Estonian operator Nordica has secured approval for a €30 million financial support package which will comprise a share capital increase and a loan with subsidised interest.
Nordica is a capacity provider operating regional jets for carriers in northern and eastern Europe, but has been facing the possibility of insolvency before the year-end.
The Estonian government has been poised to supply a €22 million capital increase and a loan of €8 million to the company.
Nordica has suffered “substantial losses” since the air transport downturn and the support will ensure it can maintain activity while “limiting distortion” to competition, says European competition commissioner Margrethe Vestager.
The operator has a “key role” in the Estonian economy and regional connectivity, she adds.
Nordica is bound by several conditions, including limitations on management salaries and the size of any acquisitions in other operators, until at least 75% of the capital funding is repaid.
The loan is restricted to a maximum duration of six years.
Nordica’s funding is “necessary, appropriate and proportionate”, says the European Commission, which has cleared the financing arrangement under state-aid rules.
