Vastus

Henrik MORCH Your Ref: 28.07.2022 No (2022)5953019 European Commission B-1049, Brussels Our Ref: 21.09.2022 No 24.1-1/2022/4881- 2 BELGIUM Response to the questionnaire on potential air connectivity loss Dear Mr/Ms Morch, Please find below the answers to your questionnaire on potential air connectivity loss. 1. Please provide any data or information on connectivity loss in comparison to the pre- Covid period, that your authorities may find relevant (in light of the definitions of air connectivity loss above). Please indicate what are the main reasons for the connectivity loss to date (Covid, others?). In particular, please indicate whether there has been a reduction in demand for air travel, in the different customer segments (leisure travel, visiting friends and relatives “VFR”, business travel). Compared to 2019, significant changes have taken place related to the flight connections to and from Tallinn Airport as Estonia's main airport in 2022. On most routes, the number of carriers and the frequency of connections have decreased significantly (paragraphs 2 and 3 of the definitions of air connectivity loss in your letter). The air connectivity loss had started with the travel restrictions related to the COVID-19 pandemic and the decreased number of passengers, and continued with some changes in the passenger profile. During the recovery of flights after the lifting of travel restrictions, flights have not been re- started on some routes (paragraph 1 of the definition of air connectivity loss) due to sanctions and war in Ukraine (namely Minsk, Moscow, also Kyiv). More detailed information about the loss of connections1 is listed below:  Tallinn-Brussels-Tallinn: number of carriers and frequency of connections have decreased. One carrier has stopped serving the route, reasons were not related to the pandemic. The only carrier remaining on the route has not increased frequencies to the same extent. The number of connections has decreased more than twice;  Tallinn-Berlin-Tallinn: number of carriers and frequency of connections have decreased, which is linked to the drop in demand caused by the pandemic related travel restrictions. The 1 The statistics presented in the letter based on the data provided by Tallinn Airport as of September 1, 2022 Suur-Ameerika 1 / 10122 Tallinn / ESTONIA Phone: +372 625 6342 / Fax: +372 631 3660 / E-mail: [email protected] / http://www.mkm.ee  number of flights has decreased almost twice. It is estimated that the decrease in demand has mainly occurred in the leisure travels (city-break) segment;  Tallinn-Copenhagen-Tallinn: number of carriers and frequency of connections have decreased. One carrier has stopped the flights, reasons were not related to the pandemic. One carrier serving the route has significantly reduced the number of the flights due to a change in demand due to the pandemic. The number of connections has decreased four times. It is estimated that a drop in demand has occurred mainly in the transfer segment of passengers;  Tallinn-London-Tallinn: volume of connections has decreased by approximately two times. One carrier (easyJet) has stopped serving the route as a result of reduced demand and profitability due to the pandemic. It is estimated that the decrease in demand has mainly occurred in the leisure (city-break) segment;  Tallinn-Oslo-Tallinn: number of connections has decreased due to the change in demand caused by the travel restrictions and the reduction in frequencies of the main carrier on the route. It is estimated that the decrease in demand has mainly occurred in the city-break segment;  Tallinn-Stockholm-Tallinn: connections has decreased twice due to a change of carriers, which was not related to the pandemic. It is estimated that the decrease in demand has mainly occurred in the segment of business travels;  Tallinn-Kyiv-Tallinn flights were suspended due to pandemic related travel restrictions but was re-started in April 2021. The connection with Kyiv was stopped due to war in February 2022;  Tallinn-Minsk-Tallinn flights were suspended in September 2020 due to the pandemic related travel restrictions and has not been re-started due to the political restrictions related to the war in Ukraine;  Tallinn-Moscow-Tallinn flights were suspended in March 2020 due to the pandemic related travel restrictions and has not been re-started due to political restrictions related to the war in Ukraine. 2. Please provide in particular a list of intra-EU+1 routes that were lost due to Covid but have currently not been re-started by any airline. Please indicate what are the main reasons for the route closure (e.g. lack of demand, low profitability, airline bankruptcy, modal shift to rail/road, airport closure, closure of airport base by an airline, others?). Please indicate the socio-economic impacts of these route closures. No connections to or from Tallinn have been permanently lost due to Covid. 3. Please indicate whether certain intra-EU+ routes are currently operated by significantly fewer airlines than pre-Covid. Please provide examples/data. Please indicate what are the main reasons for such reduced competition. Please indicate the socio-economic impacts of that potential reduced competition. Due to the pandemic, one air carrier (easyJet) ended cooperation with Tallinn Airport. The reason was the lower demand due to travel restrictions, which did not ensure sufficient profitability of route, and related changes in the strategy of the air carrier. Before the pandemic, this air carrier served the following three intra-EU routes from Tallinn:  Tallinn-Milan-Tallinn: after the easyJet flights were ceased, a new carrier started operating the route; as a conclusion, the number of carriers remained the same; 2 (6)   Tallinn-Berlin-Tallinn: the number of air carriers has been decreased, with two air carriers operating until the end of the summer schedule;  Tallinn-London-Tallinn: number of air carriers has been decreased, currently two carriers operate the route. Considering the changes that have taken place in the operation of the aforementioned flight routes, the competitive situation on these routes generally remains in balance with the current demand. 4. Please indicate whether airlines decreased frequency on the intra-EU+ routes they currently operate compared to the frequency pre-Covid. Please provide examples/data. Please indicate what are the main reasons such reduced frequency. Please indicate the socio-economic impacts of that potential reduced frequency. Due to the pandemic, several air carriers have reduced frequencies on intra-EU routes and due to changes in the passenger segment (decrease of business passengers and passengers on transfer on some routes), previous frequencies have not recovered.  Tallinn-Berlin-Tallinn: AirBaltic has reduced the number of flights twice. While in 2019 the air carrier operated an average of 4 flights per week, in 2022 it operates an average of 2 flights per week. It is estimated that the decrease in demand has mainly occurred in the leisure travellers (city-break) segment;  Tallinn-Copenhagen-Tallinn: Scandinavian Airlines has significantly reduced its flights. While in 2019 the air carrier operated an average of 11 flights per week, in 2022 it operates an average of 2 flights per week. It is estimated that the decrease in demand is mainly in the transfer segment;  Tallinn-Oslo-Tallinn: Norwegian has significantly reduced the number of flights. While in 2019 the air carrier operated an average of 7 flights per week, in 2022 it operates an average of 3 flights per week. It is estimated that the decrease in demand is mainly in the leisure travellers (city-break) segment;  Tallinn-Riga-Tallinn: number of flights has been decreased from 36 flights per week in 2019 to an average of 24 flights per week in 2022. The route is operated by AirBaltic. It is estimated that the decrease in demand is mainly in the transfer segment;  Tallinn-Stockholm-Tallinn: AirBaltic has significantly reduced the number of flights. While in 2019 the air carrier operated an average of 12 flights per week, in 2022 it operates an average of 2 flights per week. It is estimated that the decrease in demand is mainly in the business segment;  To a lesser extent, the number of flights has also decreased on several other routes (e.g. Vienna, Warsaw, Helsinki, etc.), but this is related to the recovery of general demand and to some extent also the capacity constraints of larger European airports (e.g. Frankfurt) in summer 2022. 5. Please explain how airlines currently use the extra capacities that became available due to route closures or reduced frequency. In particular, please explain whether airlines redeployed those extra capacities to open new routes or increase frequencies on existing routes. Please provide examples/data. 3 (6) While the number of scheduled flights to and from Tallinn airport has decreased by 30% compared to the pre-pandemic period, the number of seats available for sale has decreased by only 13%. This is due to the fact that larger aircraft are being used compared to the past. Such change is related, on the one hand, to the change in market shares of air carriers and on the other hand (e.g. AirBaltic) to the transition to a one-type aircraft fleet consisting of larger aircraft. For example, in the case of AirBaltic, the number of their flights has decreased by 25%, while the number of seats has increased by 15%. With fewer flights, it is possible to serve more passengers, which supports air carriers' efficiency and lower environmental impact. Compared to the period before the pandemic, the number of regularly served routes from Tallinn Airport has remained practically the same, but the frequency of flights has decreased. In July 2019, there were regular flights to 36 destinations, in the same period in 2022 to 35 destinations. The loss of some destinations was not only related to the effects of the Covid. Due to the pandemic, the operation of any intra-EU flight from Tallinn has not been permanently lost. During the post-pandemic aviation recovery period, the following regular routes have been added, some of which are seasonal: • Swiss: Zurich; • Lufthansa: Munich; • Ryanair: Barcelona, Billund, Liverpool, Nuremberg, Rome, Paris, Stockholm, Vienna, Treviso (from November 2022); • WizzAir: Milan, Naples, Oslo, Rome, Venice, London (from November 2022); • AirBaltic: Munich, Nice; • Pegasus: Antalya; • Sunexpress: Antalya. Frequencies have been added to the existing routes: • AirBaltic: Brussels, Copenhagen, Malaga; • Ryanair: Berlin, Milan, Malta. 6. Please explain whether your authorities identified certain patterns in the air connectivity loss (e.g. type of routes concerned, countries most affected, categories of airports concerned, type of airlines that interrupted/reduced their operations, etc.). According to the data shared by Tallinn Airport, the decrease in demand has been observed on the routes previously used primarily by business travellers (especially Tallinn-Vilnius and Tallinn- Stockholm), where air travel for the work within the corporation has often been replaced by virtual work arrangements. There has also been a decrease in the number of traveling for leisure purposes in the city-break segment (e.g. Berlin, Vienna, Tallinn), with a preference for southern European destinations (Spain, Italy, Turkey). For the development of new connections and sustainable operations, the sales power of the air carriers in a specific market is more important than before. This puts regional carriers operating flights to and from airports with a small catchment area in a difficult position. There has been a numerical increase of the routes where flights to destinations are operated by air carriers, whose flights may primarily be suitable for leisure travellers flying from point a to point b and who prefer a low fare ticket price or passengers visiting friends and relatives. However, such 4 (6) business model generally does not offer the time convenience required for a business traveller (departure, transfers, total time spent on the journey). Also, such routes do not offer a reasonable transfer option or certainty in the sustainable operation in today's changing and pressurising economic situation. 7. Please provide your authorities’ views on the medium-term and long-term evolution of air connectivity (in terms of route closure, reduced competition or reduced frequency on certain routes) and what will be the main drivers of that evolution. Please indicate the anticipated medium term socio-economic impacts of the expected evolution of air connectivity. Estonia is located away from the central Europe, therefore the sustainability of air connections is lively important for Estonia. Estonian aviation environment can be characterized by a small catchment area and a peripheral location (a large part of Estonia's national border is also the external border of the EU), which combined means that scheduled flights to and from Estonia are often not profitable for air carriers, and existing connections are tied to home bases and direct interests of the air carriers, which may not comprehensively take into account the needs of passengers flying to and from Estonia. Although the summer of 2022 has shown a very positive air traffic recovery, the current geopolitical situation in Europe and, among other things, the resulting economic effects may have a negative impact on the recovery of air traffic to Estonia in the near future. The current labour shortage, high inflation, rising costs (in particular fuel) and possible continuing travel restrictions related to the pandemic may reduce the profitability of air carriers in the short term, which may also result in a reduction in flights and the consequent reduction in connections. The recovery of air traffic will also be affected by the return to previous levels of travel related to business trips, leisure trips and visiting friends and relatives. Air travel will remain important, as statistics showing the rapid recovery in aviation indicate a strong desire to travel after the pandemic. At the same time, air traffic volumes and frequencies are affected by the general economic situation. In the longer term, the development of air traffic will also be influenced by infrastructure and environmental constraints, which are already a significant limitation to growth at Europe's major airports. 8. Please indicate whether your authorities see a need for public intervention to address the potential connectivity loss and if yes under which form. In particular, please explain whether the available instruments (i.e. under State aid rules and PSO rules) are sufficient to address the potential connectivity loss and if not which change should be made. We have previously expressed the view that the existing measures enabling state intervention do not cover all real needs and that connectivity continues to be fragile in certain parts of Europe (incl. Estonia). Limited connectivity is relevant mainly in the peripheral EU member states with small populations. Existing market measures are not sufficient in all circumstances to create viable sustainable air connectivity to meet the needs of passengers travelling for business, leisure and visiting friends and relatives in all circumstances. The main problem is the lack of high-quality direct connections (including at times suitable for business travellers and direct flights to cities connected to the headquarters). The recovery of international transport connections that promote travel, the development of new connections and the continuous development of the network are also essential for the restart of 5 (6) international travel and the export of tourism services. Direct flights with sufficient frequency, as well as other air connections to and from Estonia, are of key importance for Estonia to be well connected to key target markets. Therefore, we consider it important to find a constructive and sustainable comprehensive solution that will allow the state to increase the number of connections not only at the expense of state budget support, but would also allow improving air connections horizontally. The problem is not only the need to increase the number of connections. As explained in the responses above, much of the air traffic has recovered since the pandemic, and both flights and passengers’ numbers from Tallinn to destination of importance for Estonia have increased. At the same time, however, both Estonian and foreign traditional carriers, faced with increased competition and non-standard pricing policies, have significantly changed or reduced the timing of departures to/from Tallinn, or have stopped them altogether, based on the commercial interest of the air carrier and the availability of aircraft. With best regards, (signed digitally) Ahti Kuningas Deputy Secretary General for Transport in the capacity of Secretary General Copy to: Mr Mark Chovino, [email protected] Mr Tarik Draidj, [email protected] Mr Carsten Vennemann, [email protected] Silja Vöörmann +372 625 6315 [email protected] 6 (6) Henrik MORCH Your Ref: 28.07.2022 No (2022)5953019 European Commission B-1049, Brussels Our Ref: 21.09.2022 No 24.1-1/2022/4881- 2 BELGIUM Response to the questionnaire on potential air connectivity loss Dear Mr/Ms Morch, Please find below the answers to your questionnaire on potential air connectivity loss. 1. Please provide any data or information on connectivity loss in comparison to the pre- Covid period, that your authorities may find relevant (in light of the definitions of air connectivity loss above). Please indicate what are the main reasons for the connectivity loss to date (Covid, others?). In particular, please indicate whether there has been a reduction in demand for air travel, in the different customer segments (leisure travel, visiting friends and relatives “VFR”, business travel). Compared to 2019, significant changes have taken place related to the flight connections to and from Tallinn Airport as Estonia's main airport in 2022. On most routes, the number of carriers and the frequency of connections have decreased significantly (paragraphs 2 and 3 of the definitions of air connectivity loss in your letter). The air connectivity loss had started with the travel restrictions related to the COVID-19 pandemic and the decreased number of passengers, and continued with some changes in the passenger profile. During the recovery of flights after the lifting of travel restrictions, flights have not been re- started on some routes (paragraph 1 of the definition of air connectivity loss) due to sanctions and war in Ukraine (namely Minsk, Moscow, also Kyiv). More detailed information about the loss of connections1 is listed below:  Tallinn-Brussels-Tallinn: number of carriers and frequency of connections have decreased. One carrier has stopped serving the route, reasons were not related to the pandemic. The only carrier remaining on the route has not increased frequencies to the same extent. The number of connections has decreased more than twice;  Tallinn-Berlin-Tallinn: number of carriers and frequency of connections have decreased, which is linked to the drop in demand caused by the pandemic related travel restrictions. The 1 The statistics presented in the letter based on the data provided by Tallinn Airport as of September 1, 2022 Suur-Ameerika 1 / 10122 Tallinn / ESTONIA Phone: +372 625 6342 / Fax: +372 631 3660 / E-mail: [email protected] / http://www.mkm.ee  number of flights has decreased almost twice. It is estimated that the decrease in demand has mainly occurred in the leisure travels (city-break) segment;  Tallinn-Copenhagen-Tallinn: number of carriers and frequency of connections have decreased. One carrier has stopped the flights, reasons were not related to the pandemic. One carrier serving the route has significantly reduced the number of the flights due to a change in demand due to the pandemic. The number of connections has decreased four times. It is estimated that a drop in demand has occurred mainly in the transfer segment of passengers;  Tallinn-London-Tallinn: volume of connections has decreased by approximately two times. One carrier (easyJet) has stopped serving the route as a result of reduced demand and profitability due to the pandemic. It is estimated that the decrease in demand has mainly occurred in the leisure (city-break) segment;  Tallinn-Oslo-Tallinn: number of connections has decreased due to the change in demand caused by the travel restrictions and the reduction in frequencies of the main carrier on the route. It is estimated that the decrease in demand has mainly occurred in the city-break segment;  Tallinn-Stockholm-Tallinn: connections has decreased twice due to a change of carriers, which was not related to the pandemic. It is estimated that the decrease in demand has mainly occurred in the segment of business travels;  Tallinn-Kyiv-Tallinn flights were suspended due to pandemic related travel restrictions but was re-started in April 2021. The connection with Kyiv was stopped due to war in February 2022;  Tallinn-Minsk-Tallinn flights were suspended in September 2020 due to the pandemic related travel restrictions and has not been re-started due to the political restrictions related to the war in Ukraine;  Tallinn-Moscow-Tallinn flights were suspended in March 2020 due to the pandemic related travel restrictions and has not been re-started due to political restrictions related to the war in Ukraine. 2. Please provide in particular a list of intra-EU+1 routes that were lost due to Covid but have currently not been re-started by any airline. Please indicate what are the main reasons for the route closure (e.g. lack of demand, low profitability, airline bankruptcy, modal shift to rail/road, airport closure, closure of airport base by an airline, others?). Please indicate the socio-economic impacts of these route closures. No connections to or from Tallinn have been permanently lost due to Covid. 3. Please indicate whether certain intra-EU+ routes are currently operated by significantly fewer airlines than pre-Covid. Please provide examples/data. Please indicate what are the main reasons for such reduced competition. Please indicate the socio-economic impacts of that potential reduced competition. Due to the pandemic, one air carrier (easyJet) ended cooperation with Tallinn Airport. The reason was the lower demand due to travel restrictions, which did not ensure sufficient profitability of route, and related changes in the strategy of the air carrier. Before the pandemic, this air carrier served the following three intra-EU routes from Tallinn:  Tallinn-Milan-Tallinn: after the easyJet flights were ceased, a new carrier started operating the route; as a conclusion, the number of carriers remained the same; 2 (6)   Tallinn-Berlin-Tallinn: the number of air carriers has been decreased, with two air carriers operating until the end of the summer schedule;  Tallinn-London-Tallinn: number of air carriers has been decreased, currently two carriers operate the route. Considering the changes that have taken place in the operation of the aforementioned flight routes, the competitive situation on these routes generally remains in balance with the current demand. 4. Please indicate whether airlines decreased frequency on the intra-EU+ routes they currently operate compared to the frequency pre-Covid. Please provide examples/data. Please indicate what are the main reasons such reduced frequency. Please indicate the socio-economic impacts of that potential reduced frequency. Due to the pandemic, several air carriers have reduced frequencies on intra-EU routes and due to changes in the passenger segment (decrease of business passengers and passengers on transfer on some routes), previous frequencies have not recovered.  Tallinn-Berlin-Tallinn: AirBaltic has reduced the number of flights twice. While in 2019 the air carrier operated an average of 4 flights per week, in 2022 it operates an average of 2 flights per week. It is estimated that the decrease in demand has mainly occurred in the leisure travellers (city-break) segment;  Tallinn-Copenhagen-Tallinn: Scandinavian Airlines has significantly reduced its flights. While in 2019 the air carrier operated an average of 11 flights per week, in 2022 it operates an average of 2 flights per week. It is estimated that the decrease in demand is mainly in the transfer segment;  Tallinn-Oslo-Tallinn: Norwegian has significantly reduced the number of flights. While in 2019 the air carrier operated an average of 7 flights per week, in 2022 it operates an average of 3 flights per week. It is estimated that the decrease in demand is mainly in the leisure travellers (city-break) segment;  Tallinn-Riga-Tallinn: number of flights has been decreased from 36 flights per week in 2019 to an average of 24 flights per week in 2022. The route is operated by AirBaltic. It is estimated that the decrease in demand is mainly in the transfer segment;  Tallinn-Stockholm-Tallinn: AirBaltic has significantly reduced the number of flights. While in 2019 the air carrier operated an average of 12 flights per week, in 2022 it operates an average of 2 flights per week. It is estimated that the decrease in demand is mainly in the business segment;  To a lesser extent, the number of flights has also decreased on several other routes (e.g. Vienna, Warsaw, Helsinki, etc.), but this is related to the recovery of general demand and to some extent also the capacity constraints of larger European airports (e.g. Frankfurt) in summer 2022. 5. Please explain how airlines currently use the extra capacities that became available due to route closures or reduced frequency. In particular, please explain whether airlines redeployed those extra capacities to open new routes or increase frequencies on existing routes. Please provide examples/data. 3 (6) While the number of scheduled flights to and from Tallinn airport has decreased by 30% compared to the pre-pandemic period, the number of seats available for sale has decreased by only 13%. This is due to the fact that larger aircraft are being used compared to the past. Such change is related, on the one hand, to the change in market shares of air carriers and on the other hand (e.g. AirBaltic) to the transition to a one-type aircraft fleet consisting of larger aircraft. For example, in the case of AirBaltic, the number of their flights has decreased by 25%, while the number of seats has increased by 15%. With fewer flights, it is possible to serve more passengers, which supports air carriers' efficiency and lower environmental impact. Compared to the period before the pandemic, the number of regularly served routes from Tallinn Airport has remained practically the same, but the frequency of flights has decreased. In July 2019, there were regular flights to 36 destinations, in the same period in 2022 to 35 destinations. The loss of some destinations was not only related to the effects of the Covid. Due to the pandemic, the operation of any intra-EU flight from Tallinn has not been permanently lost. During the post-pandemic aviation recovery period, the following regular routes have been added, some of which are seasonal: • Swiss: Zurich; • Lufthansa: Munich; • Ryanair: Barcelona, Billund, Liverpool, Nuremberg, Rome, Paris, Stockholm, Vienna, Treviso (from November 2022); • WizzAir: Milan, Naples, Oslo, Rome, Venice, London (from November 2022); • AirBaltic: Munich, Nice; • Pegasus: Antalya; • Sunexpress: Antalya. Frequencies have been added to the existing routes: • AirBaltic: Brussels, Copenhagen, Malaga; • Ryanair: Berlin, Milan, Malta. 6. Please explain whether your authorities identified certain patterns in the air connectivity loss (e.g. type of routes concerned, countries most affected, categories of airports concerned, type of airlines that interrupted/reduced their operations, etc.). According to the data shared by Tallinn Airport, the decrease in demand has been observed on the routes previously used primarily by business travellers (especially Tallinn-Vilnius and Tallinn- Stockholm), where air travel for the work within the corporation has often been replaced by virtual work arrangements. There has also been a decrease in the number of traveling for leisure purposes in the city-break segment (e.g. Berlin, Vienna, Tallinn), with a preference for southern European destinations (Spain, Italy, Turkey). For the development of new connections and sustainable operations, the sales power of the air carriers in a specific market is more important than before. This puts regional carriers operating flights to and from airports with a small catchment area in a difficult position. There has been a numerical increase of the routes where flights to destinations are operated by air carriers, whose flights may primarily be suitable for leisure travellers flying from point a to point b and who prefer a low fare ticket price or passengers visiting friends and relatives. However, such 4 (6) business model generally does not offer the time convenience required for a business traveller (departure, transfers, total time spent on the journey). Also, such routes do not offer a reasonable transfer option or certainty in the sustainable operation in today's changing and pressurising economic situation. 7. Please provide your authorities’ views on the medium-term and long-term evolution of air connectivity (in terms of route closure, reduced competition or reduced frequency on certain routes) and what will be the main drivers of that evolution. Please indicate the anticipated medium term socio-economic impacts of the expected evolution of air connectivity. Estonia is located away from the central Europe, therefore the sustainability of air connections is lively important for Estonia. Estonian aviation environment can be characterized by a small catchment area and a peripheral location (a large part of Estonia's national border is also the external border of the EU), which combined means that scheduled flights to and from Estonia are often not profitable for air carriers, and existing connections are tied to home bases and direct interests of the air carriers, which may not comprehensively take into account the needs of passengers flying to and from Estonia. Although the summer of 2022 has shown a very positive air traffic recovery, the current geopolitical situation in Europe and, among other things, the resulting economic effects may have a negative impact on the recovery of air traffic to Estonia in the near future. The current labour shortage, high inflation, rising costs (in particular fuel) and possible continuing travel restrictions related to the pandemic may reduce the profitability of air carriers in the short term, which may also result in a reduction in flights and the consequent reduction in connections. The recovery of air traffic will also be affected by the return to previous levels of travel related to business trips, leisure trips and visiting friends and relatives. Air travel will remain important, as statistics showing the rapid recovery in aviation indicate a strong desire to travel after the pandemic. At the same time, air traffic volumes and frequencies are affected by the general economic situation. In the longer term, the development of air traffic will also be influenced by infrastructure and environmental constraints, which are already a significant limitation to growth at Europe's major airports. 8. Please indicate whether your authorities see a need for public intervention to address the potential connectivity loss and if yes under which form. In particular, please explain whether the available instruments (i.e. under State aid rules and PSO rules) are sufficient to address the potential connectivity loss and if not which change should be made. We have previously expressed the view that the existing measures enabling state intervention do not cover all real needs and that connectivity continues to be fragile in certain parts of Europe (incl. Estonia). Limited connectivity is relevant mainly in the peripheral EU member states with small populations. Existing market measures are not sufficient in all circumstances to create viable sustainable air connectivity to meet the needs of passengers travelling for business, leisure and visiting friends and relatives in all circumstances. The main problem is the lack of high-quality direct connections (including at times suitable for business travellers and direct flights to cities connected to the headquarters). The recovery of international transport connections that promote travel, the development of new connections and the continuous development of the network are also essential for the restart of 5 (6) international travel and the export of tourism services. Direct flights with sufficient frequency, as well as other air connections to and from Estonia, are of key importance for Estonia to be well connected to key target markets. Therefore, we consider it important to find a constructive and sustainable comprehensive solution that will allow the state to increase the number of connections not only at the expense of state budget support, but would also allow improving air connections horizontally. The problem is not only the need to increase the number of connections. As explained in the responses above, much of the air traffic has recovered since the pandemic, and both flights and passengers’ numbers from Tallinn to destination of importance for Estonia have increased. At the same time, however, both Estonian and foreign traditional carriers, faced with increased competition and non-standard pricing policies, have significantly changed or reduced the timing of departures to/from Tallinn, or have stopped them altogether, based on the commercial interest of the air carrier and the availability of aircraft. With best regards, (signed digitally) Ahti Kuningas Deputy Secretary General for Transport in the capacity of Secretary General Copy to: Mr Mark Chovino, [email protected] Mr Tarik Draidj, [email protected] Mr Carsten Vennemann, [email protected] Silja Vöörmann +372 625 6315 [email protected] 6 (6)