Estonian Air (Tallinn Lennart Meri) has terminated its Flight Services and Commercial Agreement with Air Lituanica (Vilnius) with effect from November 27.
“Air Lituanica has repeatedly and, on an ongoing basis, failed to meet its payment obligations towards Estonian Air as set forth in our agreements,” explained Jan Palmér, the CEO of Estonian Air. “Estonian Air has been forced to terminate the contracts due to these breaches by Air Lituanica – breaches that have not been cured in spite of continuous talks and settlement proposals by Estonian Air."
Under the terms of the airlines' Flight Services Agreement (FSA), Estonian Air was to provide flight services to Air Lituanica with one E170, ES-AEB (cn 17000106), until the end of 2015. The aircraft was used for dedicated flights from Vilnius to Amsterdam Schiphol and Berlin Tegel.
In its response, Air Lituanica said it was "astonished" at the Estonian's move. Said CEO Erikas Zubrus: “Upon unilateral termination of the contract by Estonian Air, they left indebted to us – Air Lituanica – LTL5.7million (USD2.244million) for already transported passengers and deposits paid."
Zubrus went on to claim that the success of the airline's Amsterdam flight had been made possible by Air Lituanica with the Estonians benefiting immensely from the route. He ended by stating that Air Lituanica "demands the redemption of the debt and, if not, will apply extreme measures."
