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25 March 2020
On 16 March 2020 the government declared a state of emergency and announced that schools and public spaces will be shut down until 13 April 2020.(1) The government also published a 19-point list of emergency legislation that came into effect on 18 March 2020 after being approved by Parliament, including measures to close the country's borders and suspend passenger traffic to Finland. Preparations for such measures have already taken place. Parliament's constitutional committee is currently discussing the approval of emergency legislation. On 23 March 2020 the government announced that they are preparing to implement further movement restrictions to slow the spread of the novel coronavirus, such as ordering bars and restaurants to close and limiting movement in general.
The main Finnish airline company Finnair has already announced various restructuring measures in recent weeks (eg, staff layoffs and other cost-cutting measures) due to the COVID-19 outbreak affecting Finnair's Asian connections. On 16 March 2020 Finnair announced that they are cutting 90% of its normal flight capacity and consequently, cancelling the majority of its flights temporarily as of 1 April 2020 until the situation regarding the coronavirus pandemic improves.(2) The cancellation will affect between 1,500 and 2,000 flights from 16 March 2010 until 31 March 2020, with only critical air connections for Finland maintained.(3)
Although the coronavirus situation and its impact on the demand for air travel is currently precarious, Finnair has announced that it will continue to monitor the situation and that it is ready to ramp up operations should the situation improve.
On 17 March 2020 Finnair also announced that it has postponed its annual general meeting 2020 until further notice, following the example of many other listed companies.
Finnair has also taken steps in order to secure the company's financial position in the prolonged coronavirus situation. Such steps have included, among others, raising a revolving credit facility totalling to €175 million, contemplated reborrowing of statutory pension premium loan in the amount of €600 million and sale and leaseback of unencumbered aircraft. More importantly, the state, which is a majority shareholder of Finnair, has proposed to guarantee the reborrowing of the pension premium loan. The guarantee arrangement is still pending the approval of Parliament.(4)
The following occurrences and indications of the following issues have been encountered, but further issues may arise as matters develop:
For further information on this topic please contact Ville-Veikko Vänttinen or Maria Lehtimäki at Waselius & Wist by telephone (+358 9 668 9520) or email (firstname.lastname@example.org or email@example.com). The Waselius & Wist website can be accessed at www.ww.fi.
(1) For further details please see here.
(2) For further details please see here.
(3) For further details please see here.
(4) For further details please see here.
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