Estonian Air set unachievable goals according to former Estonian Air CEO Erki Urva (ERR News, 01-Nov-2012). Mr Urva said the airline attempted to make Tallinn Tallinn Lennart Meri Airport a regional hub, however, it was unable to do so due to the small nature of the Estonian market. The airline was also unable to offer a large number of destinations at competitive fares. Mr Urva said “at least in Central and Eastern Europe, there isn't a single airline that has succeeded with such a strategy”. Mr Urvu said the airline needs to consolidate its operation, cancel unprofitable routes and reduce frequencies. “After that it will be possible to start expanding again. The source of the problems was excessively rapid and explosive expansion. Had it been done at the right pace, perhaps things wouldn't have gone so badly,” Mr Urva said. Mr Urva led the airline from 2000 to 2005.
Estonian Air set unachievable goals: Former CEO
You may also be interested in the following articles...
airBaltic reaps rewards of restructuring rigour in Riga. Launch operator of CS300 returns to growth
On 28-Nov-2016 airBaltic took delivery of the world's first Bombardier CS300 for commercial service, which will begin on 14-Dec-2016 with a flight from Riga to Amsterdam. It will receive a further 19 of the aircraft variant by 2019.
Just five years ago airBaltic was heavily loss-making and close to bankruptcy. Under CEO Martin Gauss Latvia's national airline has negotiated a successful restructuring programme, established a track record of growing profits, secured a private investor alongside the national government, made significant load factor gains, and is now returning to capacity growth.
The new CSeries order should allow airBaltic to build on these achievements by replacing its ageing Boeing 737s with one of the most modern and efficient narrowbodies aircraft in the world, while also providing additional growth capacity. Together with its Dash-8 turboprop aircraft this purchase should give it a fleet well adapted to the niche needs of a hybrid regional hub airline based in northern Europe's smaller markets.
Vueling NEXT Part 2: new CEO to lead IAG's LCC in restructuring bid to achieve IAG targets
Vueling's new CEO, Javier Sanchez-Prieto, is leading a programme ('Vueling NEXT') to improve its profitability, both through revenue enhancement and cost efficiency gains. Among other aims this hopes to reduce Vueling's high levels of seasonality, to raise aircraft utilisation and to improve labour productivity. Given ambitious financial targets by IAG – action is needed.
Part 1 of CAPA's analysis of Vueling examined its capacity growth and profitability trends since its acquisition by IAG in 2013. Vueling's operating margin and return on invested capital are on a downward trend, hence the new initiative to reverse these trends.
This second part of CAPA's analysis considers the profit improvement programme. During this programme Vueling's fleet will remain broadly flat to 2018, before resuming growth thereafter. Focus markets for Vueling are domestic Spain and Spain-Europe. It has strengths in these markets but faces growing competition from its lower-cost rival Ryanair, which has also been raising its service quality – closing the gap to Vueling's more premium positioning on the LCC spectrum.