The Estonian government has authorised the Minister of Economy Taavi Aas as the representative of the state to approve the increase in the share capital of Nordica (ND, Tallinn Lennart Meri) and issue a total of EUR30 million euro (USD35.3 million) in state aid, but only after the full renationalisation of the virtual carrier.

Public broadcaster ERR has reported that Aas was asked to first finalise the talks with LOT Polish Airlines (LO, Warsaw Chopin) about the repurchase of the Polish carrier's 49% stake in Nordica's subsidiary Xfly (Estonia) (EE, Tallinn Lennart Meri) before the disbursement of the aid. Earlier this year, Aas said that the government was prepared to pay less than EUR1 million (USD1.2 million) for LOT's stake.

The aid will consist of EUR22 million (USD25.9 million) in new share capital injected by the state, as well as a EUR8 million (USD9.4 million) loan from state-owned financial institution Kredex. Under the terms of the state aid approved by the European Commission, the Estonian government will have to either sell its additional stake to a private investor or recover the injection from the carrier within seven years.

The new capital is supposed to cover losses suffered directly as a result of border closures and other COVID-related restrictions. At the same time, the additional loan will give the carrier a safety cushion to continue business going forward.

Nordica is a wholly-state-owned virtual carrier, which used to sell scheduled flights out of Tallinn Lennart Meri operated under first Adria Airways' and then LOT's code by its subsidiary Xfly (previously known as Regional Jet). However, since 2019, Xfly has been operating purely as an ACMI/charter specialist. While the terms of the state aid foresee the relaunch of 12 scheduled routes out of Tallinn Lennart Meri by Nordica, the details regarding the timing, the business model, and the network are very unclear.