The Government of Norway has extended guarantees it has put in place on loans for the country's airlines, including Norwegian (DY, Oslo Gardermoen), Widerøe (WF, Bodø), and SAS Scandinavian Airlines (SK, Copenhagen Kastrup), by two months until the end of 2020, the Ministry of Trade and Industry said in a statement released on September 20.

The government has proposed changes to the aviation loan guarantee scheme, launched on March 19, to better adapt it to the airlines, the ministry said without disclosing the specifics of the changes. The scheme guarantees a minimum number of flights.

“The situation facing aviation today is more protracted and serious than expected when the scheme was originally adopted in March. The government will contribute to maintaining Norwegian aviation through a very financially demanding period,” pledged industry minister Iselin Nybø.

“The changes we now propose are designed so that the scheme helps more airlines than those who have already used it,” she added.

The change must be approved by the European Free Trade Association Surveillance Authority, which monitors Norway's compliance with the European Economic Area, before it can enter into force.

Of the NOK6 billion kroner (USD656 million) in the loan guarantee scheme for airlines with a Norwegian operating licence, NOK3 billion (USD328 million) was directed at Norwegian, NOK1.5 billion (USD164 million) at SAS, and NOK1.5 billion at Widerøe and other airlines. So far, Norwegian and charter carrier Airwing (NWG, Notodden) have used the scheme, the ministry said.

Norwegian secured its NOK3 billion earlier this year following debt restructuring but said last month that it needed to secure more funding if it is to survive the pandemic-induced crisis.

“It has been important since March for the government to ensure flight connections throughout the country. There are long distances in Norway and, for many, aircraft are considered necessary. By extending the minimum number of flights, we ensure that people get to hospitals and jobs where flying is the only option,” the transport minister, Knut Arild Hareide, told the Norwegian News Agency.

According to the news agency, the goal is for airlines to be able to operate routes on a commercial basis again. Five routes will be cut from coverage in the scheme, including those to airports in Oslo from Aalesund, Bodø, Harstad-Narvik, Kristiansand, and Tromsø.

But daily departures between Stokmarkness and Bodø increase from two to three, due to the need for patient travel between the western islands and hospitals in Bodø and Tromsø.

In related news, Widerøe has resolved that all maintenance on its aircraft will be performed in Norway, at its bases in Bergen, Bodø, and Oslo Torp, instead of elsewhere in Europe, the Norwegian broadcaster NRK reported on September 20. This means the company will hire 40 to 50 new employees.