Estonia still in informal consultations with EU over Nordica state aid

A Bombardier CRJ900 regional jet in Nordica livery. Source: Nordica

Estonia is still in informal consultations with the European Commission regarding Nordica's state aid permit, said Head of the Aviation and Land Development Department of the Ministry of Economic Affairs on Friday.

Nordica is awaiting approval for state aid from the European Commission so the state can support the airline with €30 million euros. The Ministry has asked the Commission for feedback as soon as possible when dealing with the permit.

Taivo Linnamägi, Head of the Aviation and Land Development Department of the Ministry of Economic Affairs, said: "In the meantime, we have clarified some points in a conference call with the European Commission. It is worth noting that we are currently in a so-called informal consultation on state aid authorization, during which we can finalize our state aid application before a formal assessment, which will speed up the Commission's decision."

Linnamägi said a traditional application for state aid usually takes months, if not longer, to be agreed.

"We want to get Nordica's state aid permit as soon as possible in order to mitigate the effects of Covid-19, which the European Commission understands. That's why applying for a state aid permit is different from the normal process," he added.

The Estonian state started consultations with the European Commission on this subject at the beginning of June. The government decided to increase the share capital of Nordica by €30 million at the end of April, but it needs to find out whether it would be illegal to give state aid.

The condition for increasing the share capital of Nordica is the merger of Nordic Aviation Group AS, Regional Jet OÜ and Transpordi Varahaldus OÜ. In addition, Nordica must submit a plan to resume flights from Tallinn.

The state also wants to buy out 49 percent of Polish company LOT in Nordica's subsidiary Regional Jet. Minister of Economic Affairs and Infrastructure Taavi Aas (Center) has previously said the state plans to buy out the stake for less than €1million, the final amount will be determined during the negotiations.

In 2015, Estonian Air ceased operations after the results of the European Commission's investigation revealed Estonia had granted illegal state aid to the company.


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Editor: Helen Wright

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