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At the meeting with the government on Friday, the airlines will request direct cash support, which has been received by the rest of the business community. – This is about to turn into a crisis you can’t borrow from, says Torbjørn Lothe at NHO Luftfart.
Norwegian, SAS and the small Widerøe today enter the premises of the Ministry of Commerce and Industry at Kongens Gate in Oslo, with a request to recharge money.
Gorm Kallestad / NTB scanpix
Published:,
Friday at 12 noon, a very heavy Norwegian aviation crew will head to the premises of the Ministry of Trade and Industry in Oslo. Then both Norwegian CEO Jacob Schram, SAS Executive Vice President Kjetil Håbjørg, CEO Stein Nilsen at Widerøe and Torbjørn Lothe, the CEO of their industry association NHO Luftfart.
The message conveyed through the latter is clear:
– This is about to turn into a crisis that you cannot borrow from, Lothe tells Aftenposten / E24.
– This has been given a scope that no one could predict, and that now requires other types of instruments. And then we believe that the cash supported compensation scheme is one of the additional instruments that should be included. It will not be discriminatory and will be aimed at the industry, Lothe continues.
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Has already received billions
The recipients of this message are an equally heavy team from a government in full swing with the refinement of the state budget for 2021. In the blue corner are Trade and Industry Minister Iselin Nybø, Transport Minister Knut Arild Hareide and the two secretaries of State Geir Olsen and Magnus Thue of the Ministry of Finance.
They will probably be able to remind envoys of the aviation industry that the authorities have already helped aviation with several billions of crowns.
It is true that airlines have been excluded from the general cash support scheme for the business community, of which Lothe now wants them to get a variant.
Do Trade and Industry Minister Iselin Nybø and Transport and Communications Minister Knut Arild Hareide have more to offer airlines than NOK 2.99 billion in unused loan guarantees?
Håkon Mosvold Larsen
But airlines have benefited so much from tax breaks, VAT cuts, capacity purchases, and a separate loan guarantee scheme (see table below).
However, all these measures have in common that they expire at the end of October at the latest. At Friday’s meeting, airlines will also request the continuation of several of the current measures.
– It is necessary to continue with some of the existing tax exemptions, such as the tax on air passengers and the reduced VAT. We believe the buying plan should continue through the winter as well, says Lothe.
Fasten your seat belts!
Lothe predicts a long dark winter for her members.
– Norwegians have stopped traveling for holidays, foreigners have stopped coming to Norway and the business market is not recovering because the market for courses and conferences is completely dead and all major events have been canceled, says Lothe.
According to the NHO director, Avinor has made a forecast indicating a 50 percent drop in passenger numbers in 2021, despite the fact that a vaccine will be ready for use in Norway during the summer.
In that case, there may be more than 40 million fewer passengers through Avinor airports in 2020 and 2021. Norwegian, SAS and Widerøe together account for around 27 million of these lost passengers.
NHO Aviation Director Torbjørn Lothe requests cash reloads, no more loans, from SAS, Norwegian and Widerøe.
NHO Aviation
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NOK 2.99 billion available
The state provided NOK 6 billion in loan guarantees to Norwegian airlines throughout March. But figures from GIEK, which administers the scheme, show that only Norwegian and the small air taxi and charter company Airwing have used the loan guarantees. Norwegian borrowed the maximum from the airline, NOK 3 billion, while Airwing borrowed NOK 9 million.
But therefore 2.99 billion crowns are not used.
Therefore, Aftenposten has asked Norwegian CFO Geir Karlsen if they will now ask the government for access to some of the 2.99 billion kronor in loan guarantees that have not been used. Karlsen has yet to respond.
SAS has so far been fixed by increasing share capital and refinancing other debts. And so far, Widerøe has found it cheaper to borrow from its banking connections within the Sparebank1 system.
Widerøe had an equity ratio of about 40 percent when it hit the crown and has therefore received cheaper bank loans than state-guaranteed loans to CEO Stein Nilsen would cost.
Marius Lorentzen / E24
Complaints about the guarantee fee
It’s nice to have the guarantee that the state provides for 90 percent of the amount borrowed, but airlines still think the price charged by the state is high.
– The state (GIEK) must have a guarantee commission of 2 percent of the loan amount. This is added to the margin of the bank that lends the money. This means that the total financing cost will be higher than the financing we have today, says communications director Silje Brandvoll in Widerøe to Aftenposten / E24.
She still believes that Widerøe can wear the scheme this fall.
– We have concrete plans to use that line of credit, but we haven’t gotten that far yet, says Brandvoll.
