Bankruptcies continue to decline

The number of business failures in Sweden declined in February by 21 percent, continuing the positive trend of the last few months, a new report shows.

All three of Sweden’s big city regions showed a decline in bankruptcies, with retail and services rebounding strongly.

478 firms went to the wall during the month, a decline of 21 percent on February 2009, according to statistics from UC, Sweden’s largest business and credit information agency.

For the year to date, 962 firms have filed for bankruptcy, a decline of 18 percent on the corresponding period of last year.

“The beginning of the year has been positive for most Swedish firms,” UC’s marketing head Roland Sigbladh said in a company statement on Monday.

The retail sector is showing signs of continued strength, with services and manufacturing declaring greater faith in the future.

Bankruptcies have declined by a third among retail firms and those operating within law, financials, science and technology over the past year.

The construction industry is lagging behind the upswing, according to the UC report while the property sector has been affected by weaker demand. Several export firms have been hit by the recent strengthening in the Swedish krona.

Despite the positive outlook in the first months of 2010 UC writes that the coming spring and summer periods are laced with uncertainty, with some 5,000 companies owing outstanding taxes for 2009.

UC also warned of the effects on private consumption that interest rate rises may bring although any overhanging factors affecting macro economic development are largely outside of Sweden’s control, the company concludes.

“Insecurity over a new recession concerns mostly the impact of international factors, as the situation in the Swedish economy is stable,” Roland Sigbladh at UC said.

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Norwegian’s subsidiaries in Denmark and Sweden go bankrupt

The struggling low-cost airline Norwegian has reported its staffing subsidiaries in Denmark and Sweden have filed for bankruptcy, meaning roughly three quarters of its pilots and crew will lose their jobs.

Norwegian's subsidiaries in Denmark and Sweden go bankrupt
A Norwegian Air Shuttle plane: Photo: Norwegian

In a press release issued on Monday afternoon, the airline said that the financial support packages offered by the Swedish and Danish government had not been sufficiently generous to keep the subsidiaries which employ pilots and cabin crew in the two countries solvent. 

”The impact the Coronavirus has had on the airline industry is unprecedented. We have done everything we can to avoid making this last-resort decision and we have asked for access to government support in both Sweden and Denmark”, said Norwegian's chief executive Jacob Schram in the statement.  

“Our pilots and cabin crew are the core of our business and they have done a fantastic job for many years.”

“It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues,”  Norwegian's chief executive Jacob Schram said in the statement.  

“We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible.”

The company said it was also immediately ending staffing deals with the OSM Aviation, which supplies it with crew based in Spain, UK, Finland, Sweden and the US.

The company said that 1,571 pilots and 3,134 cabin crew would be affected by the move, with only the 700 pilots and 1,300 cabin crew based in Norway, France and Italy being kept on.

In the release, the company blamed the “the lack of significant financial support” from the Swedish and Danish governments, which it contrasted with that of Norway, which has agreed to pay “all salary related costs” while staff are furloughed. 

The companies declared bankrupt include: 
Norwegian Pilot Services Sweden AB
Norwegian Pilot Services Denmark ApS
Norwegian Cabin Services Denmark ApS
Norwegian Air Resources Denmark LH ApS