Estonia’s national airline Estonian Air declared itself bankrupt last week after the European Commission decided state funding the company had received was illegal and should be repaid, The Baltic Times reported today. It claims that it does not have the money to repay the funding. More than 20,000 tickets will now be refunded and 6.2 million euros have been put aside by the state to repay customers. The commission started its investigation in 2013 and opened a second in 2014 after the government paid Estonian Air around 125 million euros — 90 million euros of which has already been paid — to keep it in the air. Under EU rules a company must not receive money from the state that give it a competitive edge over other companies. The rules state that a company can also only receive one set of funding every 10 years — but the commission said Estonian Air had had three lots. The commission’s outcome means that the airline has to pay back all the funding plus interest — which it is unable to do. Estonian Air was set up 24 years ago as the state airline. It helped the small, newly independent nation reestablish ties with the west after the crumbling of the Soviet Union. It carried around 500,000 people annually and employed about 200 staff members.
