Investment ForumThe Hospitality & Tourism SummitCATHIC
ITB AsiaChina Outbound Travel & Tourism MarketThe Travel Marketing Store
Serviced Apartment SummitWorld Travel MarketIMEX
AHICWTTCRoutes Online
UBM Aviation