Nordic Aviation Group, Estonia’s state-owned airline, announced the cease of its operations and the filing for bankruptcy of its companies Nordic Aviation Group AS and Regional Jet OÜ (Xfly). The decision was made after potential investor Lars Thuesen communicated his intention not to proceed with the privatization process due to associated risks.
According to Kadri Land, Chairwoman of the Supervisory Board, «the potential investor informed us that the risks were too high.» This prompted the Management Board to propose ceasing activities and initiating bankruptcy proceedings, a measure that was communicated to the Supervisory Board.
The privatization process, promoted by the Estonian Government since late last year, sought to ensure the airline’s continuity through the inclusion of private capital. However, final negotiations failed to reach an agreement.
In August 2023, the company initiated a restructuring process aimed at achieving profitability. For this, it hired international consultancy Knighthood Global to review the company’s operations and cost structure. According to the company’s statement, this measure sought to «ensure the company’s sustainability» in a context of «deteriorated economic conditions» and «costs significantly exceeding revenues.»
In October 2024, Nordic Aviation Group announced that an investor had submitted a formal offer to privatize the company, which represented «a significant milestone in our ongoing transformation.» Later, it was confirmed that the potential investor was Lars Thuesen, owner of Jettime and experienced in the aviation sector. At the time, Thuesen expressed confidence in the company’s efforts to «strengthen and secure the future of Nordic Aviation Group.»
However, Thuesen’s decision not to proceed with the privatization led the Management Board to cease operations and file for bankruptcy. According to CEO Remco Althuis, the company will inform all stakeholders, including employees, partners, and lessors, about the bankruptcy procedures and plans to return the leased aircraft «as soon as possible.»
The statement specifies that, as part of the bankruptcy process, the Estonian Unemployment Fund will be notified, and all legal formalities will be followed.
A short and failed story
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. Initially, Nordica operated under a hybrid model, utilizing codeshare agreements and outsourcing flight operations to external operators such as Adria Airways.
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Over time, Nordica took a more active role in its operations, launching its own fleet and expanding its network of destinations. In 2016, it established Regional Jet (later known as Xfly) as a subsidiary to provide ACMI services (aircraft, crew, maintenance, and insurance leases) to other airlines. This diversified strategy allowed Nordica to operate both regular flights and contracted services, positioning it as a relevant player in the regional aviation market in Europe.
However, 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.
Its fleet consisted of six ATR 72-600 and five CRJ900 aircraft.
