© Nordica, ES-ACD, Canadair CRJ-900ER by Alec Wilson, licensed under Creative Commons Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0) // Hamburg Airport Xfly SAS Scandinavian Airlines Bombardier CRJ-900LR ES-ACN by Alf van Beem, in the public domain (CC0)
Nordic Aviation Group and Xfly File for Bankruptcy After Privatization
In a major setback for Estonia’s aviation sector, Nordic Aviation Group, the state-owned airline operating under the Nordica brand, and its subsidiary Xfly have announced they are filing for bankruptcy. The decision comes after a privatization deal with Danish investor Lars Thuesen collapsed, leaving the airline group unable to secure the financial backing needed to sustain operations.
Nordic Aviation Group and Xfly File for Bankruptcy After Deal Fails
Xfly, previously known as Regional Jet, specialized in wet leasing and capacity services for airlines like SAS and LOT Polish Airlines. Despite its focus on subcontracted flights, Xfly was deeply reliant on the overall stability of Nordic Aviation Group. The decision to file for bankruptcy affects both entities, effectively ending their operations.
The financial struggles of Nordic Aviation Group have been mounting for years, with high operational costs and market challenges compounded by the COVID-19 pandemic’s lingering impact on global aviation. The Estonian government, aiming to reduce its financial burden, began the privatization process last year. However, negotiations faced repeated obstacles, including unsatisfactory offers from earlier bidders and concerns about the origin of funds. The withdrawal of Thuesen’s investment proved to be the final blow.
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