The airline is facing a crisis point, reportedly racing to secure aircraft contracts amid ongoing privatization discussions.

Economic Affairs Minister Vladimir Svet (Center) has expressed the aim of clarifying Nordica's fate by mid-November, with potential outcomes ranging from a sale to full closure.

The Ministry of Climate had previously warned that without new clients or successful privatization following the termination of its agreement with Scandinavian carrier SAS, Nordica would likely face bankruptcy.

Initially, the government was set to make a decision during Thursday's cabinet session on Nordica and Transport Asset Management (Transpordi Varahaldus), which operates its aircraft.

However, this decision has been postponed by a week to allow the company time to find viable uses for its fleet.

Minister Svet noted that it should become evident within a week or up to ten days whether Nordica will be privatized or closed, underscoring that the process remains fraught with challenges beyond the government's control. "We are working towards making this happen next week, but perhaps ultimately we will need 10 days. But I think we will have clarity in November in any case," he remarked.

Svet said he intends to revisit the potential privatization of both Nordica and Transport Asset Management at the next cabinet meeting, acknowledging the ongoing uncertainties.

Nordica's partnership with SAS ended in October after it was deemed unprofitable, leaving the carrier with few options for its fleet.

The government later reached an agreement in principle for a potential sale to aviation entrepreneur Lars Thuesen, contingent on at least 60 percent of Nordica's aircraft being under contract, a condition not yet met.

Minister Svet emphasized ongoing efforts to secure new contracts, with privatization seen as the preferred, albeit uncertain, solution.

Nordica CEO rules out bankruptcy route

Nordica CEO Remco Althuis said later on Thursday that bankruptcy was not an option, when set against privatization.

"The expression is that it takes a village to raise a child; and so it takes an entire country to privatize an airline, so there's a lot of work going on behind the scenes. Were working very hard to ensure that we get their business as promised," Althuis, a Dutch national, said.

"I'm very proud to say that we deliver on that promise."

"Today we operate 5 aircraft, one of which is for SAS, and we are in the process of signing contracts which will ultimately end up having 11 aircraft under contract," by end of Nov [by the end of November]," the Nordica chief went on.

Established in 2015 following the dissolution of Estonian Air, the Nordic Aviation Group transitioned from independent operations to a wet-leasing model in 2019. As of mid-October, it employed 579 people.

Transport Asset Management manages the leasing of aircraft and spare parts, including seven Bombardier planes.

Editor's note: This article was updated to include comments from Remco Althuis.

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