Saaremaa, Hiiumaa cite law of supply and demand in calls for cheaper air fares

Saaremaa, Hiiumaa cite law of supply and demand in calls for cheaper air fares
Estonia's two largest islands, Saaremaa and Hiiumaa want cheaper flights to Tallinn, citing falling demand.
The decline in passenger numbers is currently not a sufficient argument for lowering prices, said Regional Affairs Minister Hendrik Johannes Terras (Eesti 200).

The mayors of both islands see it that the ticket price rise has reduced passenger numbers so significantly that fares should be brought back to the 2024 levels. This would mean that a round-trip ticket to Tallinn would cost €60 to/from Kuressaare (Saaremaa, current price €72) and €56 to/from Kärdla (Hiiumaa, currently €68).
Hiiumaa mayor Hergo Tasuja (SDE) told ERR: "In January 2024 there were nearly 900 passengers on the Kärdla–Tallinn route, and in January of this year there were 632 — a fairly substantial drop following the price increases. And if we take into account that, according to the procurement conditions, ticket revenue goes to the state, then I truly don't understand how this mathematics has not been grasped — that lowering the ticket price and thereby increasing aircraft occupancy would not reduce state revenues."

"We will see how the share of passengers recovers; if in the long term it really remains like this, then it can be discussed again. But changes in public transport always involve a long time lag, and that must be taken into account," Terras explained. The minister also pointed out that the state already heavily subsidizes travel between the islands to keep it affordable."The state pays roughly €120 per air passenger, of which €36 is the passenger's own contribution — meaning the state currently covers about 80 percent of each flight. Bus companies have also pointed out that if airline tickets are priced so low, a Kuressaare–Tallinn route operating on market terms is not competitive for them. If bus operators have to cut services, the overall service available to island residents actually worsens," Terras said.
Saaremaa mayor Rainer Antsaar (Isamaa) meanwhile says he does not consider it realistic that people who have previously flown have switched to buses due to the price increase. In his view, those people are now more likely traveling to the islands by car ferry.
Tasuja also denied buses were major competitors to air travel. "Any person who has the flexibility to manage their time will in any case choose the bus connection, because the twofold price difference that once existed was already significant — today that difference is threefold."

Despite the lack of a positive response from the ministry for now, the larger islands are not giving up. Tasuja pledged to continue making the case. "When the minister took office and visited Hiiumaa quite early in his term, it seemed to me that he understood these reasons and arguments quite well. But after a few months it felt as though the ministry had talked him out of it — what initially seemed reasonable no longer did," he said.
There are daily flights from Tallinn to both Hiiumaa and Saaremaa, operated by NyxAir.
Island connections have also been brought into sharp focus this winter, when the most extensive sea ice for more than a decade hampered ferry connections, and in the case of some of the smaller islands, led to residents being cut of from the mainland altogether.
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Editor: Andrew Whyte










