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Enterprise minister says no to airline bailout

Enterprise minister says no to airline bailout

Published: 20 Apr 2010 07:49 GMT+02:00
Updated: 20 Apr 2010 07:49 GMT+02:00

Embattled airlines can not count on financial support from the Swedish state to compensate for the flight chaos of the past week, enterprise minister Maud Olofsson has said.

"We want to avoid state support, we want to resist," Olofsson told the Västerbottens-Kuriren daily after taking the first plane from Umeå to Stockholm-Arlanda Airport on Monday.

Olofsson later told news agency TT however that she could amend her position on state support on the condition that such provision was made in cooperation with other European partners.

The closure of a large part of European airspace has meant substantial losses for Scandinavian airline SAS and other carriers. But despite the losses the government intends to take as tough a line as it did with the automotive industry and decline to stump up financial support.

"The risk when states go in with their own support is that it creates unhealthy competition. This can be tough on small states such as Sweden," Maud Olofsson said, adding that the issue should be addressed at EU level.

"I do not want a state support race. The car industry crisis taught us that we have to work together," she told news agency TT.

The airspace shutdown meant that Olofsson was forced to take a car for the 700 kilometre journey home to Robertsfors on Friday. After the opening of Swedish airspace north of Stockholm on Monday, she was able to return to the capital by plane as scheduled.

The Local reported in February that the Swedish, Norwegian and Danish governments had agreed to back a new €510 million ($690 million) rights issue to bolster the firm's ailing finances after persistent losses.

The Swedish government has also declared its intention to reduce its stake in SAS from a current 21.4 percent. Denmark and Norway own 14.3 percent each.

TT/Peter Vinthagen Simpson (news@thelocal.se)

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Your comments about this article

09:01 April 20, 2010 by hpunlimited
Good news, a free market economy should be just that! We should leave Socialist/Communist and Nazi idiology to history and never let it return to this world again. The Swedish government should sell out all its shares to the market and let it be a 100% privately owned company. Politicians are not good leaders of private enterprises.
09:14 April 20, 2010 by americanska
I agree with that decision. But then europe needs to adjust the law that puts the burden on airlines to feed and pay for hotels for everyone stranded by this.

It only makes sense for airlines to carry that burden in some cases.
09:32 April 20, 2010 by Twiceshy
SAS has gotten enough bailouts. Just let them go bankrupt and let Norwegian and other carriers take over.
10:03 April 20, 2010 by mbe
it is not the airlines fault... i think they are being hit hard enough on this. it is not their responsibility to assure that the people are taken care of... This is a mother nature thing.. as for the government.. well better off leaving them out of this. the less control they have the better the people are!!

if sas goes under that is business.... there will be another company that will come in and gladly take over the sas´s clients...
11:21 April 20, 2010 by aaww
sell Scandinavian airlines for 1 Euro and make somebody talented in airline business take care of it.

Nordic government especially 3 nordic government together can drag the airline to no where.
16:41 April 20, 2010 by sissygirl
I think it's good that the Swedish govt will not bailout the airlines. I didn't agree with the US govt bailing out the auto industry either, except that too many people would be out of work otherwise. It's one of those sticky situations. I hope everyone gets home safely and soon:).
07:01 April 21, 2010 by susco123
Zhe point the enterprise minister Maud Olofsson makes is a fair one for now a wait and see where the market place takes the airlines. With the rising cost of petrol and the loss of 200 US million dollars revenue a day, the smaller airlines will fail and the bigger airlines will have to raise their prices by mid-summer, passing their cost on to the consumer. We wait and see where the world economically will be in August. This is a world economic problem not one country or just a European problem, each of our countries have become interdependent on each other financial. We as nations have to grow up work together and become more proactive instead of reactive. Thanks for reading.
08:54 April 21, 2010 by calebian22
Uunbeliever,

You use Wikipedia as reference support? Wikipedia can be edited by anyone. This is why most schools, in America anyway, block wikipedia on their servers, or don't allow wikipedia references in papers from students.

FYI: God bless the US was written by me here in this thread. From your posts it is obvious that you think all Americans are the same, but I am not a lawmaker, so I can say God bless the US as much as I want. Maybe I should say, God bless Sweden too, so that you really get rankled.
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