airBaltic’s restructuring plan is in full swing, but competition from Estonian Air is rising
airBaltic's restructuring plan fittingly dubbed 'ReShape' is in full swing now, but the loss-making Latvian national carrier is facing increasing competition from its northern counterpart Estonian Air, which is copying airBaltic's model. The tactic is not surprising as Estonian Air's president and CEO Tero Taskila was airBaltic's former CCO and helped implement the carrier's shift from point-to-point operator to a network airline based around feeding transfer traffic between Western Europe and markets in Eastern Europe, the Nordic region, Russia, the Commonwealth of Independent States (CIS) and the Middle East.
Ironically, airBaltic is currently moving away from a stringent focus on transfer traffic over its "North Hub Riga" at Riga International Airport to a more point-to-point approach as part of its drive to return to profitability and build a sustainable long-term business. Too much transfer traffic and a testing public dispute between the airline's two main shareholders, which resulted in a decline in customer loyalty, brought airBaltic uncomfortably close to bankruptcy last year.
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