Nordica reports rising turnover and PAX but loss of €5.4m

posted on 1st July 2019 by Justin Burns
Nordica reports rising turnover and PAX but loss of €5.4m

Nordic Aviation Group (Nordica) has reported that its annual turnover increased 30 per cent to €107.7 million in 2018 and it carried 33 per cent more passengers but it still posted a loss of €5.4 million for the year.

The Estonian airline company said 765,000 more passengers flew with it last year as the number of flights it operated on its route network grew from Talinn by 38 per cent to 16,000.

In total, throughout 2018, approximately two million people flew on the Tallinn route network and in foreign markets.

Nordica board member, Kristi Ojakäär said growth of air traffic and the high number of passengers did not result in positive economic results.

Ojakäär added: “The financial performance was primarily influenced by the continuing loss of the Tallinn network and the costs of changes in air traffic, including fixed costs for aircraft.”

The parent company’s unconsolidated loss constituted nearly €5 million of the financial result, including additional price agreements for the airline services provided by its subsidiary, Regional Jet, for 2018, which was concluded in the framework of the renewal of cooperation with LOT Polish Airlines (LOT) last week.

According to Ojakäär, Nordica also reached an agreement with LOT to invest in the joint venture, Regional Jet. “A new balance has been found between the partners, enabling us to develop the company together,” Ojakäär said.

“Nordica has a clear goal to increase profitability. The changes made in the line network at the beginning of this year have already had a positive effect on this year’s financial results, and from autumn we will focus only on profitable activities, stop flying unprofitable routes, and focus on increasing the volume of foreign flights through the subsidiary, Regional Jet,” added Ojakäär.

Ojakäär said the provision of air services to major airlines, such as SAS and LOT, was successful in 2018 and has high growth potential in the years ahead. “The Regional Jet customer base is growing, and we believe that this business is a long-term perspective,” Ojakäär added.

In order to support Regional Jet business volumes in 2018, Nordica’s fleet increased by three aircraft and further fleet increases are planned over the coming years.

Aircraft added in 2018 started to implement international agreements of subsidiary Regional Jet, mainly to the largest Scandinavian airline, SAS.

Founded in 2015, the Nordic Aviation Group AS (Nordica) has grown to become the largest airline in Estonian history. Since 2016, Nordica has been cooperating with LOT. Regional Jet, a subsidiary of Nordica (51 per cent) and LOT (49 per cent), provides air services to LOT, Nordica, SAS, Air Serbia, Flyby and various contract partners in Europe.

Regional Jet operates 19 aircraft and transports around two million passengers each year.