CEO: €10 million of state aid will go to Regional Jet
Nordica subsidiary Regional Jet CEO Jan Palmer says he believes in the business model of subcontracting, but adds that the firm needs about €10 million to survive the coronavirus crisis, a figure he says it will receive, adding that recovery awaits if the company continues to weather the storm.
Palmer told daily Eesti Päevaleht (link in Estonian): "If we put the crisis behind us, companies such as ours can expect explosive growth. We are currently in discussions with five large airline companies who must subcontract close-range flights by smaller aircraft."
According to Palmer, €10 million of the €30 million state bailout allocated to state-owned Nordica would go to Regional Jet.
Debts from aircraft leases have piled up during the coronavirus pandemic, and Regional Jet is also indebted to its partners, leading to negative share capital, Palmer said.
Palmer said: "Everyone has been extremely responsive, and some debts have already been written off. But at one point lessors, who have already given payoff breaks, will begin to get restless, because they are also being pressured by investors and banks."
Palmer, who was the final CEO of state-owned airline Estonian Air, before it was wound up in 2015, had been critical of the Estonian state, saying that while much is made of maintaining direct flights, the Ministry of Economic Affairs and Communications has not analyzed the necessity of these routes, as well as their quality.
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Editor: Kristjan Kallaste, Andrew Whyte