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Estonian Air wavers on edge of bankruptcy

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Airline’s loss for 2013 likely to be €8.1 million

Struggling flag carrier Estonian Air has not yet put a figure on last year’s losses, but a local newspaper says it is likely to be around €8.1 million – a million more than previously forecast.

The chairman of the airline’s supervisory board, Jaan Tamm, and board member Erki Urva confirmed that the loss figure given in the Postimees daily newspaper was more or less correct.

The airline’s CEO, Jan Palmér, refused to discuss numbers but said that Estonian Air was meeting restructuring targets it set out a year ago.

“Our core business is probably making a profit,” he said. “But we also have two aircraft that we have been unable to offload. We try to make as many charter flights with them as possible, but it’s still not profitable. Last year we also had a lot of restructuring costs, reducing both workforce and selling assets including aircraft.”

The carrier also faces a European Commission investigation into whether state aid given to it has been legal or not. Until the commission makes its decision, the airline cannot convert a state loan of €37 million into equity. If the decision is negative, it could quickly bankrupt the airline.

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