Nordic Aviation Group, doing business as Nordica (ND, Tallinn Lennart Meri), and its subsidiary Xfly (Estonia) (EE, Tallinn Lennart Meri) will file for bankruptcy "at the earliest opportunity" after talks with prospective investor Lars Thuesen fell through.

"Unfortunately, the potential investor announced on Monday [November 18] that he does not intend to proceed with the privatisation due to excessive risks. Therefore, the board informed the council of its decision to terminate the operations of Nordic Aviation Group and Xfly and file for bankruptcy," chairperson of the board Kadri Land said in a statement on November 20.

The airline said it would follow all Estonian laws related to employee relations during a bankruptcy. It will notify lessors of its intent to return their aircraft as it winds down its operations.

Nordica's fleet currently comprises a single A320-200 leased from Avolon, the ch-aviation fleets module shows. The aircraft is currently wet-leased to Bamboo Airways and is currently active.

The group's ACMI unit, Xfly, operates six ATR72-600s leased from Nordic Aviation Capital (five) and Chorus Aviation (one), and eight CRJ900s owned by Xfly directly (one) and by the state through Transpordi Varahaldus (seven). Only three CRJ900s were recently active - two on a wet lease to Widerøe and one to SAS Scandinavian Airlines. All three were ferried back to Tallinn Lennart Meri on November 19, Flightradar24 ADS-B data shows. Neither SAS nor Widerøe were immediately available for comment regarding the impact on their respective operations.

Transpordi Varahaldus, which is owned directly by the state, is not directly affected by Nordica's bankruptcy filing as it is not part of the group. The government said that while it had already started exploring options for the sale of the CRJ900s owned by the company before, it will now accelerate them to dispose of the assets as soon as possible.

"All necessary steps, including the sale of assets and the liquidation of the company, must be completed by the end of the first half of 2025 at the latest," the government said.

The long-running financial woes of the Estonian state-owned carrier were exacerbated by the termination of its white-label ACMI contract with SAS, the cornerstone of its business, effective as of November 1, 2024. The government sought investors for the airline and tentatively selected Lars Thuesen, owner of Jettime and a 2% shareholder in airBaltic, as the preferred bidder. ch-aviation understands that the government initially greenlighted the sale in late October 2024, but subsequent talks did not go as planned.

ch-aviation reached out to Nordic Aviation Group, the Estonian government, and Lars Thuesen for additional comment.

Thuesen commented to ch-aviation: "Earlier this week I decided to abandon my attempt to buy Nordica/Xfly. Overall there were too many risks facing the company and too little time to solve them. It is sad, because it is two good companies, where a lot of positive things have happened over the last 12 to 18 months. However, losing 90% of your revenue (the SAS contract) two months before the winter season starts, killed it. I have had good cooperation with the management and the Estonian government on finding creative solutions, but at the end of the day we failed. But at least it was given a try."