Estonian carrier Nordic Aviation Group has ceased operations and filed for bankruptcy after a proposed investor pulled out of a planned privatisation.
The group, which operates under the Nordica brand, says it was informed on 18 November that potential investor Lars Thuesen would not proceed with the privatisation plan, which was initiated last year.
After assessing the group’s economic situation, the management board decided to cease the airline’s operations and file for bankruptcy for both Nordic Aviation Group and subsidiary Regional Jet, which is branded as Xfly.
Nordic Aviation emerged in 2015 as Estonia’s government looked to a successor for the collapsed flag-carrier Estonian Air.
While sale talks with two interested parties had previously broken down earlier this year, last month Nordic Aviation said Thuesen – owner of Danish carrier Jettime – had submitted a bid.
The company says final discussions on the privatisation continued in the past week. “However, on [18 November], the potential investor informed us about his intention not to proceed with the privatisation, as the associated risks were too high,” says Nordic Aviation chair Kadri Land.
Nordic Aviation chief executive Remco Althuis says: ”Nordic Aviation Group and Xfly have gone through a challenging path over the past 15 months since the airline began its turnaround process in August 2023.
“This journey has been marked by immense efforts from the entire team to bring the airline to a new and sustainable footing.”
Althuis adds: ”Our aim is to hand over the aircraft Nordic Aviation Group and Xfly are using to the lessors at the first possible time, most likely during the upcoming days. This is accompanied by all relevant formalities applicable to bankruptcy proceedings, including notifying the Estonian Unemployment Fund.”
Over its operational period Nordica used a fleet including Bombardier CRJs, ATR 72s and Airbus A320s.
Lessors have been informed of the bankruptcy filing, says Althuis, adding that the leased aircraft will be returned as soon as possible.
The government had intended to privatise Nordic Aviation Group and its associated lessor Transpordi Varahaldus in a joint transaction.
While Nordic Aviation’s operations have been halted, the government intends to proceed with selling Transpordi Varahaldus’s assets separately.
Estonian infrastructure minister Vladimir Svet is set to brief the government on the asset sale on 21 November.
“Despite Nordica’s bankruptcy, the aircraft and other assets belong to Transpordi Varahaldus,” he says.
These will be sold for “the best possible price, as soon as possible”, says the government, adding that the asset sale, and liquidation of the company, must be completed by the end of the first half of next year.
Transpordi Varahaldus’s fleet includes seven Bombardier jets.
