Norway is to set extend its aviation loan guarantee scheme until the end of the year in a move it hopes will make it more attractive to airlines.
The Norwegian government launched the NKr6 billion ($659 million) loan guarantee scheme in March, initially running it until the end of June. It later extended the scheme until the end of October and yesterday said it is proposing to further extend the withdrawal period for the scheme until 31 December.
Norwegian trade and industry minister Iselin Nybo says: ”The change we are now proposing will facilitate that the scheme can be of help to more airlines than those who have so far used it.”
The NKr6 billion loan guarantee scheme applies to airlines with Norwegian operating licences. Half of it was directed at Norwegian, NKr1.5 billion at SAS and the remainder at Wideroe and other airlines. The Government says that so far, Norwegian and Airwing have used the scheme, which is managed by the Guarantee Institute for Export Credit (GIEK).
“The situation for aviation today is more protracted and serious than expected when the scheme was originally adopted in March,” says Nybo. ”The government will contribute to maintaining Norwegian aviation through a financially very demanding period.”
In May, following a debt-conversion programme, Norwegian entered into a NKr2.99 billion state supported term facility agreement arranged by DNB Bank. The carrier, which remains in ‘hibernation mode’ operating around 25 aircraft while curtailed air travel demand remains, recently said it would require more funding next year to survive the winter.