Nordica and Xfly Prepare for Bankruptcy as Investor Talks Fail
Nordic Aviation Group, known as Nordica, and its subsidiary Xfly announced plans to file for bankruptcy. This decision follows the collapse of talks with investor Lars Thuesen. Kadri Land, the board chairperson, stated the investor withdrew due to significant risks associated with the airline.
Currently, Nordica operates one A320-200, leased from Avolon, which is wet-leased to Bamboo Airways. Xfly operates six ATR72-600s and eight CRJ900s. Only three CRJ900s were in service recently, leased to Widerøe and SAS. These aircraft returned to Tallinn on November 19.
The Estonian government clarified that Transpordi Varahaldus, a state-owned entity, will not be affected by Nordica’s bankruptcy. The government plans to expedite the sale of the CRJ900s it owns.
How is the Estonian government planning to support Nordica during this challenging transition?
Interview with Kadri Land, Board Chairperson of Nordic Aviation Group (Nordica)
By [Your Name], News Editor at newsdirectory3.com
Q: Kadri, thank you for joining us today. Can you provide us with the latest updates regarding Nordica’s plans to file for bankruptcy?
Kadri Land: Thank you for having me. Yes, unfortunately, we have reached a point where Nordica, along with our subsidiary Xfly, has decided to file for bankruptcy. This is primarily due to the recent collapse of negotiations with our investor Lars Thuesen, who ultimately chose to withdraw his support over concerns regarding the significant risks associated with our operations.
Q: What specific risks led to the investor’s withdrawal?
Kadri Land: The key issue was the financial instability we have faced in recent months. The loss of our significant ACMI contract with SAS, which will be effective from November 1, 2024, has created a scenario where over 90% of our revenue is in jeopardy. This alarming loss right before the winter season compounded our challenges, and Thuesen felt there wasn’t enough time to mitigate these risks adequately.
Q: You mentioned the current fleet and operations. Can you elaborate on the status of Nordica’s aircraft?
Kadri Land: Currently, Nordica operates one A320-200, which is leased from Avolon and wet-leased to Bamboo Airways. Meanwhile, Xfly has a fleet of six ATR72-600s and eight CRJ900s. However, due to the ongoing challenges, only three of the CRJ900s have been in service and were leased out to Widerøe and SAS, returning to Tallinn on November 19.
Q: How is the Estonian government involved in this situation?
Kadri Land: The Estonian government, through Transpordi Varahaldus, a state-owned entity, has assured us that it will not be directly impacted by our bankruptcy proceedings. They are focused on expediting the sale of the CRJ900s that they own, which is a move to stabilize the situation.
Q: Looking back at the negotiations with Lars Thuesen, how do you feel about the collaboration?
Kadri Land: Despite the unfortunate outcome, we appreciated the opportunity to work with Mr. Thuesen and his team. They were committed to finding solutions, and we acknowledge their efforts. It’s truly disappointing that we could not reach a satisfactory agreement, but we understand the complexities involved given the current landscape.
Q: As you prepare for this next chapter, what are the immediate priorities for Nordica and Xfly?
Kadri Land: We need to focus on the bankruptcy process, ensuring that we comply with all legal requirements while also working closely with the government to facilitate the sale of our assets. Our priority is to safeguard employee interests and maintain a structured approach as we navigate through these tough times.
Q: Thank you, Kadri. Are there any final thoughts or messages you would like to share?
Kadri Land: I want to extend my gratitude to everyone who has supported us through this journey. While we face significant challenges ahead, our team remains dedicated to navigating this process with transparency and integrity. Thank you for your interest in Nordica and Xfly.
End of Interview
The financial issues faced by Nordica intensified after losing a key ACMI contract with SAS, effective November 1, 2024. The government initiated a search for investors, selecting Lars Thuesen as a potential buyer. However, negotiations did not succeed.
Thuesen expressed disappointment about not completing the acquisition, citing too many risks and little time to address them. He acknowledged the team’s efforts and noted that losing 90% of revenue just before winter was detrimental. Despite the outcome, he appreciated the chance to collaborate on solutions.