Finnair announced in its Stock Exchange Release on 16 March 2020 that it is implementing a substantial funding plan in order to secure the company’s future even in a prolonged coronavirus situation. The plan includes funding instruments such as available credit lines, sale and leasebacks of unencumbered aircraft and a substantial, market-based pension premium loan.
The available credit lines included in the funding plan consist of a revolving credit facility totaling to 175 million euros which has already been raised. The statutory pension premium loan totals to 600 million euros, and it has been proposed that the State of Finland would guarantee the loan. The Finnish Government’s Ministerial Committee on Economic Policy has considered the guarantee matter on 19 March 2020.
It is still required that the Finnish Parliament approves the guarantee arrangement. The premium pension loan can be raised, if necessary. With the state guarantee, Finnair aims to further solidify its cash position and business continuity even if the coronavirus situation would prevail longer than currently anticipated.
“The coronavirus is already now the biggest crisis in the 100-year history of aviation,” says Topi Manner, Finnair’s CEO.
“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.”