Iceland Support for Icelandair May Involve Taking Stake, PM Says

(Bloomberg) --

Iceland may look at taking a stake in Icelandair Group hf if the government injects funds into the airline, Prime Minister Katrin Jakobsdottir told local radio.

“If there will be specific support, we need to weigh if it is natural that the state gets a share in it or if the state’s interest is better guarded with another solution,” Jakobsdottir said on Sunday.

The government said last month it was ready to discuss a possible loan or loan guarantees, contingent on the carrier’s financial restructuring. Icelandair has been working toward a stock offering to be completed by the end of May.

Aid for airlines has become a political hot potato after travel bans during the coronavirus pandemic. Governments have devoted more than $85 billion to propping up airlines globally, with loans for Air France-KLM and nationalization for Alitalia. Other carriers such as Ryanair Holdings Plc are challenging this as unfair.

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