The Estonian government has reportedly stopped the process to sell the Nordic Aviation Group (NAG), which operates under the commercial name ‘Nordica’, incorporating regional airline subsidiary XFly. 

The airline was founded by the Estonian state in 2015 to guarantee the country’s air links following the demise of the former flag carrier Estonian Ai. Since 2019, Nordica has focused most of its activity in the ACMI market.  

The Estonian government has been reluctant to continue supporting the airline with public funds and invited foreign investors to bid for the company. 

In December 2023 it was reported that Nordica had attracted the interest of up to seven European companies that were interested in acquiring the business. 

Subsequently, the number of bidders appeared to be narrowed down to two. These have now been deemed to be unsuitable, as none of the bidding offers fulfilled the Estonian government’s financial expectations and requirements. In addition, one of the two bidders was unable to provide enough information about the origin of the funds that would have been used to acquire the airline group. 

As a result, Estonia’s Climate ministry, which is overseeing this process, has decided to cancel the sale. 

Nordica, which continues to operate as of April 2024 despite the privatization setback, reported a loss of €19.1 million on total revenues of €107 million in 2023. 

In parallel to the potential sale of Nordica, the Estonian government is also considering the later sale of another entity called ‘Transpordi Varahaldus’, which owns Nordica’s fleet and leases them to the carrier.