Nordica state aid decision could be delayed until fall

A turboprop aircraft in Nordica livery.
A turboprop aircraft in Nordica livery. Source: Anna Zvereva/Creative Commons

While Estonia was initially hoping to receive a decision from the European Commission regarding a €30 million increase in state-owned airline Nordica's share capital in June, the permit is still being processed, and a final decision could be delayed until September.

Government confirmed plans to increase the share capital of Nordica by €30 million in April, but since then the application has been bounced around for many months.

Due to complications arising from the coronavirus pandemic, the European Commission is working through August, traditionally a period of recess.

A regular state aid application can be processed over a period of months but in the case of state aid for Nordica, a measure to alleviate the effects of the coronavirus pandemic, the Estonian state was hoping to receive a permit much more quickly.

The Ministry of Economic Affairs and Communications has asked the European Commission for accelerated feedback regarding the topic of state aid to the air carrier.

Henrik Hololei, Director-General for Mobility and Transport at the European Commission, told "Aktuaalne kaamera" on July 28 that a decision on state support for Nordica is to be expected in the coming days. "The process has moved forward intensively and I believe a decision will be made soon."

The proposed support package for the Estonian airline is firstly thought of as a way to reinvigorate the company's financial state after the COVID-19 emergency situation, also making it possible for the company to provide travel from Tallinn even if other airlines can not.

The Estonian state started consultations with the European Commission on the matter 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 under EU law to grant the state aid.

In the first half of July, Estonia was given permission by the European Commission to allocate €20 million to passenger ferry companies operating between Estonia, Finland, and Sweden.

The government also increased their shares in state-owned rail track operator Eesti Raudtee and regional port operator Saarte Liinid by €10 million and €3 million respectively.


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Editor: Kristjan Kallaste

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