Government plans to support Finnair with EUR 600 million State guarantee
At its meeting on 19 March 2020, the Ministerial Committee on Economic Policy provisionally agreed that the Government would grant a State guarantee of up to EUR 600 million to support Finnair’s financing needs. The guarantee arrangement requires the consent of Parliament.
The situation caused by the coronavirus is completely exceptional, which means that businesses’ funding channels are not functioning normally. Finnair is preparing in advance for a situation where it may need to borrow earnings-related pensions to secure additional funding if no other funding source is available in the coming months. Doing so always requires a guarantee, which in normal circumstances would be a bank guarantee. Since no bank guarantees are available, Finnair has applied for a State guarantee.
“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,” says Minister Tytti Tuppurainen, who is responsible for ownership steering.
Even the strongest airlines are currently facing difficulties and have asked their states for help. The change in the market situation is so drastic that even a solvent company such as Finnair may need support as the situation persists.
Inquiries: Tytti Tuppurainen, Minister of European Affairs and Ownership Steering, requests for contact via Tino Aalto, Special Adviser, [email protected], +358 50 436 9188, Minna Pajumaa, Senior Ministerial Adviser, Prime Minister’s Office, [email protected], +358 29 516 0147