OREANDA-NEWS. During the cabinet meeting today, the Government decided not to appeal the decision of the European Commission regarding the state aid granted to Estonian Air.

The Republic of Estonia and AS Estonian Air have the right to bring an action for annulment against the decision of the European Commission. The state does not agree with the decision of the European Commission, as the Commission itself has noted that flight connections of the peripheral regions of Europe are poor compared to bigger European countries.

The Republic of Estonia will not appeal the decision, because Estonian Air is bankrupt and the result of a possible dispute would not change that. At the same time, the state would have double and partially opposing interests in the dispute. The state does not agree with the decision, but if the recovery would be smaller, the amount recovered to the state budget would also automatically decrease. In addition, the state has established a new company, which already organises flight connections from Tallinn.

“It would not be very beneficial for the state to bring an action for annulment against the decision of the European Commission, as Estonian Air is bankrupt and none of the possible outcomes would change that. At the same time, we would have double and partially opposing interests about the recovery. This does not mean that we agree with the decision of the Commission, as even the first analyses show that it is more complicated for smaller countries at the periphery of Europe to maintain flight connections, than in the centre of Europe. We will definitely hold a political debate so that the rules would take that into account, for example starting with more flexibility in ordering economically necessary connections,” said Kristen Michal, Minister of Economic Affairs and Infrastructure.

Estonian Air has the right to appeal and if the dispute is successful, the outcome would be economically better for smaller creditors and the amount payable by the company would decrease. The legal analyses ordered by the state will be sent to the bankruptcy committee of Estonian Air, so they can adopt a position on this and Estonian Air as a party affected can decide whether to bring an action for annulment.