Airport, Estonia, Financial Services, Transport

International Internet Magazine. Baltic States news & analytics Thursday, 20.01.2022, 09:55

Estonian econmin: Finding new investor for Nordica currently hopeless

BC, Tallinn, 17.06.2020.Print version
Estonian Minister of Economic Affairs and Infrastructure Taavi Aas said he is not thinking about finding a new investor for state-owned air carrier Nordica as this is a hopeless task in the current situation, according the "Aktuaalne kaamera" news program of public broadcaster ERR reported LETA/BNS.

However, Aas did not rule out cooperation with Lithuania in establishing a joint aviation company.

Nordica aircraft are parked at Tallinn Airport and expecting a green light from the European Commission for 30 mln euros in state aid. Although Europe's borders are opening up, it is unclear when Nordica will start flying.

"We are looking at the second half of the summer rather than the beginning of the summer. We have at some point made a business plan for a few years where we talked about more than ten destinations, but what will be the reality?" Nordica CEO Erki Urva told the news program.

"It is definitely not our goal to start burning taxpayers' money," he added.

While today, Nordica's subsidiary Regional Jet is 49% owned by LOT, then Aas said that the company will soon be 100% owned by the Estonian state, the news portal of ERR wrote.

"The continuation of Nordica's operations requires a contribution to the share capital. As far as we know, LOT is not prepared to make its contribution to the share capital. As a result of that, the roads diverge," the minister said.

Aas assumes that the redemption of LOT's shareholding will not cost the Estonian state more than one million euros, because the company was in a loss last year.

Urva said that this is a much more complex issue and there are many other questions that need to be addressed throughout the process. "Various contractual relationships between companies that need to be settled," he added.

Urva added that if LOT abandons the use of Nordica aircraft, these aircraft must be disposed of. "And this has also been done in the last few months," the CEO said.

Before the start of the crisis, Nordica had 24 aircraft, now there are 22 aircraft and the company is expecting to end the year with 17 aircraft. Unfortunately, Nordica in cooperation with LOT signed an agreement to purchase two Embraer aircraft. These planes must be bought out next spring. These costs must also be made clear in the course of the separation.

The minister said he hopes that LOT gives up its participation without a court dispute, noting that there has been a lot of dispute with the Poles. The state is not thinking about a new investor at present.

"As of today, finding an investor in the market is practically hopeless. No scenario can be ruled out when the situation returns to normal," Aas said.

When asked whether a joint airline of the Baltic states cannot be ruled out either, Aas said that it is too early to say. "However, there have been interesting signs from Lithuania, for example, that Lithuanians also want to make their own airline," he added.

Although Aas said that cooperation with Lithuania is currently speculation, he did not rule out the possibility of Estonia and Lithuania working together.

"Well, why not. At least there is one country who has shown interest in the matter," Aas said.

Search site