At the start of the week, months of speculation that Spirit Airlines (SAVE) would soon file for bankruptcy were confirmed by the airline.
The low-cost airline, struggling under $3.8 billion of debt, sent customers a letter saying that it had filed for Chapter 11 protection after two merger proposals — with JetBlue (JBLU) and Frontier Airlines (FRON) — fell through.
The filing enables the airline to continue running flights as usual while it looks for a way to refinance the debt.
And the filing showed Spirit received an immediate $350 million in additional financing that the airline said would enable flyers to “continue to book and fly now and in the future.”
But Spirit isn't alone in its financial troubles: Another airline has ceased operations and said it would file for bankruptcy.
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Another low-cost airline ceases operations
While Spirit’s popularity in the U.S. among budget-tight travelers still leaves it with opportunities to emerge from bankruptcy proceedings, another low-cost airline that ran into financial struggles is closing shop.
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Estonian budget airline Nordic Aviation Group — better known under the brand Nordica — and offshoot charter provider Xfly are filing for bankruptcy, according to Aviation24.be.
Nordic Aviation Group's board of directors reportedly confirmed that the airline ceased operations, and CEO Remco Althuis announced the immediate start of bankruptcy proceedings, including the return of leased aircraft and the notification of relevant authorities.
Founded in 2015 and headquartered in the capital of Tallinn, Estonian-state-owned Nordica started up by running a number of routes to nearby Baltic and Nordic capitals such as Helsinki, Oslo and Copenhagen on top of other flights to European capitals such as Amsterdam and Paris.
The airline’s fleet included an Airbus A320-200 (EADSY) and three Bombardier CRJ900ERs (BDRAF) . For the past few years the wider Nordic Aviation Group has also been leasing aircraft to other airlines or companies that need them under its Xfly brand.
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Nordica turnaround faced a challenging path
“Nordic Aviation Group and Xfly have gone through a challenging path over the past 15 months since the airline began its turnaround process in August 2023,” Nordic Aviation Group Chairman and Chief Executive Remco Althuis said in a statement.
“This journey has been marked by immense efforts from the entire team to bring the airline to a new and sustainable footing.”
Earlier in the year, some observers had speculated that Lars Thuesen, the executive who pulled the Danish airline Jettline out of bankruptcy in the mid-2000s, would step in for Nordic Aviation Group.
While the airline said there have been some discussions with “both sides showing goodwill," they ultimately did not pan out into an investment offer.
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Some travelers reportedly received emails about canceled Nordica flights back in September.
Now, creditors and companies that leased aircraft to Nordic Aviation Group have been informed that the company is filing for bankruptcy.
“The potential investor informed us about his intention not to proceed with the privatization, as the associated risks were too high,” Nordic Supervisory Board Chairwoman Kadri Land said in a statement.
“Consequently, the Management Board informed the Supervisory Board about its intent to cease the operations of Nordic Aviation Group and Xfly and start the necessary proceedings to file for bankruptcy.” The filing reportedly would be in an Estonian bankruptcy court.
Baltic News Network reported that in October, Nordic Aviation employed 579 people, 286 of them based in Estonia.
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