Zurich’s vote gets new carrier into starting blocks

Crossair says the result is a huge vote of confidence Keystone

Sunday's decision by voters in canton Zurich to back a SFr300 million investment in a new national airline built around the former Swissair subsidiary, Crossair, has been widely welcomed.

The investment was backed by 55.5 per cent of Zurich’s voters – a move which analysts say will safeguard around a thousand jobs in the area. The new airline, yet to be named, will replace the collapsed Swissair.

Crossair’s management said the decision was a huge vote of confidence.

“This approval meets a further condition for fully implementing our plans to develop a new national airline with an additional 26 short-haul and 26 long-haul aircraft,” said Crossair CEO, André Dosé.

Phoenix plan

Crossair had made the whole future of the so-called “Phoenix plan” contingent on Zurich’s voters backing the investment. The plan will see the new company take over 26 short-haul and 26 long-haul Swissair routes from April.

Zurich’s SFr300 million injection is a relatively small addition to the SFr2.4 billion already raised from the government, banks and private business but had Zurich’s voters shunned the deal, Crossair said several of the long-haul routes would have been cancelled, leading to further job cuts. Several other cantons had also said they would only take part in the new company if Zurich was on board.

Swiss press reacts

The Swiss press also praised Zurich’s decision on Monday.

The German-speaking “Tages Anzeiger” said all parties involved would be relieved by the outcome of the vote, including the government and Switzerland’s two biggest banks, UBS and Credit Suisse, which are financing the new airline.

The “Blick” declared that the “way had been cleared” for the new airline, which would be a boost for Zurich – the location of the country’s main airline hub. It reminded readers that a name still had to be found for the carrier – a decision is expected this week.

The French-speaking press also focused on the feeling of relief with headlines such as “Zurich breathes life into Crossair” in “le Temps” and “A yes for Crossair in Zurich: Hope for Geneva” leading the front page of the “Tribune de Genève”.

Analysts react

But many analysts still question the long-term prospects of the new airline.

“The vote will save jobs in the short term, but not in the long term,” aviation analyst, Sepp Moser, told swissinfo.

Moser, who doubts the project will succeed, said the investment will only serve to alleviate Crossair’s planned deficit.

“The SFr300 million will be spent on the deficit that the company is expected to make,” he said. “The budget for the first year foresees approximately a SFr1 billion loss.”

However, the “Phoenix” plan is stronger following the Zurich vote, Moser said.

“The plan would have gone ahead even if Zurich had rejected the investment,” he said. “But the project is of course more stable than it would have been otherwise.”

Zurich is the third canton after Basel City and Basel Country to agree to a fresh cash injection into the future airline.

Markets react

In early trading on Monday, the markets reacted positively to the weekend vote.

Crossair stock opened higher at SFr56.2 ($33.9) per share, up by more than five per cent on Friday’s closing price of SFr53.5 ($32.3).

Likewise Zurich airport’s stock saw a slight increase in its value to SFr 100.75 ($60.9), a rise of just under 0.3 per cent.

However, it was bad news for the now defunct SAirGroup, who will see its shares finally withdrawn from the stock market at the end of the month.

Possible alliance

Meanwhile, Crossair has also reportedly been negotiating a possible alliance with the German carrier, Lufthansa.

Crossair has held several meetings with Lufthansa and more are scheduled, according to a report by the Sunday newspaper, “SonntagsZeitung.” It said that Crossair boss, André Dosé, had already met his Lufthansa counterpart, Jürgen Weber.

The airline hopes to find a business partner before April 1, when the new summer flight plan comes into effect.

Oneworld, which includes American Airlines and British Airways, is also a potential candidate according to another Sunday newspaper, “dimanche.ch”. Star Alliance and Skyteam, which include respectively Lufthansa and Air France, are reportedly also potential business partners.

by Michael Hollingdale and Sally Mules