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Estonian Air Troubles Rumble On

Debate in Estonia regarding Estonian Air now revolves around whether the airline will be closed down. 

The company last made an annual profit in 2005 and has been struggling ever since. Occasional government bailouts have kept it afloat to the unhappiness of the European Commission, who have questioned the funding.

Erik Sakkov, of the Tallinn Airport board, said that failure to keep the airline in business without an alternative on the routes could cost the economy €150 million per year.

The government is determined that if the company is left to fail, no such issues will arise. It is being reported that a back-up company has recently been set up by the government to take over the routes, should it be necessary. Over €40 million is being made available.

The European Commission are due to give a ruling on the bailout funds given to Estonian Air three years ago in the near future. Any ruling against the company would mean it would have to pay the money back, leaving the airline bankrupt.

This would trigger the use of the back-up company to operate the routes.

If the European Commission rule for the airline, the money will be used to pay back the initial bailout loan of three years ago.

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