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Nordica came out of the Covid-19 year with a loss twice smaller than expected

Direct News Source

This morning, the general meeting of Nordic Aviation Group (NAG) or Nordica shareholders approved the company's annual report for the previous financial year. While the business initially forecast a loss of more than 20 million euros due to the near complete cessation of operations as a result of the Covid-19 lockdowns, the company actually ended 2020 with a loss of 10.5 million euros.

Last year, NAG’s sales revenue was 61 million euros, which was almost 42% less than the sales revenue (104 million euros) in 2019. The International Air Transport Association (IATA) estimates that in 2020, commercial aviation turnover per line kilometer in Europe fell by as much as 70%.

Taavi Aas, the Minister of Economic Affairs and Infrastructure, who controls the participation of the Republic of Estonia in Nordica by law, was satisfied with Nordica's financial results. "We all know how the corona crisis influenced the economy, but especially how hard it hit the aviation and tourism sectors. The industry has effectively had a competition to see who can perform the least-worst,” said Aas.

According to Aas, the NAG Group needs to meet two goals, “As a subsidiary, the goal of Regional Jet is to earn income for the group and that is being done. Nordica's role is to provide air services, either by flying on their own or by motivating existing competitors. As the virus recedes, we can see how this will work again,” he added.

According to Erki Urva, Chairman of the Management Board of NAG, the market situation has definitely changed compared to the pre-crown period, "Today, there is still no final clarity nor freedom to start large-scale flights, but it is clear that life will probably not continue exactly where it left off in March 2020. Our job is to monitor and react according to the market situation,” said Urva.

Last summer, the European Commission approved state aid to NAG, and in November, the Estonian government made a contribution of 22 million euros to the share capital of Nordic Aviation Group AS.

According to Urva, it cannot be ruled out that if the corona crisis continues, state aid must be introduced to this extent as well. "The virus has not yet been defeated and the additional burden on the economy will continue until it is disputed who, whether and where should or should not and can or cannot vaccinate themselves. It is clear that these differences only increase the costs for society and for companies, and not only in the tourism sector,” he added.

Of the forward-looking projects, NAG started last year with the introduction of its so-called commercial platform, which enables the selling of tickets independently. For this, an air operator certificate (AOC), an operating licence (OL), and an IATA Airline Designator Code were applied for. The Nordica IATA airline code is ND. Nordica just recently launched the ticket sales on the new commercial platform.

In 2020, 22,000 passengers (351,000 in 2019) flew 1,400 (7,600 in 2019) flights on Nordica scheduled flights. The accuracy of flights departing within 15 minutes was 91% (83% in 2019) and regularity (percentage of flights performed) 97% (97% in 2019).

This press release was sourced from Nordica on 06-Jul-2021.