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The crown crisis hits Hurtigruten hard. Since mid-March, 14 of the 16 ships have been out of service, and nearly 3,000 employees have been laid off.
According to the shipping company itself, the company has canceled trips for more than NOK 700 million. In the coming weeks the figure will exceed one billion, during the summer the figure will probably double.
On Friday, Finance Minister Jan Tore Sanner (H) approached. He announced that he was lowering the threshold for companies to obtain loans from the Government Bond Fund.
This happened after Hurtigruten and his employees loudly protested that they were left out of the NOK 50 billion crisis loan package.
The reason was that the company for strong punch
Both employees, Hurtigruten and various parties in the Storting are unsure whether control of the Ministry of Finance will help the company in crisis.
– The fact that the government is now listening and adjusting the investment mandate to the Government Bond Fund is a step in the right direction, says Rune Thomas Ege, head of communications at Hurtigruten.
He says it remains to be seen if the grip has any real effect.
“It is too early to say whether this will help secure the financial situation and whether this is really a solution that helps us gradually step up activity and get our employees back to work,” says Ege.
– People scared by their work
CROWN CRISIS: Hurtigruten is the world’s largest shipping cruise company and one of Norway’s largest shipping jobs, with more than 3,000 employees. For eight weeks there have been boom stops.
Photo: Atle Markeng / NRK
Share that fear with nearly 3,000 employees who are now laid off.
One of them is Helge Værnes, who works on board the fast shipping ship “King Harald”.
For eight weeks, he and his colleagues on board have been on leave of the “best job in the world.”
He has been doing carpentry in the cabin and looking for other jobs that Nav needs.
WILL WORK: Helge Værnes counts the days until she returns to work.
Photo: Private
– I don’t have a pacifier. The cafeteria and restaurant industry are among the most affected.
He says that people are terrified of their jobs.
– It’s quite real that there can be a sudden stop, says Værnes.
Was cursed
The fact that it is still uncertain whether Hurtigruten receives help from the crown provokes Hurtigruten’s fired staff.
Hurtigruten’s future is debated in the Facebook group Hurtigruten must be saved.
Photo: Screenshot
– I’m just cursed. After all, it is the state that has deprived Hurtigruten of its income base. Then the state must also establish and compensate for the financial consequences.
This week the idea came up to provoke a little public outrage on Facebook.
The same night, the Facebook group Hurtigruta had to be saved.
During the night, it gained 7,000 members. In three days it has more than 14,000 members.
– Hurtigruten means a lot. It’s not just about 3,000 jobs. The disappearance of Hurtigruten tourists also affects hundreds of small and large partners across the country, says Værnes.
Q: – Return requirements for the hard
The Center Party, which has demanded that the government defend Hurtigruten, understands that Hurtigruten is not sure if Sanner’s medicine works.
The reason is that the government places high demands on the performance of bond loans.
– Hurtigruten has a special role in Norway. Ensuring continuous operation is very important, says Sp leader Trygve Slagsvold Vedum.
Photo: Bjørg Riibe Ramskjell
– We have to work very hard. The government has set repayment requirements so strict that the state should make money on the loan. We believe this is contrary to what the Storting has decided.
Both the Center Party, the Ap and the Norwegian Seamen’s Association demand that the return requirement be removed.
“It should not be a goal for the State of Norway to earn the most money with these loans,” says Vedum.
Sanner: – Not a state aid measure
– The bond fund will primarily help more people participate in the bond market, says Jan Tore Sanner.
Photo: Terje Pedersen
Finance Minister Jan Tore Sanner (H) tells NRK that the Government Bond Fund is not intended to be a state aid measure.
– The fund must not be adapted to individual companies. We have implemented other schemes aimed more at helping companies in crisis.
The condition that the bond fund does not involve state aid stems from the law, which a single Storting has agreed to, he explains.
– The return requirement supports only that assumption.
He says comments received by the finance ministry show that the move worked as planned.
– Along with other measures, it has contributed to greater optimism, says Sanner.
– The alternative is bankruptcy
Jørn Lorentzen has worked for Hurtigruten since the mid-1980s, including as a chef and chef. Currently, he works as a chief workshop delegate for 700 employees.
Photo: Norwegian Association of Sailors
The Norwegian Federation of Sailors, which organizes 700 of the layoffs, is not convinced by the Minister of Finance.
At Principal Representative Jørn Lorentzen’s office in Hurtigruten in Tromsø, the phone rings one.
– We try to help as best we can. Everything is sad, says Lorentzen, who is also a member of the board of directors of the Norwegian Seamen’s Association.
Staff fear houses and homes. And his future. We have families where they both work on board, explains Lorentzen.
He fears that the government will not realize the seriousness of the situation.
– The alternative is bankruptcy. In the event that passengers leave, it is risky to try to take our boats to the sea. No one is profitable, neither the employees nor the company.
“British Owners and Chinese Ships”
AMERICAN TOURISTS: Norwegians on Norwegian vacations can never replace the loss of foreign tourists, says Hurtigruten. The summer season will be one of the hardest in the history of the company.
Photo: Eskil Wie Furunes / NRK
In the 2020 state budget, Hurtigruten receives just over NOK 850 million in state revenue to sail along the Norwegian coast.
Therefore, there is little reason to sew, many people have said on social media in recent days.
Hurtigruten is reported to have British owners on social media. Several claim that three of the ships have been sold to China, and that the shipping company is more concerned with foreign cruise passengers than with local travelers.
Lorentzen knows these arguments well.
ROALD AMUNDSEN: Hurtigruten had to send 3,000 passengers home in a few days when the crown epidemic was a fact. Three of the ships were then in Antarctica, like the MS Roald Amundsen expedition ship.
Photo: Shayne McGuire / Hurtigruten
– Some believe that state money should keep Hurtigruten afloat. But it’s not that simple. The calculation shows that this year it costs around NOK 2.2 and 2.5 billion to sail 11 ships along the coast without passengers. That means a loss of 1,400 million. No company is equipped for such large losses.
In addition, he explains, the entire agreement with the state is based on commercial operations.
These are the consequences of the crown for Hurtigruten
The crown crisis has had dramatic consequences for Hurtigruten:
- Almost 3,000 employees are laid off, 14 out of 16 ships are in storage.
- Virtually all income disappeared overnight.
- So far, Hurtigruten has canceled the trips for more than NOK 700 million.
- In early summer, the figure will have passed 1 billion crowns. If the crisis continues through the fall and winter, the number will multiply.
- Norwegians on a Norwegian holiday can never replace the loss of foreign tourists. The summer season will be one of the hardest in the history of the company. Source: Hurtigruten
Others believe that owner-owned UK-based TDR Capital should be able to collect.
– It’s not that simple either. This is an international crisis. Major cruise lines are likely to announce offers for the crown.
I was close to bankruptcy
MUST BE YEAR OF REGISTRATION: Hurtigruten entered 2020 stronger than ever. The company made record profits in 2019, with an operating profit of almost NOK 1.4 billion. 2020, according to Hurtigruten, was set to break all records in all markets.
Photo: Jan Kenneth Aarsund
Hurtigruten management denies that the company and the ships have been sold to China.
That is not right. We have taken loans in various places, including in Chinese banks. Then we put the boats as collateral for the loans. It’s a perfectly normal way to access loans, says communications manager Rune Thomas Ege in Hurtigruten.
Communications Manager Rune Thomas Ege at Hurtigruten.
Photo: Hurtigruten
A few years ago, Hurtigruten was practically bankrupt. With new owners, including British TDR Capital, Petter Stordalen and Trygve Hegnar, decades of deficits have turned into profits.
Ege emphasizes that the new owners have invested billions in the company, without the owners having paid a single penny in dividends.
– Everything has been invested in the company again to ensure Norwegian jobs and further growth. Hurtigruten is a Norwegian company. Our head office is in Norway, we pay taxes and fees in Norway, we are one of the largest maritime jobs in Norway and our business creates value.
This is what the Association of Sailors and the Hurtigruten can do:
a) Use GIEK in a combination of SMB + elements and the aviation package. The scheme, that is, the maximum amount, must be flexible enough to provide the opportunity to meet capital requirements with private investors or banks also for large companies.
b) Separate parts of SOF in a separate framework for the travel and communications industry. The framework must assume that a proportion of the loan capital must come in parallel from the private market. At-risk assessments, including credit assessments, must be based on normal earnings prior to the introduction of the pandemic measures. The point remains to ensure liquidity; non-equity The framework of this scheme must also be adapted to large national companies.
c) Adapt the SOF investment mandate. SOF’s investment mandate is adjusted to accommodate the risk appetite necessary to satisfy a broader range of companies. This requires that the pre-crisis credit assessment be used to ensure the willingness to make the investments.
May start no later than May 21
SEND TO KAI: Travel giant Giant Hurtigruten has laid off nearly 3,000 employees and is forced to ship the docks. Here from Stornespiren in Ålesund.
Photo: Øyvind Sandnes / NRK Luftfoto
Hurtigruten now sails on a custom route, with two ships between Bodø and Kirkenes. The boats are built to carry 4 to 500 people who now sail with 4-5 passengers and local merchandise.
Sailing is a clean expense, with Hurtigruten losing between NOK 12-15 million per month.
The Hurtigruten Expedition Ship has also been docked at several different ports.
Several of the expedition’s cruises to Svalbard, the Norwegian coast, Iceland and the Northwest Passage were canceled.
Additionally, Hurtigruten has had to cancel the entire Alaska season for the hybrid MS “Roald Amundsen”, and the ship is heading to Norway.
So far, employees of the coastal route have been laid off in June. The earliest Hurtigruten can start again is from May 21.
At home in Frosta, Helge Værnes goes and crosses her fingers for good news.
He is ready to tackle short term.
– We want to continue, with people from all over the world. Only aboard the “King Harald” people from up to ten nations work. It is a forward-looking company that constantly needs new employees.
He prefers not to think of the alternative.
– The ones we lose the most in bankruptcy are the Norwegian employees and the Norwegian population who lose by far the largest tour operator in Norway.
EMPTY: The room of the fast-moving “Richard With” ship is empty on Saturday afternoon.
Photo: Tea Isabel Myrvold / NRK
