Nordica to get new CEO, aims include consolidation, new business strategy

Gunnar Kobin.
Gunnar Kobin. Source: Jaanus Lensment/Eesti Meedia/Scanpix

The supervisory board of state-owned airline Nordica has appointed long-time media executive Gunnar Kobin as the company's next CEO. Kobin will take over on Sept. 1 this year. Meanwhile former CEO, Jaan Tamm, has said that one of the main issues of Estonia's airlines have been frequent strategy shifts.

Nordica announced last week that they are giving up their passenger business, and that they will concentrate on subcontracting work for other airlines instead, a business model that the company has applied with varying success in other markets abroad for a few years through its subsidiary, Regional Jet.

The appointment of Kobin, according to supervisory board chairman, Toomas Tiivel, will bring in a "recognized top manager" with "comprehensive experience" in the managing and restructuring of businesses as well as finding new investors. At the same time, Kobin also has "a strong background in development as well as marketing activities, and working on different concepts," Tiivel said.

Beyond that, Kobin has "a clear understanding of the challenges and possibilities" of the Estonian aviation business, the chairman added.

Kobin's tasks, then, include turning the currently three state-owned companies involved in the business into a single and working business group, and to work out "a sustainable strategy" for Estonia's flag carrier.

Four years after the bankruptcy of Nordica's predecessor, Estonian Air, the situation is as chaotic as ever. The airline has just announced its withdrawal from the passenger business, closing five unprofitable routes and leaving the business risk of its three remaining ones to strategic partner, LOT. Its subsidiary operating the actual planes, Regional Jet, is led by former failed Estonian Air CEO, Jan Palmer.

The most recent strategy shift away from providing direct flights to and from Tallinn towards offering wet lease services to other airlines directly goes against the purposes on which the new national carrier was established.

Former finance minister Sven Sester (Isamaa) commented on Wednesday that it is difficult to see how owning a wet lease airline is of any strategic meaning to the Estonian state, and called for an analysis into whether Nordica should try to find a new strategic partner to actually achieve its original aims—or if the state should end its involvement in the business altogether.

Nordica's first CEO, Jaan Tamm, commented on Wednesday that he sees the frequent strategy shifts as one of the main problems of the Estonian aviation business. Asked about close cooperation with Air Baltic, Tamm said that a chance to do this might have been missed some two years ago. By now, Air Baltic's position in Tallinn is likely too strong.

"Today the question is what we actually have to offer. They've achieved what they wanted in just a year or two. I think a year or two ago, our position in such a family would have been better," Tamm said, adding that Air Baltic has pretty much wiped out Nordica by now.


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Editor: Dario Cavegn

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