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Airlines

UPDATE 2-Finnish government to back Finnair's 600 mln euro loan

(Adds shares)

* Shares jump 16%

* Finnish state owns 56% of Finnair

TALLINN, March 20 (Reuters) - Finland will guarantee Finnair’s 600 million euro ($645 million) pension premium loan to aid the flag carrier as it contends with the coronavirus crisis that has hammered the aviation sector, the government said on Friday.

The news sent Finnair shares 16% higher in morning trade.

Finland owns 56% of shares in Finnair, which this week issued its second profit warning in three weeks, saying it would report a substantial comparable operating loss for 2020 because it is cutting about 90% of its normal capacity from the start of April.

“With the state guarantee, Finnair aims to further solidify its cash position and business continuity even if the coronavirus situation prevails longer than currently anticipated,” Finnair said in a separate statement.

The government’s decision on the guarantee also requires the approval of the Finnish Parliament. ($1 = 0.9300 euros) (Reporting by Tarmo Virki Editing by David Goodman )

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