EU approves € 351m loan from Finnish government to Finnair

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The European Commission has approved a loan from the Finnish government to Finnair (AJ, Helsinki Vantaa) of 351.38 million euros ($ 419.2 million), declaring it compliant with revised EU state aid rules in the age of Covid.

The measure, which will take the form of a hybrid loan, aims to compensate the carrier for losses suffered during last year’s forced travel stoppages between March 16 and December 31.

During the first compensation period, until June 30, 2020, the aid compensates Finnair for the overall loss of income caused by travel bans imposed in Finland, the EU and third countries. The second period starting in July, as many restrictions in the EU had been lifted by then, is designed to compensate Finnair for losses caused on specific routes.

The commission considered that for the latter period, the aid is proportionate, given that the quantitative road-by-road analysis that Finland submitted “appropriately identifies the damage attributable to the containment measures, and therefore the compensation not not exceed what is damage on these roads.

The loan also includes a claw-back mechanism whereby any possible public aid exceeding the actual damage suffered will have to be repaid to the Finnish state.

Finland has imposed some of the tightest travel restrictions in the bloc, and there have been disagreements within the government over whether to reinstate them in late January 2021. The country’s foreign ministry continues to advise against all but essential travel .

According to advanced ch-aviation fleets module, 22 of Finnair’s 37 aircraft are currently active, so that while all of its sixteen A350-900s are active, its inactive planes include four of its six A319-100s, all ten of his A320-200s, fifteen out of nineteen A321-200s, and all eight A330-300s. However, all twelve ATR72-500s and twelve ERJ 190-100LRif it leases with its minority subsidiary Nordic regional airlines NoRRA (N7, Helsinki Vantaa) are currently active.

Separately, Finnair revealed that on March 15, it had transferred a total of 36,903 of its own shares held by the company to the 28 participants of its share-based incentive program as a reward, spanning the years 2018 to 2020. The company now holds 1,437,193 of its own treasury shares. As previously stated, Finnair offers incentives to participating employees if it manages to grow its business over three-year periods in line with performance indicators and targets.

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