Nordica CEO: €30 million should see us through
CEO of state-owned airline Nordica Erki Urva says the company is satisfied that the €30-million bailout package which the European Commission green-lighted on Tuesday evening will be enough for the company to survive.
Urva told ERR Tuesday evening that the money, divided between a €22 million share capital increase decided by the government in spring, along with a €8 million government loan, will be sufficient to put right damage caused by the pandemic so far, but that much depended on the future situation with the coronavirus.
A large part of the problems facing Nordica was that while flights were largely grounded during the peak of the pandemic, fixed costs remained, Urva noted.
"When an airline has 24 planes flying at one point, and then only one plane flying three flights a week the very next day, you could say it's not pleasant to still have the same fixed costs, but that's exactly what we need to cover," he said.
Urva said that the airline had been trying to mitigate the effects of the crisis since it began, including making lay-offs, cutting cots, terminating leasing contracts and getting payment reductions on leases.
The European Commission gave the go-ahead to the package Tuesday night, saying that it did not constitute illegal state aid.
A 2015 commission decision on a state bailout for Nordica's predecessor, Estonian Air, found this to be illegal state aid.
The agreement comes with conditions, including that directors not receive bonuses until at least 75 percent of recapitalization is reached.
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Editor: Andrew Whyte