On August 1, Nordic Aviation Group (Nordica) began its turnaround efforts by enlisting the expertise of an international consulting company to guide the airline back to profitability.
David O’Brock, Chairman of the Board of Nordic Aviation Group, acknowledged the severe deterioration in Nordica’s economic situation in the preceding months. Revenues fell significantly below expectations, while expenses surpassed revenues. Several factors contributed to this predicament, including delayed delivery of leased planes, shortage of personnel and equipment, increased maintenance times and rising input costs. Consequently, Nordic Aviation Group reported a consolidated six-month turnover of €54.9 million and a loss of €7.2 million for the first six months of 2023, according to preliminary data.
To ensure the company’s sustainability, the council, in coordination with the general meeting, decided to bring in top international aviation expertise from Knighthood Global. The consulting company’s primary task will be to restructure the airline’s operations in a financially viable manner. The contract with Knighthood Global is set for up to six months, during which the entire company’s operations and cost structure will be reviewed.
The challenging situation was also attributed to an overly optimistic expansion strategy adopted at the end of the previous year, which adversely impacted the company’s financial health, as mentioned by the Chairman of the Council.
The turnaround team, led by Remco Althuis, former executive at KLM, Etihad Airways and Air Seychelles, began its work on August 1. The council expects the team to propose a viable plan to steer the company towards profitability by the end of September this year. Positive cash flows are also expected to be achieved in the coming months.
Additionally, a special inspection will be conducted at Nordica to assess the current activity and situation, following the instruction of Climate Minister Kristen Michal during the general meeting of shareholders on July 27. Nordica aims to appoint a special inspection executor by the end of August and expects the interim report to be delivered by the end of September.
Last week, Jan Palmér, the current Chairman of the Board, asked to resign and the council approved his resignation. In response, Remco Althuis has been appointed as the new Chairman of the Board of Nordic Aviation Group. With his extensive experience in the aviation industry, Althuis is expected to lead the company through its turnaround efforts.
