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ESA approves prolongation of support to airlines in Norway

Christian Fernsby ▼ | October 19, 2020
The EFTA Surveillance Authority (ESA) has approved the extension of the current guarantee scheme for airline operators in Norway until 31 December 2020.
Norway airlines
ESA   Norway airlines
Strict containment measures, including travel restrictions and quarantine measures, have been reimposed across Europe after the summer. The decline in travel due to such restrictions continues to have an adverse effect on the liquidity and overall financial situation of airlines.

Topics: Norway

The guarantee scheme aims to make funds more accessible to airlines and ensure the continued provision of aviation services in the aftermath of the coronavirus outbreak. The continuing challenges in the airline sector justify the prolongation proposed by Norway.

The demand for airline services continues to decrease and airlines fail to fill up their flights. In this respect, Avinor reports a decline in the number of passengers on both domestic and international flights in August 2020 compared to July 2020.

In the second quarter of 2020, Statistics Norway reported a decline in passengers of 74.9% on commercial domestic flights and 97.6% on commercial international flights compared to the same quarter last year. In the same period, the number of seats dropped by 55.4% on commercial domestic flights and by 90.1% on international commercial flights.

According to Avinor’s monthly report for August, the number of terminal passengers for 2020 is currently down by 49% for domestic flights and 71.3% for international flights, compared to last year.

This decline in travel therefore continues to put tremendous pressure on the airlines’ liquidity and their overall financial situation. In Norway, the on-going crisis has resulted in the dismissal of several hundred pilots and even more ground personnel.

Currently, only roughly 50% of the total budget of the Guarantee scheme has been committed. Specifically, the Guarantee scheme has so far provided access to financing to Norwegian Air Shuttle (NOK 3 billion) and Airwing (NOK 9 million).

As the coronavirus crisis has proven more severe and long lasting than first anticipated, the Norwegian authorities find that airlines will need access to the Guarantee scheme also after 31 October 2020.

The decision (15 October), extends the scheme for an additional two months, until 31 December 2020.

The EFTA Surveillance Authority (ESA) monitors compliance with European Economic Area rules in Iceland, Liechtenstein and Norway, enabling them to participate in the European Internal Market.