Estonian Air - History

History

The airline was established by the Estonian government with aircraft acquired from the defunct local Aeroflot Division. Estonian Air started operation on 1 December 1991 with service to Frankfurt.

In 1992, the airline became a member of IATA and the first Boeing 737–500 was delivered in 1995. The company was partially privatised in 1996 with 66% of shares to Maersk Air (49%) and Cresco investment bank (17%). The company leased two Boeing 737-500s to replace its old Soviet planes, and in 1996, after obtaining two more Fokker 50s, it was able to retire the Soviet fleet entirely.

In 2003, Maersk Air sold its shares to SAS and the Fokker 50s were retired. By 2004 the airline had carried its 500,000th passenger.

In March 2007, Estonian Air announced that they will lease another Boeing 737–500 and serve a new destination, Vienna. Estonian Air has leased two Saab 340s and in June 2008 Estonian Air established a new company, Estonian Air Regional. Under that name it added new destinations from Tallinn to Kuressaare, Stockholm, Helsinki and Vilnius. Later on to Saint Petersburg and to Minsk.

In 2008 three new destinations (Minsk, Munich and Rome) were served and the company announced that it was ordering three Bombardier CRJ900 NG and further 3 options. On 27 November 2008, Estonian Prime Minister Andrus Ansip announced that SAS had approached the Estonian government, urgently requesting a cash injection to save the airline and offering to buy out the government's stake in the airline. The Estonian government is reportedly in negotiations with ferry company Tallink to come up with a counter-proposal.

In 2009 Estonian Air gave up its Vienna, Frankfurt and Simferopol routes. The company closed its ground handling division. New destinations from Tallinn were Amsterdam, Berlin and St Peterburg, new route was Tartu–Stockholm.

In 2010 Estonian Air started cooperation with KLM, announcing new route Tallinn–Vilnius–Amsterdam (starting from 12 February 2010).

In November 2011 Estonian Air announced reopening flights to Riga, 17 weekly flights starting from 25 March 2012, and to Helsinki, 18 flights weekly starting from 26 March 2012. As well as opening flights to Vienna, 6 weekly starting from 25 March 2012, and to Hannover, 6 weekly flights starting from 2 April 2012. It also announced to increase its flights to Stockholm, St. Petersburg and Vilnius starting from March 2012 and add extra flights on the Tallinn-Moscow route during the December 2011 holidays.

As of 10 May 2010, the government of Estonia and SAS Scandinavian Airlines have agreed to a transaction where the Estonian government has provided additional 21 million EUR in capital to Estonian Air resulting in the stake of SAS in the carrier to decrease from 49% to 10%. At the same time, the two parties have agreed that the Estonian government gets an option to buy the remaining 10% stake from SAS at a later time between then and 2014. Estonian Air and SAS Scandinavian Airlines will continue to cooperate in the same fashion for the time being. The short-term aim of the government is to become a leading shareholder and to invest in the company to ensure its future, as Estonian Air is strategically important to the state. In September 2010, Estonian Air announced that they have finally signed an agreement with Bombardier, in which two CRJ-900 NextGen aircraft are going to be delivered in the beginning of 2011 (both planes were delivered in January 2011) and a third one in 2012. The agreement with SAS Scandinavian Airlines was signed on 10 September 2010 and it took effect on 27 October 2010 when Estonian Parliament ratified 2010 state budget modifications, allocating needed funds for investment. In November 2011, Minister of Economic Affairs Juhan Parts proposed that SAS should follow the state's lead in making substantial investments in Estonian Air. SAS Vice-President Sture Stolen however said that this is unlikely: "We have a good and important partnership with them, but it is not our strategy to be part owners in Baltic airlines".

Estonian Air's new CEO and former AirBaltic chief commercial officer Tero Taskila expects the company to be earning a profit by 2012 after losing money since 2005. According to Taskila, the company already took a big step late in 2011 by clearing up its messy leadership issues.

After very bad economical results 2012 government of Estonia decided to fire CEO Tero Taskila. From the first of November new CEO will be Jan Palmér, who has over 20 years of experiences in different airlines in Scandinavia.