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Nordica finishes first business year with €14.4 million loss

Nordica jet taking off in Tallinn.
Nordica jet taking off in Tallinn. Source: (Siim Lõvi/ERR)

Nordica, the Estonian flag carrier that started out as the Nordic Aviation Group with €40.7 million government support in late 2015, announced a loss of €14.4 million for its first business year. The reported sales revenue amounted to €51 million.

As daily Eesti Päevaleht reported on Friday, the company is planning to end 2017 with a smaller loss at some €6 million.

“The year 2019 is the magical line where we are planning to break even or return a small profit, and at the moment we are moving towards it according to our business plan. For the 2017 business year we are already predicting a €6 million loss,” Nordica CEO Jaan Tamm told the paper.

“The current loss means that we are sustainable,” Tamm added, who in his prediction can fall back onto years as the successful manager of shipper Tallink. Tamm also said that of the current loss about half represented investments in staff and skills, which couldn’t be reflected the same way as investment in tangible assets. If it could, the current loss would be much lower, Tamm insisted.

Nordica’s financial director, Ahto Pärl, explained to Päevaleht that growing volumes would allow them to further reduce losses this year. Once Nordica’s own activities were moving towards being profitable, outsourcing would cost less as well. For example, increasing its fleet instead of leasing planes alone would mean savings of about €1 million, and Nordica was already training its own pilots, for which it had the necessary licenses.

This autumn Nordica’s subsidiary Regional Jet will start operations between Estonia and Sweden, working as a subcontractor for SAS. Apart from Nordica’s Bombardier jets, ATR turboprop planes will be used as well.

Until the end of 2017, Nordica is planning to fly its own routes with six planes, use another three or four based on contracts with Polish carrier LOT, and four more planes with SAS.

Editor: Dario Cavegn

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