The Norwegian State will not provide further support to save Norwegian Air Shuttle

Norwegian Air Shuttle ASA (“Norwegian”) and Erik G. Braathen’s new airline company have both requested financial support from the Norwegian State in addition to the support schemes that have already been established for the industry. The government has decided that the state will not provide individual financial support to these companies.

Aviation is in the midst of a deep crisis on both a national level and globally, and there is much to suggest that this will remain the case for some time to come. Since the lockdown in March, the government has been in close dialogue with the industry and has implemented a range of measures together with the Storting in order to alleviate this situation: exemptions from a range of taxes; the state underwriting of airlines routes to ensure a minimum level of service; additional compensation to existing public obligation routes (FOT); support for airports not under state ownership; and a loan guarantee scheme for aviation of up to NOK 6 billion.

Overall, the state’s extraordinary measures to the aviation sector in Norway amount to NOK 14 billion so far in 2020.

In addition to this, Norwegian  has petitioned the state for support amounting to several billion Norwegian kroner, while Erik G. Braathen has requested state support as part of a funding package for a new Norwegian airline that Braathen and a group around him are in the process of launching.

‘We believe that the state’s primary concerns of ensuring that there is an adequate offering and healthy competition in the Norwegian aviation market will remain in place going forward. Given this, it is not justifiable use of tax payer funds to provide significant support packages to individual airlines at this time. Norwegian has requested financial support worth billions of kroner, and such support could be of great value to the company and distort competition. Norwegian aviation operators have a wide range of other, general schemes created by the government at their disposal,’ says Iselin Nybø (Liberal Party), Minister of Trade and Industry.

‘Air travel is a key part of the transportation offering in a country with spread population such as Norway, which is also why we wish to help ensure that there is a competitive aviation sector in place following the Covid-19 pandemic. In the short-term, the state’s goal is to ensure the existence of a minimum level of service offering in relation to airline routes. In the longer term, once the markets have normalised, the goal is for healthy competition in the Norwegian aviation sector.  The government has put in place a range of measures to remedy the situation affecting Norwegian air travel. We will be announcing details concerning the expansion and strengthening of these measures soon,’ says Knut Arild Hareide (Christian Democratic Party), Minister of Transport and Communications.

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