A Rescue Plan for Estonian Air

Estonian Air fleet consist of two B737-500 and two 737-300. The two Saab 340 props are operated by subsidiary Estonian Air Regional. While industry’s average passenger drop in 2009 is forecasted at 3.1% Estonian air passenger figures in October shrunk by massive 31.9 %. The main reason for such a dramatic drop is cuts on frequencies with caused fewer passengers and even more cuts again. Even the new routes (to increase the aircraft utilization) are opened on low frequencies. As a result Amsterdam and Brussels are served only three times a week; Moscow, Kiev, London, Munich only twice weekly. No service to Paris and Berlin will be provided during week examined (January 11-17, 2010). Reasonably served B737 middle-range destinations are Copenhagen (19x weekly), Stockholm (10x weekly + more flights by Estonian Air Regional) and Oslo (5x weekly).

Although the fleet was cut this year - the aircraft utilization stands only at 57% - with means one plane is still odd.
The management always refers to low passenger demand and hopes for arrival of the new CRJ900NG whose smaller capacity and economics will allow operating more frequently.

Instead of cutting capacities I advise to expand the market. Riga airport on therouteshop.com has announced lack of five weekly flights from Riga to Paris. Estonian Air from Tallinn could pick up passengers at Riga organizing the route TLL-RIX-CDG(or even better ORY)-RIX-TLL. airBaltic is concentrating on mid-day flights to Western destinations and we see less and less evening and morning departures from Riga to Brussels and since KLM left – no evening and morning flights to Amsterdam. This mean Riga have a gap in market for time-sensitive passengers to Brussels and Amsterdam and Estonian air could cover it.
It would be a bad idea for Estonian air to enter Riga-London (daily by airBaltic, 2x daily by Ryanair and coming 3x weekly by Wizz Air) and Riga-Berlin (up to 3x daily airBaltic) so planes to London and Berlin may stop at Palanga. Palanga-London is highly attractive route with no direct competition. Palanga – Berlin is bit less attractive but - although slower than London - would gain passengers.

The aircraft utilization would be: 1st to Copenhagen in morning, Berlin in midday, Copenhagen in evening; 2nd to Stockholm in morning, Oslo or Moscow in midday, Stockholm in evening; 3rd to Brussels and Paris (time of day depending on Brussels); 4th to Amsterdam and London (time of day depending on Amsterdam).
Such routing would decrease demand on Copenhagen so no midday flight needed. Munich, Kiev and other low frequency destinations most probably must be dropped.

Estonian Air vs airBaltic on TLL – VNO

Tallinn to Vilnius route is the longest Baltic domestic route (530 km) and accounts for 7% scheduled seat capacity and for 10% departures on intra-Baltic aviation network. This route has suffered much from flyLAL bankruptcy (lost 2 daily departures) and from airBaltic Vilnius reductions (lost 2 more daily departures). Currently TLL-VNO is the only route where Estonian Air and airBaltic compete directly. As airBaltic has withdrawn morning an afternoon flights just six-weekly evening flights are left operated in an interesting pattern. Planes makes a triangle route RIX – TLL – VNO – RIX or vice versa departing 19:20 from booth Vilnius and Tallinn. Estonian Air is frequency leader on TLL – VNO but airBaltic offers more seats.

Estonian Air offers 2nd daily flights on Tuesdays, Wednesdays and Thursdays while airBaltic fares are lower on all days in October and November. BT’s fares typically start at €67 while OV’s at €78.

easyJet vs Estonian air on TLL - LON

Tallinn to London is one of the few routes out of the Baltic States with more than one carrier left. British easyJet flies to Stansted with the biggest frequency and capacity share leaving Estonia’s flag carrier Estonian air - with just two weekly flights to Gatwick - last. In end of August Estonian air will reduce capacity even more by putting their fresh 90-seated CRJ900 on the route. Already in October Estonian air frequency will be doubled to 4 weekly and weekly seating capacity will reach 360.

Cheapest one-way fares were found on each of the flights from June to August. In addition cheapest possible flight or flight combination was found on price comparison website momondo.com.

The results are clear – Estonian air tickets are about 40% more expensive than easyJet’s. Momondo.com returned interesting results – lowest fares offers easyJet, airBaltic or booth. airBaltic connections at RIX were cheapest in many cases in July and August but easyJets’s direct service in most cases in June, September and October. Estonian air and Czech airlines were cheapest in just few cases. Surprisingly but Finnair  - which operates feeder route to HEL -  offered the cheapest fare in no cases.

Worse frequencies and worse pricing makes serious concerns about profitability of Estonian air operations. They had put all hopes on introducing the new fuel-efficient CRJ’s so reducing operation costs. Lets hope that bringing frequency to four (1--45-7) will make the service more convenient and Estonian air will - at last - get on feet.