However, the sell-off is not the end of the airlines’ comradeship.

• SAS signs letter of intent to sell Estonia Air

Scandinavian airline SAS said Friday it has signed a deal to sell its 49 percent stake in Estonian Air in a move to focus its business on the Nordic home market.

However, the divestment is not the end of the relationship between the Estonian and Scandinavian airlines. After a planned rights issue the Estonian Government will hold 90 percent and SAS 10 percent of Estonian Air.

Both sides will have to put up fresh cash. The Estonian Government will provide some 205 million kronor ($28 million) of new capital in a new rights issue while SAS will convert 20 million kronor in loans into equity.

"It is important to emphasise that the state will not buy out the airline from the other shareholders but will invest additional funds (to cover) ... necessary investments," Estonia's Economy Minister Juhan Parts said in a statement.

"For the state, it is important to develop flight connections with destinations strategically important for us. To that end we shall vigorously cooperate with Estonian entrepreneurs and the tourism sector," Parts added.

The transaction is neutral to profit and liquidity of the SAS Group, the airline said.

Estonian Air has an option to buy SAS' remaining stake after 4 years.

Estonian Air was created as a state-owned carrier in 1991, the year the Baltic nation of 1.3 million people won independence from the crumbling Soviet Union. The airline runs a fleet of six planes