Checo77
Topic Author
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Estonian Airlines Dropping Several Routes

Tue May 23, 2006 12:42 am

Estonian Airlines are droping several European routes out of the Estonian capital and the airlines main hub, TLL.

As of July 1st, they will drop MAN.

As of September 1st, they will drop DUB.

In their winter schedule, CDG and HAM.

Pretty sad news, is Estonian Air in problems or something?

Adam
Czech Boeing lover living in Lima
 
adamlaskiewicz
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 3:36 am

I remember reading on justplanes.com a while back that this was the plan. Estonian Air would be dropping a few business routes and would then concentrate mainly on leisure destinations whilst air Baltic would take care of the rest. As far as I know, however, air Baltic only operate from Riga and Vilnius and Tallinn is not a base so maybe there are plans in the pipeline.
 
DavidT
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 4:24 am

When I was in Tallinn a month ago I read a few articles and it seemed everything was rosy.

I'm quite annoying MAN has been dropped, was eyeing them up as an alternative to going via HEL...
 
stirling
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 5:12 am

I wonder if this has anything to do with the entry into the market of Ryanair and easyJet?

While FR does not serve TLL directly, they do serve KUN (300m S) and RIX (175m S).

My question, any evidence of people crossing borders to take advantage of the sometimes ridiculous fares FR is known to offer?

Would people there be willing to cover that much distance on the ground, to get a cheap fare to say London or Liverpool? I know the practice is prevalent in the USA, not so sure about Eastern Europe with a more dense population.

While there might not be a lot of direct competition at TLL, there is some substantial LCC service offered from other airports in the region, within 300m/500km.

Ryanair:
KUN-LPL/HHN/NYO/STN/DUB
RIX-LPL/HHN/NYO/STN/DUB/TMP

easyJet:
RIX-SXF
TLL-SXF/STN

And I wonder about LED?

How hard is it for Estonians to cross the border? Is LED siphoning off any of the traffic that should be using TLL?
St Petersburg offers much more competition in the form of Pulkovo, Aeroflot-Nord, and Aeroflot, in addition to most of all of the major Western European airlines. Did I hear correctly that Niki is serving LED now from VIE?

Anyway, it is going to be harder and harder for these small nations to have viable airlines in the face of the Mega-LCC....there is just no way they can compete against a 0.99 Euro fare from TLL, or RIX, or KUN to places like the UK and Germany...
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Humberside
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 5:24 am

Quoting Adamlaskiewicz (Reply 1):
Estonian Air would be dropping a few business routes and would then concentrate mainly on leisure destinations whilst air Baltic would take care of the rest.

I think this is down to owner SAS
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andaman
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 6:07 am

Quoting Stirling (Reply 3):
How hard is it for Estonians to cross the border? Is LED siphoning off any of the traffic that should be using TLL

Still many Estonians use Finnair and HEL, especially what comes to long haul and holiday flights, HEL is only around 100km from TLL and Finnairs's daughter Aero has the monopoly between them.

Estonia doesn't belong to the Schengen-area yet but otherwise they are as free to cross borders as others in EU.
Chinese cookie in SFO: "You're doomed to a life of forever travelling abroad and to be able to afford it!"
 
Checo77
Topic Author
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 8:43 am

Quoting Adamlaskiewicz (Reply 1):
Estonian Air would be dropping a few business routes and would then concentrate mainly on leisure destinations whilst air Baltic would take care of the rest

That is weird, because Estonian Air has flight out of VNO and RIX to Europe as well. But TLL is their main hub. I just does not make any sense droping big European cities like CDG, DUB and HAM where they are virtually the only airline serving the route. They cannot tell that these routes are unprofitable. I just cant belive that TLL-CDG-TLL is NOT profitable, I cant.

Adam
Czech Boeing lover living in Lima
 
Rottamo
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 9:14 am

I know some people from Helsinki who go to Tallinn (by boat) when they have to fly to London. Especially, when they are flying only one-way. Easyjet is so much cheaper when you are considering one-way tickets.

Rottamo
 
Rottamo
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 9:22 am

Other occasion came to my mind. Flying from Tallinn to Japan used to be a lot cheaper than from Helsinki (using Finnair).

So one family I know (they are living in Helsinki) flew from Tallinn to Japan just to save money instead of flying from Helsinki.

Route:
From Helsinki to Tallinn by boat.
From Tallinn to Helsinki by Finnair.
From Helsinki to Japan by Finnair.

and return:
From Japan to Helsinki by Finnair.
From Helsinki to Tallinn by Finnair.
From Tallinn to Helsinki by boat.

Boat from Tallinn to Helsinki takes 1.5 hours.

BTW. Same family is right now in Portugal. They drove to Tampere (2 hours).
From Tampere to London by Ryanair and from London to Portugal by Ryanair.

Some people want to save money and when there are several people traveling savings can be quite large.

Rottamo
 
andaman
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 9:22 am

Quoting Rottamo (Reply 7):
I know some people from Helsinki who go to Tallinn (by boat) when they have to fly to London. Especially, when they are flying only one-way. Easyjet is so much cheaper when you are considering one-way tickets.

Rottamo

The two largest European LCCs avoid HEL, Easyjet flies to Tallinn and Ryanair to Tampere, 200km north of HEL... so annoying.

Atleast Air Berlin is there for Stansted, with a stop in DUS though.

[Edited 2006-05-23 02:23:45]
Chinese cookie in SFO: "You're doomed to a life of forever travelling abroad and to be able to afford it!"
 
Established02
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RE: Estonian Airlines Dropping Several Routes

Tue May 23, 2006 2:30 pm

Quoting Stirling (Reply 3):
How hard is it for Estonians to cross the border? Is LED siphoning off any of the traffic that should be using TLL?
St Petersburg offers much more competition in the form of Pulkovo, Aeroflot-Nord, and Aeroflot, in addition to most of all of the major Western European airlines.

I would think LED is currently not much of a threat to TLL.

The Estonian residents with an alien (grey) passport may be able to easily cross the Russian border. But the Estonian citizens with a blue passport do need a visa for Russia. To obtain a Russian visa you (usually) need an invitation, you have to visit the Russian Embassy, queue up, pay 50 EUR or more... Finally the road connections between TLL and LED are not very smooth either, I believe
 
Treg
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RE: Estonian Airlines Dropping Several Routes

Mon May 29, 2006 10:12 pm

Just some very late remarks (as I was travelling last week).

There are very many open questions with Estonian Air (OV).

They have increased their schedule (mainly at the charter side) but failed to aquire new planes (they found one 733 that was suitable, but were looking for 2). Therefore, they simply do not have enough planes to fly all the routes. Yesterday, for example, I was flying LGW-TLL with a MD-83 that was wet-leased from Nordic Leisure.

Their service follows SAS (in my opinion failed) model, where it is impossible to say: is OV a LCC or a regular carrier. They have one-way fares, they have food for purchase, they offer you connections, they have business class, economy flex and economy. In a word: it is a mess. And I'm afraid that they have scared away many passangers, mainly at the business side.

And then there is this problem called SAS (part-time owner). SAS has business interests in both, OV and airBaltic. Few years back OV had very big plans for expansion. SAS said: No (although OV has always been profitable). Now all these routes are flown by airBaltic and you can connect through RIX (not very apealing).

IMHO the main problem with OV is their lack of vision. All their business decisions are based on days, not on years. And I assume that many problems originate from SAS that is in big trouble itself.


Concerning alternatives from TLL. The main alternative is HEL, that is very widely used by Estonians. It takes approx 20 min by plane or helicopter and 1,5 hours by boat to cross the sea. The boat departures are very-very frequent. LED is out of question because of visa requirements, RIX is alternative only to the southern part of Estonia (as it is too far from Tallinn). And that's it. Sometimes you see some people going to Nykoping (Stockholm South) to take Ryanair from there, but these are very few.
 
jfidler
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RE: Estonian Airlines Dropping Several Routes

Tue May 30, 2006 1:06 am

There was an article in the Estonian business daily Äripäev today about all the changes to their flight schedule. The article is for subscribers only and only in Estonian, but I can list the changes here:

  • TLL-MAN route cancelled from July 1
  • TLL-DUB route cancelled from September 4
  • TLL-HAM route temporarily cancelled from September 4 (no information on when it wil resume)
  • TLL-BGY route Monday's flights cancelled from June 5
  • TLL-SVO route Tuesday's flights cancelled from July 4
  • TLL-OSL route Saturday's flights cancelled from July 8
  • TLL-BCN route Sunday's flights cancelled from July 9
  • TLL-FRA route Tuesday's and Thursday's flights cancelled from July 3, Wednesday's flights cancelled from September 6
  • TLL-BRU route Wednesday's flights cancelled from June 14 - August 16


For a class project, I did an extensive study of Estonian Air's corporate performance. I benchmarked them against firms of varying sizes and models, and also looked at game theory in terms of competition and pricing, since they generally have at most one direct competitor on any given route. Earlier in this thread it was mentioned that LED and RIX are alternative airports, but I don't think there is much competition. LED requires a Russian visa (as was mentioned), which is costly and takes time, and it also requires traveling at least 7 hours by bus/car. RIX doesn't have the visa issue, but it's also a trip of 5-6 hours. In many cases, even if OV is costly, it will not be as costly as the hassle and traveling expenses of using an alternative airport.

HEL is the real competition for TLL, as there is much more competition from that airport and prices are adjusted accordingly. This is especially true when going to more far-off destinations. In my experience, if you know in advance your travel dates, then flying on OV to one of their destinations is reasonably OK price-wise. If you are traveling somewhere they don't fly (necessitating a transfer), then you're better off getting out of TLL on one ticket (to HEL or even to LON or FRA), then buying a separate ticket from there. For example, when I had a business trip earlier this year to SIN and SYD, it was 4x cheaper to book TLL-LGW-TLL tickets on OV, then book a separate itinerary for the other parts of the trip (LHR-SIN-SYD-SIN-LHR in this case).

My financial benchmark analysis (which only used FY2004 data because their FY2005 Annual Report had not been released yet) showed that they are not skillfully capturing the customer's willingness to pay. They are charging too little for advance-purchase tickets, and as a result their planes are full of too many low-paying customers, who would be willing to pay 10-25% more for their tickets (OV actually underprices EasyJet in these situations). I think the cancellation of the DUB and MAN routes are for this reason -- I do remember reading in a local newspaper a few weeks ago that they indicated the profits were not there on these routes.

BGY is interesting -- I think they are not competing well in the Italian market, so that most of the Italian tourists are arriving via holiday charters. They should do more to court the package operators. It may also be an issue that the timing of this flight (same for DUB) is quite inconvenient -- it's overnight.

OSL, SVO, and BRU cancellations are probably due to lack of capacity -- they have not been able to add a sixth aircraft to the fleet as was planned when this schedule was originally drawn up.

FRA is interesting. I was able to get access to pax traffic data out of TLL and analyzed the effect of LH's entry into the market in 2004. The LH entry ended up increasing the traffic on this route, and LH didn't really "steal" any traffic from OV. I think LH was bringing in pax from far-away destinations connecting through FRA. At the time LH had only a 1x daily flight that was in the evening, which made it impossible to fly to the US through FRA for example, since all US-bound flights leave FRA in the morning. OV was getting the outgoing morning traffic to FRA in these situations. However, about 2 months ago LH finally wised up and added a morning flight too. This makes connecting through FRA on LH both ways quite easy, and I think that has caused OV to scale back this route. As an aside, when KL entered the TLL-AMS route, they pummeled OV and OV pulled out of the route a few months after KL entered. The reason (in my opinion) is OV had no agreements in place at AMS so they could not pick up any transfer pax through AMS, only O&D.

BCN is primarily a tourist destination (both ways) and I suppose the charter companies are beating them there. Just from walking around the streets of Tallinn and listening to what languages people are speaking, I can say that TLL has grown in popularity as a destination amongst Spaniards.

The temporary cancellation of a BRU flight is not surprising since most people in Europe take their holidays around this time, and the BRU route is mostly to shuttle people back and forth from the EU.


Something else that everyone might find interesting: prior to 2004 OV had more pax traffic through TLL than all other airlines combined. Starting around November 2004, this changed, and now all the other airliens (combined) have a much larger share of pax than OV does. 2004 was the year Estonia entered the EU, and it looks like OV could not handle the increased competition well.

I heard from an Estonian aviation industry insider that OV is considered the ignored airline by SK, and all the focus is on BT. Based on BT's expansion recently, I do agree with this. I think in the next few years, we'll see OV become part of BT or SK, and TLL traffic will consist primarily of feeder flights to RIX and VNO, and direct flights to key high-demand markets like LON, CPH, STO but definitely not to places like SIP and DBV, which are 2 destinations OV currently flies to.

OV could improve by changing the aircraft mix. All aircraft in the fleet are some variation of the B737 (B735 and B733 to be exact). The problem is the break-even point on such a plane. You need to fill X seats (assuming the pricing model stays the same) to break even. On a smaller plane, the number of seats to reach break-even is lower, and this is key in a small market like TLL. TLL-AMS (just an example) may not have been profitable on a B737, but might be on a smaller plane as you need to fill a fewer number of seats -- a number which might map more closely to demand.

I have also noticed that OV occasionally operates charter flights during the day -- those valuable times should be used instead for scheduled service, whose passengers are usually willing to pay more.
 
greenjet
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RE: Estonian Airlines Dropping Several Routes

Tue May 30, 2006 3:55 am

I'm surprised that DUB is being dropped. There is a sizeable Estonian population in Dublin following the EU expansion of 2004. However, on the downside the timings were poor and the marketing was virtually non-existent. Tallinn is a great city and I'm disappointed that there was no advertising to attract short break tourists from Ireland.
 
andaman
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RE: Estonian Airlines Dropping Several Routes

Tue May 30, 2006 4:04 am

I suppose Estonian Air doesn't have any plans to return to HEL? Would be nice to have it competing with Finnair's Aero, though OV's B737 would be too large for the route I guess.
Chinese cookie in SFO: "You're doomed to a life of forever travelling abroad and to be able to afford it!"
 
Checo77
Topic Author
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RE: Estonian Airlines Dropping Several Routes

Tue May 30, 2006 8:23 am

Quoting Greenjet (Reply 13):
However, on the downside the timings were poor and the marketing was virtually non-existent. Tallinn is a great city and I'm disappointed that there was no advertising to attract short break tourists from Ireland.

That is sad... and the big difference with Prague. When I was un DUB, I saw a lot of advertisement trying to convince Irish to go to Prague. And it worked, since there are lots of airlines flying the routes now.
So sad for Estonia...
Adam
Czech Boeing lover living in Lima
 
zvezda
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RE: Estonian Airlines Dropping Several Routes

Tue May 30, 2006 8:38 am

TLL and Estonia are even smaller than VNO and Lithuania. I'm amazed that TE (Lithuanian Airlines) have survived as long as they have. With pressure from much better run Air Baltic, I don't see TE surviving for more than another year or two. How TLL could be a hub is beyond my comprehension.
 
Treg
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RE: Estonian Airlines Dropping Several Routes

Tue May 30, 2006 6:09 pm

The very latest from today's newspapers:

OV has failed (again) to aquire smaller aircrafts in addition to their current fleet of 733/735-s. They had a preliminary agreement with an unnamed leasing company to lease three F70-s. These aircrafts are currently operated by Malev, but seems that Malev wants to extend the leasing agreement and therefore there won't be anything for OV.
 
prebennorholm
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RE: Estonian Airlines Dropping Several Routes

Wed May 31, 2006 4:46 am

Quoting Treg (Reply 17):
OV has failed (again) to aquire smaller aircrafts

Dear Treg, what happened to the two F-50s ?

Anyway, I can't help but thinking that the eastern Baltic coastline is somewhat spoiled with international airports. HEL, TLL, RIX, VNO.

Look at the western side - 1,000 miles of Swedish east coast. They have ARN, period.

I can assure you that in most countries (Germany, France, USA etc.) it is not the rule that within 100-150 miles of your home you can go to just about any major city within 500-1,000 miles.

I think that living in Tallinn (only half a million cityzens) you are very fortunate to have OV with an after all rather impressive network, cosidering the geographical position on the N-E outscirts of the EU. And a national population of just 1.5 million. And the second largest city - Tartu - actually closer to Riga, Latvia than Tallinn.

You have so many alternatives - even including ARN - which are easily reachable.

No Schengen yet. But wave any blue postcard which at distance may look like an Estonian passport and you are welcomed immediately everywhere (except when going east of course).

If SAS becomes a really prosperous airline again, then I would assume that the SAS cooperation will simply widen from three to five countries, Denmark, Norway, Sweden, Estonia and Latvia. In that picture I can't see that Tallinn can be much of a hub, but rather a large regional airport in the leage with for instance Lulea, Malmoe, Billund, Stavanger, Bergen, Bodoe etc. Due to the limited customer base it's route stucture will not compete with rather nearby HEL, ARN and VNO.
Always keep your number of landings equal to your number of take-offs
 
Treg
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RE: Estonian Airlines Dropping Several Routes

Wed May 31, 2006 5:00 am

Quoting Prebennorholm (Reply 18):
Dear Treg, what happened to the two F-50s ?

These were phased out many years ago. 2002 to be more precise  Wink
 
L410Turbolet
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RE: Estonian Airlines Dropping Several Routes

Wed May 31, 2006 5:13 am

Quoting Prebennorholm (Reply 18):
If SAS becomes a really prosperous airline again, then I would assume that the SAS cooperation will simply widen from three to five countries, Denmark, Norway, Sweden, Estonia and Latvia.

I guess that's almost inevitable process. On the other hand it will be really sad to see such beautiful livery like Estonian's disappear from the skies.



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[Edited 2006-05-30 22:15:54]
 
prebennorholm
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RE: Estonian Airlines Dropping Several Routes

Wed May 31, 2006 8:30 am

Quoting L410Turbolet (Reply 20):
...it will be really sad to see such beautiful livery like Estonian's disappear from the skies.

Agree totally!!!

But maybe we don't have to worry? Since SAS now has become more or less divided into three national carriers and one intercontinental operator, then I wouldn't be surprised to see four different liveries for SAS next time they redo their livery. In that case Estonian Air and Air Baltic might keep names and livery intact.
Always keep your number of landings equal to your number of take-offs

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