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Nordica acquired full ownership of Xfly from Polish LOT

The Estonian national airline Nordic Aviation Group (Nordica) and the Polish national carrier Polskie Linie Lotnicze LOT S.A (LOT) reached an agreement to end their joint venture in Regional Jet OÜ (Xfly). Nordica purchased LOT’s 49% share in Xfly, after which Nordica became its sole shareholder. TRINITI transport & infrastructure legal team – partner Tõnis Tamme and senior associate Ain Kalme, advised Nordica in the contract negotiations and assisted with the closing of the transaction.

Chairman of the Management Board of Nordica Erki Urva said that “Although the negotiations went on for a very long time, I’m really happy with the agreement we’ve reached”. “It’s also important that in the ‘breaking-up’, as it were, we’ve managed to stay friends, which ensures that our commercial cooperation will continue. All this means that Estonia’s national airline is now the 100% owner of Xfly, which operates as a capacity provider, giving us the freedom to make quick decisions ourselves if we need to – which is vital considering how much the coronavirus crisis has shaken up the aviation market.”

Rafał Milczarski, CEO & President of the Management Board of LOT Polish Airlines added: „I would like to thank Nordica for four years of mutually beneficial cooperation. In recent years, LOT has strengthened the offer of European connections from Tallinn and built high brand recognition of the Polish airline in the Baltic countries. During this time, LOT and Nordica crews made 63 658 flights together. As a result of the pandemic and significantly reduced demand for air connections, today we are completing this special journey. Bearing in mind the good relations between our companies, we will continue to cooperate on a commercial basis.”

Poland’s national carrier LOT acquired a 49% share in Nordica’s subsidiary Xfly in November 2016. The two airlines then started working together at a variety of levels, including sharing a ticket sales platform and operating flights, first between Tallinn and Warsaw and later on other routes. The Estonian and Polish carriers outsourced flight operation services from Xfly, which has since become the biggest Estonian airline. Both Nordica and LOT had big plans for Xfly, but the global pandemic saw the airlines’ operations all but grind to a halt overnight and they were forced to focus instead on simply staying alive. While LOT and Nordica are continuing to cooperate commercially, the decision was taken to place Xfly in majority ownership to ensure the subsidiary’s long-term future.