Icelandair to Bolster Finances to Survive Virus-Hit Months

(Bloomberg) --

Icelandair Group HF is exploring ways to shore up its finances to protect the carrier against a revenue slump as the coronavirus hammers air travel.

While the carrier’s liquidity is currently above a $200 million minimum level, reduced sales from a scaled back schedule in April and May will leave it vulnerable to breaching the requirement, Icelandair said in a statement on Monday. Kvika Banki, Islandsbanki and Landsbankinn are advising the carrier on available options.

“This will ensure that Icelandair Group will get through these difficult times as smoothly as possible and minimize disruption to the Icelandic tourism industry and economy,” the carrier said. “The company will also work closely with the Icelandic government in the upcoming process.”

Airlines Seen Burning $61 Billion in Roughest Stretch of Crisis

Icelandair earlier struck an agreement with the state to help cover the cost of flying some routes, broadcaster RUV reported last week. As the “main artery to foreign markets,” the carrier is arguably Iceland’s most important company, so can’t be wiped out, Finance Minister Bjarni Benediktsson said in an interview with the state broadcaster on March 23.

Iceland’s flagship airline is operating less than 10% of its normal schedule for this time of year. The aviation industry is among the hardest hit by the coronavirus pandemic, leaving carriers from Emirates to Deutsche Lufthansa AG examining finances and exploring ways to obtain state support.

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