The Finnish government plans to support the national flag-carrier Finnair granting an unsecured hybrid loan of up to €400 million ($486 million). The final ruling on the possible financing arrangement will be decided in the government plenary session.

The Finnish government said the second wave of COVID-19 led the airline to a slower recovery than it had been expected. ”The hybrid loan would be an important facet in ensuring our financial stability if the recovery in air traffic is slower than expected,” Finnair’s CEO Topi Manner said. 

According to the statement, the funds would be accessible if the airline’s cash or equity position would drop below the airline’s limit. Finnair’s equity  was €940 million ($1.1 billion) and cash reserves were €725 million ($887 million) as of the end of the third quarter 2020.

The financing arrangement would need to be approved by the EU Commission. The hybrid loan would not add to additional costs on the state budget, as the €400 million is still available from a total of €700 million, that Finnnish government approved to allocate earlier in May 2020. 

The Finnish state holds a 55.9% stake in the airline. “The state is committed to acting as a responsible anchor owner for Finnair,” Tytti Tuppurainen, the minister in charge of state ownership policies added.