EU approves €351mn Finnish gov’t loan to Finnair

The European Commission has approved a Finnish government loan to Finnair (AY, Helsinki Vantaa) of EUR351.38 million euros (USD419.2 million), declaring it to be in line with the European Union’s revised Covid-era state aid rules. The measure, which will take the form of a hybrid loan, aims at compensating the carrier for losses suffered during last year’s enforced travel shutdowns between March 16 and December 31. In the first compensation period, until June 30, 2020, the aid compensates Finnair for the overall loss of income caused by the travel bans imposed in Finland, the EU, and non-EU countries. The second period starting in July, given that many restrictions in the EU had been lifted by then, is designed to compensate Finnair for losses caused to specific routes. The commission found that for the latter period the aid is proportionate, as the route-by-route quantitative analysis that Finland submitted “appropriately identifies the damage attributable to the containment measures, and therefore the compensation does not exceed what is necessary to make good the damage on those routes.” The loan also includes a claw-back mechanism in which any possible public support in excess of the actual damages sustained will have to be paid back to the Finnish state. Finland has imposed some of the toughest travel restrictions in the bloc, and there were disagreements within the government on the decision to reinstate them in late January 2021. The country’s Foreign Ministry continues to advise against all but essential travel. According to the ch-aviation fleets advanced module, 22 of Finnair’s 37 aircraft are currently active, so that while all of its sixteen A350-900s are active, its inactive aircraft include four of its six A319-100s, all ten of its A320-200s, fifteen out of nineteen A321-200s, and all eight A330-300s. However, all of the twelve ATR72-500s and twelve ERJ 190-100LRs it wet-leases from its minority-owned subsidiary NoRRA Nordic Regional Airlines (N7, Helsinki Vantaa) are currently active. In related news, Finnair has revealed that on March 15 it transferred a total of 36,903 of its treasury shares held by the company to the 28 participants of its share-based incentive scheme as a reward payment, covering the years 2018 to 2020. The company now holds 1,437,193 of its own shares as treasury shares. As previously reported, Finnair provides incentives to participating employees if it succeeds in expanding its business over three-year periods in line with performance indicators and targets.