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Government plans Finnair bailout with €600m subsidy

The airline has announced cancellations of around 90 percent of its flights due to the coronavirus outbreak.

Finnairin lento Singapore-Helsinki 15.3.2020
Inside a Finnair aircraft. Image: Kai Jaskari /Yle

Finland's is gearing up to grant a state guarantee of up to 600 million euros to national airline Finnair to help the firm weather the economic impacts of the coronavirus epidemic.

The Ministerial Committee on Economic Policy considered granting the guarantee in the form of a statutory pension premium on Thursday, but such a move still requires the approval of MPs.

Over the past several weeks, due to the spread of coronavirus, Finnair has continued to gradually cancel flight routes to destinations it has served. To date, the airline has announced extensive, temporary cancellations of around 90 percent of its flights, foreign and domestic.

The Finnish state holds 55.8 percent of Finnair shares and government’s state ownership steering minister, Tytti Tuppurainen, said in a statement that keeping the airline in business was a matter of national security.

"The situation is very serious both nationally and internationally and therefore the state must support Finnair. The routes the company maintains are very important for Finland’s preparedness as well as for freight and passenger transport. The company’s impact on our economy is significant. We want to make sure that Finnair’s operations are not interrupted due to the rapid changes in the market situation caused by coronavirus," Tuppurainen said.

Finnair shoring up support

In a company statement issued on Friday, Finnair CEO, Topi Manner, said he was hopeful about the company's future despite the unprecedented circumstances.

"The coronavirus is already now the biggest crisis in the 100-year history of aviation. Even though Finnair is among the strongest airlines at the start of the coronavirus crisis and we have a strong cash position and a healthy balance sheet, with this plan we aim to secure that we weather the exceptional situation and, considering the circumstances, are able to continue our operations from a steady basis once this situation is over," Manner said.

The company also announced it had managed to raise a total of 175 million euros in revolving credit.

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