Copterline: Continuation of Tallinn flights depends on customer response

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Passenger helicopter company Copterline is to re-launch its Saturday flights between Helsinki and Tallinn in mid-November. Currently, they operate Helsinki-Tallinn route flights only from Monday to Friday.
      According to Managing Director Kari Ljungberg, these additional flights are part of the company's plan to rescue their Tallinn traffic. Unless there are more profits and reduced expenditure, the company will face ending its scheduled traffic between Helsinki and Tallinn.
      "Passengers and customers will have to decide whether or not this service is needed", says Ljungberg.
     
Copterline's difficulties began on August 10th, when one of the company's Sikorsky 76C+ helicopters went down in the sea some five kilometres from Tallinn, the Estonian capital. All 14 people on board were killed.
      Since the incident, only one of the company's helicopters has been flying the scheduled Helsinki-Tallinn route. The number of departures was reduced, and the seats were not taken up because passengers were afraid.
      Prior to the accident, about 1,300 to 1,500 passengers were carried on the Helsinki-Tallinn route each week - an average of 8.5 passengers per departure.
      After the August crash, the average dropped to three passengers per flight, and when some departures were cancelled, the weekly number of passengers could be as low as 300.
     
The helicopter operator started to make huge losses after having had a very good year until then. The losses initially amounted to between EUR 70,000 and 100,000 a week.
      A number of cost-saving measures were implemented right away. Nevertheless, on October 20th, the company announced that they were to start lay-off talks.
      At the same time, some signs of recovery were already being seen, according to Ljungberg. Passenger numbers picked up again in October, and last week the average capacity utilisation was slightly more than four passengers per flight - almost 500 a week.
      The weekly losses had dropped to EUR 35,000.
     
Copterline is trying to get additional profits by re-launching its Saturday flights in mid-November, says Ljungberg, and gradually the company plans to take up even its Sunday flights. "One weekend per month will be reserved for maintenance".
      Copterline has 70 permanent employees. Ljungberg estimates that the company will not be able to avoid dismissals, lay-offs, and the turning of some posts into part-time jobs. However, no warnings to staff have been issued so far.
      According to Ljungberg, the present passenger numbers - about 500 a week - predict a zero result for 2005, because the weak second half of the year will eat the profits made in the course of the strong first two quarters.
     
From January, the high-speed ferries will be out of service over the winter, and Copterline's traditional high season begins.
      "Our customers are to make the decision. If the owners do not have faith in the recovery of the market, Copterline's helicopter services will be closed down", says Ljungberg.
      "There is no sense in eating up the capital we have gathered over the years unless we can trust that we will be able to claw it back."
      Ljungberg notes that the company's own capital - Copterline's old profits - amounts to around EUR 10 million. Almost half of the sum belongs to him and his family, and 15% to CapMan, one of the leading private equity investors in the Nordic countries.
     
In 2004, Copterline recorded a turnover of EUR 14 million, making a profit of almost EUR 2 million. The company began flights between the two capitals in 2000, and broke into profit on the run in 2002. Any decision to terminate the route would mean at least a year's gap before another operator could secure the necessary licences.
      Apart from the route flights between Helsinki and Tallinn, Copterline operates EMS and SAR helicopters, among others, based in Oulu, Vaasa, and Varkaus.


Previously in HS International Edition:
  Technical fault discovered in crashed Copterline helicopter (21.10.2005)

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