Estonia's favorite soap opera: SAS and Estonian Air

Please, Mr. Ansip, sell your shares.

Estonian media reports that SAS would be interested in buying the 34% stake belonging to the Estonian state in Estonia's national carrier Estonian Air. In the past months, Estonian government members have voiced concern at the performance of Estonian Air, some suggesting it might better suit Estonia’s image to be rid of the airline.

Often, it seems that government members point the finger of blame at SAS, rather than the company’s management. Despite majority ownership, just how much control SAS really exerts over the airline is unclear. State-owned enterprises are subject to interference and meddling from a variety of people who know little or nothing about the businesses they are playing with (see our April issue on Estonian Railways). Would the airline benefit from the absence of Estonian state ownership? Almost certainly. But then one must ask: Would the government demand to have it back once SAS, in total control to make changes, fixed it?

The Estonian state owns 37% of shares in Estonian Air, SAS holds 49%, and the investment bank Cresco has 17%.