Finland will guarantee Finnair’s 600 million euro pension premium loan to aid Finnish flag air carrier. However, the decision also needs the approval of the Finnish Parliament.
The state of Finland owns almost 56% of Finnair's shares.
“The State owns 55.8% of Finnair’s shares. The State is a responsible owner, and we are now facing a very serious situation both nationally and internationally, which is why the State must support Finnair. The route connections maintained by Finnair are very important for Finland’s security of supply, freight and passenger transport, and the company has a significant impact on our national economy. We want to ensure that Finnair’s activities are not interrupted, even though the company is suffering from the sudden change in the market situation caused by the coronavirus,” said Minister Tytti Tuppurainen in the press release.
This week Finnair issued its second profit warning in three weeks, saying it would report a substantial comparable operating loss for 2020 because it is cutting about 90% of its normal capacity from the start of April due to coronavirus (koronavirus, in Finnish).
“In the coronavirus epidemic, the comparable operating result for 2020 is becoming significantly weaker than last year", Finnair said in its stock exchange release 16 March.
Finnair normally flies 110 routes and about 12,000 flights per month, but capacity cuts will reduce the number of flights to an estimated 1,600 flights per month.
“With the state guarantee, Finnair aims to further solidify its cash position and business continuity even if the coronavirus situation prevails longer than currently anticipated,” Finnair said in a separate statement.
Norway will also back Norwegian airline with credit guarantees worth up to 3 billion Norwegian Krone (nearly 500 million euro).