Nordic Aviation Group files for bankruptcy

Nordica airplanes at Tallinn Airport. Photo: Sander Ilvest

On November 29, Nordic Aviation Group (Nordica) filed an application with a court to declare Nordica and Xfly bankrupt, Nordic Aviation Group said in a press release on Wednesday.

According to the application submitted to the court, after deducting the value of assets, the company's liabilities will total 38 million euros. In the course of the bankruptcy proceedings, both the value of the assets and payables may change, it said.

Interim trustees have been appointed for the company and the court has imposed a restriction on all transactions involving Nordica's assets. In the near future, the court will also appoint an interim trustee for Xfly.

With the declaration of insolvency, the company's regular business activities have ceased, meaning that making payments, disclosing information, and incurring new obligations is very limited for the company. The company has so far focused on preparing the bankruptcy petition and preventing further damages to creditors. In doing so, all creditors, including employees, aircraft lessors, customers, and service providers, have been treated equally. Following the appointment of an interim trustee for Nordica and Xfly, the trustee's instructions will be followed, and all debt-related matters will be resolved in the bankruptcy proceedings in accordance with applicable laws.

With regard to the employees of Nordic Aviation Group, the process of collective redundancies has been started in cooperation with the Estonian Unemployment Insurance Fund, which helps employees who have been in a direct contractual employment relationship with the company to receive the benefits prescribed by law. After the two-week negotiation period prescribed by law, the company will issue redundancy notices to employees, and employees can apply for unemployment insurance benefits.

The interim trustee will submit an application to the Unemployment Insurance Fund on behalf of the employees to claim benefits to cover unpaid wages and other amounts due from the company under law. Additionally, the companies have terminated all service contracts related to subcontracted personnel. Nordic Aviation Group, in addition to the information day organized with the Estonian Unemployment Insurance Fund, has organized information sessions for employees with airlines operating in the region to help employees smoothly find a new employer.

Nordic Aviation Group has duly returned most of the leased aircraft to the locations specified by the leasing companies. Nordic Aviation Group has also returned the aircraft owned by Transpordi Varahalduse OÜ to Tallinn Airport. This will be followed by proper storage and, if necessary, maintenance of the aircraft. This allows Transpordi Varahaldus to continue with the aircraft sales process. In the course of the bankruptcy proceedings, the company will continue to work with its contractual partners to the minimum extent necessary, in coordination with the bankruptcy trustee, in order to preserve the value of its assets and to avoid further damage to creditors.