Nordica and Xfly to File for Bankruptcy After Investor Talks Fail
Nordic Aviation Group, operating as Nordica (ND, Tallinn Lennart Meri), and its subsidiary Xfly (EE, Tallinn Lennart Meri) will file for bankruptcy after discussions with potential investor Lars Thuesen ended without an agreement. The airline’s board confirmed on November 20, 2024, that it would proceed with winding down operations and following Estonian laws regarding employee relations during the bankruptcy process.
Kadri Land, the chairperson of the board, explained that the proposed investor decided against moving forward with the privatization due to excessive risks, which led to the decision to terminate operations. As part of the closure, Nordica will notify aircraft lessors about returning their aircraft as it ceases operations.
Nordica’s current fleet includes a single A320-200, which is leased from Avolon and currently wet-leased to Bamboo Airways. Meanwhile, Xfly, the group’s ACMI unit, operates six ATR72-600s and eight CRJ900s, with some aircraft leased from Nordic Aviation Capital and Chorus Aviation, and others owned directly by Xfly or the state through Transpordi Varahaldus.
The financial challenges faced by the Estonian state-owned airline were worsened by the termination of its major white-label ACMI contract with SAS, which had been a cornerstone of its business. This contract was terminated as of November 1, 2024, leading to significant revenue losses for the airline. The Estonian government had initiated efforts to privatize the airline, selecting Lars Thuesen, the owner of Jettime and a 2% shareholder in airBaltic, as the preferred bidder. However, after initial approval in late October 2024, talks failed to secure a deal.
Thuesen, who ultimately decided not to pursue the acquisition, shared his disappointment, citing the loss of 90% of the company’s revenue following the SAS contract termination as a key factor. Despite positive changes in the company over the last 12 to 18 months, the situation became untenable with the approaching winter season.
The Estonian government, while not directly impacted by the bankruptcy of Nordica and Xfly, is now focusing on disposing of assets, including the CRJ900s owned by Transpordi Varahaldus. The government has stated that all necessary steps, including asset sales and the liquidation of the company, must be completed by the end of the first half of 2025.
Ch-aviation reached out to Nordic Aviation Group, the Estonian government, and Lars Thuesen for additional comments, but no immediate response was received.
Related News : https://airguide.info/?s=Nordic+Aviation+Group, https://airguide.info/category/air-travel-business/airline-finance/
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com