Baltic flag carrier Estonian Air reported a first-half net loss of €5 million ($6.65 million), narrowed from a net loss of €6.1 million reported for the same period last year.
First-half revenue was €32.9 million, down 8% year-on-year.
The airline cited reduced passenger numbers and lower yields due to increased competition at its Tallinn base for the losses. The airline also said that pressure on yields had increased across Europe, forcing airlines to adapt to changing market conditions.
Estonian Air carried 260,000 passengers in the first half, down 8% on the same period last year.
CEO Jan Palmér said: “In the first half of the year, the total number of passengers fell slightly behind our forecast. This is mainly due to less number of operated flights compared to last year, which is due to demanding market situation. However, in June and July we have seen the passenger volumes coming back.”
ASKs during the period were down 4% to 398 million and load factor was down 3.2 percentage points to 63.3%. Variable costs were down 7% and fixed costs were down 23% on the same period last year. These cost reductions were mainly attributable to lower personnel costs resulting from a 13% cut back in staff numbers, and reduced aircraft maintenance costs partly due to a reduction in fleet size.
“During the second quarter, Estonian Air has continued to perform in line with the restructuring plan, but in addition we must now intensify measures in response to a harsher market,” Palmér said. “Competition in Tallinn airport has become tougher as new carriers have entered the market and we have been influenced by continuing uncertain situation in Ukraine resulting in lower passenger volumes on Kiev route and lower transit passenger volumes flying from Europe to Russia.”
The carrier anticipates a return to profit by 2016.
Estonian Air reports H1 results
