"Unfortunately, the potential investor announced on Monday [November 18] that he does not intend to proceed with the privatization due to excessive risks. Therefore, the board informed the council of its decision to terminate the operations of Nordic Aviation Group and Xfly and file for bankruptcy," chairwomen of the board Kadri Land said in a statement on November 20th.
The airline said that it will notify lessors of its intent to return their aircraft as it winds down its operations.
Nordica's fleet currently comprises a single A320-200 leased from Avolon. The aircraft is currently wet-leased to Bamboo Airways and is currently active.
The group's ACMI unit, Xfly, operates six ATR72-600s leased from Nordic Aviation Capital (five) and Chorus Aviation (one), and eight CRJ900s owned by Xfly directly (one) and by the state through Transpordi Varahaldus (seven). Only three CRJ900s were recently active - two on a wet lease to Widerøe and one to SAS Scandinavian Airlines.
Transpordi Varahaldus, which is owned directly by the state, is not directly affected by Nordica's bankruptcy filing as it is not part of the group. The government said that while it had already started exploring options for the sale of the CRJ900s owned by the company before, it will now accelerate them to dispose of the assets as soon as possible.
"All necessary steps, including the sale of assets and the liquidation of the company, must be completed by the end of the first half of 2025 at the latest," the government said.
The long-running financial difficulties of the Estonian state-owned carrier were exacerbated by the termination of its contract with SAS, effective as of November 1, 2024.
Nordic Aviation Group was established on September 25, 2015, by the Estonian government in response to the bankruptcy of Estonian Air, which left the country without a flag carrier. Its main objective was to ensure Estonia’s air connectivity with the rest of Europe. The airline began operations on November 8, 2015, with an inaugural flight between Tallinn and Amsterdam.
The airline faced multiple challenges, including growing competition from low-cost carriers and fluctuating demand. In 2019, Nordica significantly reduced its route network and stopped selling tickets under its own brand, focusing exclusively on ACMI operations through Xfly. This marked the beginning of a transformation period that culminated in 2023 with a search for a private investor to secure its long-term sustainability—an effort that ultimately failed to prevent the company’s closure.
