A few thoughts from the recent aviation conference in Estonia. When you have a challenge to develop Aviation Economy and all odds are against you, what could be a practical way? Some ideas on it, which could be applicable to any small developing nation.

1. The Aviation Quandary
Developing an Aviation Economy
The Future of Aviation Industry… in Estonia
Jonas Butautis, CEO

2. WHY THIS TOPIC?
Quandary
[kwon-duh-ree, -dree]
A state of perplexity or uncertainty, especially as to what to
do. (dictionary.com)
What is Estonia’s ‘aviation identity’?
 Impact of Aviation on national GDP; Why Care?
 Features of ‘Aviation Countries’; What Works?
 Roadmap to Finding Identity; Ideas for Action.

3. DEFINING AVIATION
Airlines
 FSCs, LCCs, Charter, Cargo, mixed business models
Ground Services
 Airports, Ground Handling, Retail, Catering, Ticketing,
Cargo Services, MROs, Navigation, Regulators, etc.
Financial Services
 Leasing Companies, Aviation Assets Investment
Vehicles
Aviation is a complex Organic Business Ecosystem with a
number of inter-related players

4. IMPACT OF AVIATION ON GDP
Global
 $ 2.4 trillion aviation Global economic impact (direct and indirect)
 3.4% of Global GDP is supported by aviation
 On average, aviation jobs are 3.6 x more productive than other jobs
National Example. Ireland
 € 4.1 billion direct contribution to national GDP, 2.6%
 54k aviation related jobs, 2.8%, 40% premium salaries
National Example. Singapore
 SG$ 8.7 billion direct contribution to national GDP, 3%
 58k aviation related jobs
If Estonia had a per capita-scaled Aviation industry comparable to Ireland,
aviation related businesses could contribute € 1,2b or 7% of Estonian GDP

5. WHAT WORKS (I OF II)
Political Focus
 Aviation is a ‘war’ of nations (Turkey, UAE,
Singapore, Ireland, UK, etc.). Country-wide Strategy
and political will for execution is needed
Legislation
 Corporate tax rates, allowed interest deductibles,
double taxation treaties, VAT exemptions, asset
depreciation rules, custom clearance procedures,
expat employees income tax reductions, etc.
Supply of Skilled and Certified People
 Academies and vocational schools working hand in
hand with business to supply thousands of skilled
employees. Technical skills are crucial, more than
the need for higher education

6. WHAT WORKS (II)
Financial Infrastructure
 Banks and funds open to finance aviation projects.
Aviation know-how present among financial analysts.
National Regulation and Aircraft Registry
 Local CAA as business oriented, service organization.
Flexibility, speed, professionalism, security, cost
efficiency.
Support of Home Airline to Drive the Industry
 Singapore Airlines, Turkish Airlines, Qatar, Emirates,
Etihad, etc.
Other Government-backed Benefits
 Local or national government financing Hangars
 Free Economic Zones
 Investment support programs for Greenfield Investors
 Targeted Country Promotion to Aviation Community

7. ROADMAP TO FINDING
ESTONIAN AVIATION IDENTITY
Political Will
 Clear Country Positioning and Aviation Strategy
Formulated with ownership of execution
Review of Aviation-Centred Legislation
 Corporate tax rates, allowed interest deductibles,
double taxation treaties, VAT exemptions, asset
depreciation rules, custom clearance procedures, expat
employees income tax reductions, etc.
Positioning Estonia for Aviation Investors
 Approaching OEMs, MROs, manufacturers, support
services, leasing companies, other asset owners
Fighting for every Aviation Project
 Step by step, create an aviation cluster

8. IDEAS TO CONSIDER
Maintenance, Repair, and Overhaul (MRO)
 Airframe Heavy Maintenance, Painting Facilities, Engine
Overhaul Shops, Component Repair Shops, etc.
OEM Manufacturing
 OEM owned and run production or assembly facilities
Promotion of Aircraft Register
 Preparing legislation and resources to promote
Estonian aircraft register
Promoting Aircraft Financing Industry
 Special incentives for aircraft financing organizations
settling in Estonia
With the right focus, Aviation has opportunity to become
the core driver for Estonia’s GDP growth

9. www.magneticmro.com