Chinese Communist Party-Linked Corporation Buys Major Share in Norwegian Airline
Norway’s airline Norwegian Air has calmed fears of bankruptcy with new major investments, including one from a corporation linked to the Chinese Communist Party (CCP).
Chinese company BOC Aviation bought a 12.7 per cent stake in Norwegian Airlines after converting its bond loans into 390 million shares of the company.
“This could be very important. China is a special owner, the Chinese state is special and drives Chinese interests very strongly,” economic journalist Kristina Lagerström told Swedish broadcaster SVT on Wednesday.
“This entire settlement that Norwegian made when trying to save the company from bankruptcy was based on the fact that those who lease the aircraft take over the company; that is the consequence of this,” she added.
Other firms have also bought significant stakes in the airline including Irish aircraft leasing company Aercap which bought 15.9 per cent of the company.
On Tuesday it was also announced that the airline would be receiving a loan guarantee of three billion kroner (£237 million/$290 million) from the Norwegian government with CEO Jacob Schram stating that “virtually all of the revenue stream has stopped”.
“Our goal has not only been for Norwegian to survive, but for us to come back stronger with a sustainable operation and a structure that will benefit shareholders, customers and colleagues alike,” he added.
Norwegian, like many other airlines, has faced extreme financial difficulty due to travel bans enacted by many countries to stop the spread of the Wuhan coronavirus.
Scandinavian airline SAS has also received a bailout from the Swedish state after the government allotted nearly half a billion euros in loans for airlines operating in Sweden’s airspace last month.
In mid-March, before the height of the coronavirus outbreak in Europe, Joakim Bornold, analyst and economist at Söderberg & Partners, warned that SAS would face an existential crisis as a result of the pandemic.
Air France has also looked towards a government bailout but has been told by the Macron government that it would have to cancel all domestic flights and engage in other moves to make the airline “green”.
Photo: AAS, ERLEND/AFP/Getty Images
