Facing bankruptcy, Nordica starts actively laying off employees

TALLINN - While the state-owned airline Nordica announced on Wednesday that it would file for bankruptcy, the Unemployment Insurance Fund already on Friday received a lay-off notice from Nordica and related companies, announcing plans to lay off 183 employees, the daily Postimees writes.

Nordica told the Unemployment Insurance Fund that 15 people will be laid off from its parent company Nordic Aviation Group and 161 employees from its subsidiary Regional Jet. In addition, seven people will be laid off from the company Best Crew OÜ, which temporarily leased labor to Regional Jet.

Remco Althuis, the CEO of Nordic Aviation Group, said on Wednesday that a total of 570 people, 290 of whom work in Estonia, will lose their jobs upon Nordica's bankruptcy.

In addition to Nordica, the state also plans to liquidate OÜ Transpordi Varahaldus, which owns Nordica's aircraft and leases them to the company. The state-owned company Transpordi Varahaldus was established in parallel with Nordica nine years ago so that the airline's assets would be owned by another company.

According to Althuis, attempts were made to find a buyer for the companies, but this process was unsuccessful. Danish investor Lars Thuesen told Postimees that the purchase would have involved too many risks.

"When the minister announced that I was interested in buying, he also said that it was very important to me that Nordica found new business opportunities by the winter," Thuesen said. "When the contract with SAS ended, 90 percent of [Nordica's] revenue disappeared. That's what killed it."

A little over a month ago, Climate Minister Vladimir Svet announced that Thuesen was interested in purchasing, but added that his offer was not yet certain and depended on the ability of the company's management to sign contracts for the aircraft that would be left without work at the end of October.

Thuesen's company holds a 2.03 percent stake in Air Baltic, which he acquired in 2017. Thuesen also owns Jettime, a Danish airline founded in 2020 that specializes in wet leasing aircraft, that is, leasing them with a crew. Jettime currently operates 11 Boeings.

Minister of Infrastructure Vladimir Svet  said at the government's press conference on Thursday that following the declaration of the bankruptcy of the national airline Nordica, Transpordi Varahaldus will begin the process of selling the aircraft and other assets as soon as possible, with the prospect of turning the assets into an estimated 30 million euros of cash. This money will be received into the state budget and part of it will go to LHV bank for lease payment.