Despite the recent good news that Estonian Air passenger numbers are on the up, insurance company Salva has said it can no longer provide cover to passengers for flight cancellations. 

The insurance company stated that there are signals that the European Commission impending decision against the airline will bankrupt the airline.

The European Commission is unhappy with the Estonian government’s decision to give state aid to the national carrier.

Salva added that all contracts signed before 7th October are not affected.

The Estonian government have set up a new company in the event of a negative decision from the European Commission. The new airline is called Nordic Aviation Group, commonly known as Nordic Airways.

Recently, Estonian Air passenger numbers for the first nine months of the year came out at 457,998, an increase of 9% compared to the same period of 2014.

The number of flights the company operated was 9,251 in the first nine months of 2015, an increase of 12.9% on the previous year.

Estonian Air operate out of Estonia’s capital, Tallinn.