The state intends to pump EUR 350 million to strengthen the capital base of the Finnish airport operator Finavia in order to combat the consequences of the coronavirus pandemic for the company.
The Committee of Ministers for Economic Policy has recommended that the government seek permission from Parliament to recapitalize, which is planned for next year’s budget.
With this payment, Finland hopes to secure the future of the state-owned company. About 90 percent fewer passengers have passed through Finavia’s airports since the outbreak of the coronavirus pandemic compared to last year.
According to the financial adviser Minna Pajumaa from the Corporate Governance Department of the Prime Minister’s Office, the company’s financial situation is not acute, although the business has suffered significant passenger losses.
"The company mapped the austerity measures as soon as the crisis began." Pajumaa told the news agency STT.
According to Finavia, the goal of the savings program, which came into force in March, is to save a total of EUR 200 million. It includes large cost savings from operational activities as well as long-term layoffs for all employees.
Finavia’s net sales in 2019 were approximately EUR 390 million, as approximately 21 million passengers passed through its 21 airports.
The cost of strengthening Finnair’s capital base was almost EUR 300 million
Finavia is a wholly state-owned company.
"As a long-term owner, the state wants to develop Finavia’s competitiveness and ensure that the conditions for good domestic and international air connections are maintained throughout Finland," The minister responsible for European affairs and ownership says Tytti Tuppurainen (SDP).
Finland had previously participated in strengthening the capital base of the national air carrier Finnair. The government asked Parliament for a mandate of up to € 700 million. However, according to Pajumaa, the state’s share in the recapitalization amounted to EUR 286 million.
The government is rationalizing its decision to pump money into Finavia’s extensive development program despite the loss of passengers, noting that the investment will create growth opportunities after the crisis.
The development program includes, among other things, the Helsinki-Vantaa expansion project and the development of Lapland airports.
Source: The Nordic Page