Nordica posts EUR 10.5 mln loss for 2020

  • 2021-07-06
  • BNS/TBT Staff

TALLINN - The general meeting of shareholders of Nordic Aviation Group AS, the Estonian state-owned airline operating under the Nordica brand, approved the group's annual financial report for 2020 on Tuesday; while the initial prognosis for the company, which virtually halted operations during the coronavirus crisis, estimated a loss of over 20 million euros, in reality the group ended the 2020 financial year with a loss of 10.5 million euros.

Nordic Aviation Group's sales revenue in 2020 amounted to 61 million euros, 42 percent less than the 104-million-euro revenue posted for 2019, Nordica said. According to the International Air Transport Association (IATA), revenue per route kilometer declined around 70 percent in European commercial aviation last year.

Estonian Minister of Economic Affairs and Infrastructure Taavi Aas said that the smaller than estimated loss is satisfactory.

"We all know what the coronavirus crisis did to the economy, to aviation and tourism in particular. It has been a competition over who will do less poorly," Aas said in a press release.

Nordic Aviation Group needs to meet two goals, according to Aas.

"Regional Jet as a subsidiary needs to earn revenue for the group and it has managed to do so. It is Nordica's task to ensure air links either by operating them itself or motivating its competitors to do so through its existence. We will see how well this functions when the virus abates," he added.

CEO of Nordic Aviation Group Erki Urva said that the market situation has definitely changed compared with pre-pandemic times.

"There is no complete clarity and freedom for relaunching flights at a large scale; what's clear, however, is that life will not simply resume exactly from the same place where it was halted in mid-March 2020. Our task is to monitor and respond to the market situation," Urva noted.

In summer 2020, the European Commission approved the granting of state aid to Nordic Aviation Group and in November 2020, the Estonian state made a payment of 22 million euros to Nordic Aviation Group's share capital. Urva said that the group may need to use the state aid may in full if the coronavirus crisis continues.

"The virus has not been defeated yet and additional burden on the economy remains until disputes continue over who, if and where should or shouldn't and can or cannot get vaccinated. Obviously, such disagreements will only increase expenditures of the society and more specifically of businesses, and not just in tourism," he added.

With regard to forward-looking projects, Nordic Aviation Group last year started introducing its commercial platform enabling to independently engage in ticketing. For this purpose, the group has applied for an air operator certificate, operating license and an IATA airline designator code. Nordica's IATA designator code is ND and the group began the sale of flights via its commercial platform a few weeks ago.

Nordica's regular flights serviced 22,000 passengers on 1,400 flights in 2020, marking declines by 93.7 percent and 81.6 percent, respectively, compared with the year before. 91 percent of Nordica's flights departed on time or with a delay of up to 15 minutes in 2020, improving the result by 8 percentage points compared with in 2019. Flight regularity was 97 percent last year, remaining at the same level as in 2019.