A ruling passed in the second instance in Tallinn at the end of March 2021 could have drastic effects on the future of Nordica and Xfly: The appellate court ruled that Nordica is the legal successor to Estonian Air, which went bankrupt in 2015.
As a result, Nordica has to pay for Estonian Air's debts, according to local media reports. According to the EU Commission, the carrier received illegal state aid. The repayment was bypassed by filing for bankruptcy. The state then established Nordica as the new flag carrier. The court of appeal is of the opinion that a kind of seamless transition has taken place and that the new company should therefore be regarded as the successor.
Nordica will also have to pay for the state aid ordered to be repaid, which led to the bankruptcy of Estonian Air. The financial situation is tense, however, because the state-owned company was only recently rescued by means of a state-guaranteed loan and additional grants. Furthermore, according to the ruling, Nordica has to pay for outstanding Estonian wages in the amount of around 1,5 million euros as well as for all other liabilities.
However, Nordica CEO Erki Urva said in the meantime that the outstanding Estonian wages could be paid. Regarding the state aid ordered for repayment in 2015, he said in a TV interview that there are currently no indications that the government will actually demand it from Nordica. The further development remains to be seen, because the judgment can still be appealed to the Supreme Court.