Gunnar Kobin steps down as Nordica CEO before taking up post

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

Gunnar Kobin, appointed CEO of state-owned airline Nordica in June, will now not be taking up his post. Kobin stepped down from the role in early August, nearly a month before his start date, but this, as well as the identity of his replacement, was leaked Monday ahead of Nordica making the announcement themselves, according to ERR's online news in Estonian.

"I resigned a month ago from the position of CEO of Nordica," Kobin told business daily Äripäev Monday.

Toomas Tiivel, supervisory board chair at Nordica, confirmed the resignation to ERR, though company spokesman Toomas Uibo had already told ERR it was news to him and he had only read about it in the media.

Tiivel said that Kobin informed him of his change of heart on Aug. 6, with the reason given that he did not want to return to salaried work.

Kobin's replacement is to be Erki Urva, also first made public by the same Äripäev piece.

"We've been looking for a new CEO in the meantime [after Kobin's withdrawal]," Tiivel said.

"Our search is well advanced in the sense that we signed a contract today. We were about to announce this but it was leaked via other channels before we had a chance," he added.

Erki Urva starts work on Tuesday on a monthly salary of €9,800. He was board chair of the now-defunct Estonian Air from 2002 to 2005 and has also worked at Nordica, it is reported.

Urva said the timing was ideal since he both had experience in airlines and was at the time out of work.

"In the meantime, I was not really working and was looking for something, then the offer was made in a field I've always been interested in, and in fact with a company I've already been involved with," Urva said.

Urva made providing more flights outside Estonia, something the airline says it has been committed to do from October, as a priority.

"The fact that we are looking outside, I think shows we are still growing in volume. It has to be said that Nordica is still the largest airline in Estonian history. As far as flying outside Estonia is concerned, of course, the initial idea at the start of the business was actually to fly [internationally] from Tallinn, but at the moment, the competitive situation has turned out to be the way it is today."

Struggling to compete in international arena

Nordica subsidiary Regional Jet has been serving domestic routes in Estonia, for instance to the island of Saaremaa, and is co-owned by Polish airline LOT.

"Initially, I'm still following the vision of the owners, but probably some restructuring steps have to be taken and a good look ahead as to what direction this commercial activity might take is needed. Some ideas and decisions just need to be implemented," Urva said with regard to future plans for the company.

When Nordica announced Kobin's appointment on June 27, Toomas Tiivel said that the incoming, now outgoing, CEO's task was to create an amalgam of three state-owned airlines, then to develop and implement a sustainable national airline strategy to provide Estonia with significant air links to the rest of the world.

Kobin was the board chair of private media company Ekspress Grupp from 2009 to 2016, remaining on its supervisory board to 2018. He was due to receive a monthly gross salary of €15,000 and was on a five-year fixed contract, it is reported.

At the time of Kobin's appointment, Nordica's original CEO, Jaan Tamm, said he sees frequent strategy shifts as one of the main problems with the Estonian aviation business, noting that the opportunity to strike a cooperation deal with Latvian carrier Air Baltic had likely now passed, with the latter firmly embedded in its operations from Tallinn Airport.

Reported revenue at Nordica increased by 30 percent year-on-year (y-o-y) to 2018, to a total of €107.7 million, with a similar rise in passenger numbers, but it still saw a net loss of €5.4 million over the same period.

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Editor: Andrew Whyte

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