State-owned airline Nordica is not in any danger of significant negative impact from Scandinavian airline SAS, filing for bankruptcy proceedings in the United States, Nordica's CEO Jan Palmer says. Pressure SAS is facing pressure from striking aircrews in its home countries of Denmark, Norway and Sweden, and high leasing costs will not affect Nordica one way or another either, he added.
Nordica engages in leasing arrangements with SAS, while its subsidiary Regional Jet/Xfly also operates domestic routes in Sweden.
Palmer told ERR Wednesday that: "This [SAS] filing for bankruptcy protection does not affect our relationship with the company, as we have a guarantee that they will continue to operate with us in the same way."
"Naturally, we are conducting regular meetings with them and are being kept abreast of developments. Nothing has changed, from our perspective. We will continue to operate flights and we will be paid as agreed," Palmer, who was appointed CEO last month, went on.
Regarding the strikes, Palmer said: "If you take a look at SAS or any of the big aviation groups, they conduct regular negotiations with the unions, and these often end up in strikes. If I'm not mistaken, this is SAS's fifth strike in eight years. Unfortunately, it's quite common for things to end up that way. But I don't think it will create new business opportunities for us. We are not affected by the SAS strike as we have nothing to do with the unions in Sweden, Denmark and Norway. We will continue to operate as planned, but we can't change anything either. We can only continue with our planned activities. Nobody knows how long these strikes may last, but from my point of view, it is important that we can continue providing services to SAS."
The SAS strike will affect about 50 percent of Nordica's flights, he added, incoluding the Stockholm-Copenhagen route, though not the Tallinn-Stockholm route, which is operated directly by Nordica.
All of Nordica's fleet of aircraft are currently under contract, he added, and the airline is working flat out – in fact there is too little capacity to meet demand, in spite of any remaining Covid restrictions.
The company also finds it hard to find good pilots and cabin crew, as well as ground engineers and other staff, as the sector rights itself after the pandemic and faces labor shortages globally.
At the same time, this can be viewed positively in that it spells recovery from 2020-2021, Palmer added.
Nordica lost seven million euros in 2019 after one of its partners, Slovenian airline Adria Airlines, went bankrupt, though Palmer said this was a very different situation.
Nordica, which made a profit of nearly €1.2 million last year, LINK does not plan to offer any more direct flights from Tallinn in the near future., due to strong competition
The company does plan to continue to expand its outsourcing model, which it has been running virtually since it entered business and also takes account of the fact that Tallinn as a hub is overshadowed by Helsinki and Riga, and also mitigates risk exposure.
he company had a turnover of €60.2 million in the past financial year, Nordica reported last month, and as noted, profits of €1.2 million.
This compared with a turnover of €61 million and losses of €10.5 million, in the Covid-blighted year of 2020.
Editor: Andrew Whyte