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Germany gives green light to Swiss airline bailout

SWISS aircraft on the ground
The pandemic forced many airlines to keep aircraft on the ground. Keystone / Salvatore Di Nolfi

Swiss International Air Lines (SWISS), owned by the German Lufthansa group, has been cleared to receive a CHF1.5 billion ($1.65 billion) state-backed loan. The bail-out was approved by the German authorities on Monday.

While the loan will be 85% guaranteed by the Swiss state, German approval was first needed for a wider Lufthansa group aid package.   

The funds will also be used to bail out the Zurich-based charter airline Edelweiss, which was taken over by SWISS in 2008 and is also part of the Lufthansa group.

“We are very grateful that the financial support which we have been assured of by the Swiss Confederation will now be provided in the form of these loans,” said SWISS CEO Thomas Klühr. “This support will enable SWISS and Edelweiss to weather the present crisis, which has been caused by factors beyond our industry’s control, and to continue to gradually resume our flight operations as we have been doing since June 15.”

SWISS reported a CHF266.4 million loss in the first half of this year as a result of the coronavirus pandemic. Passenger numbers fell by 64% in the period as turnover dropped by 55%.

The use of Swiss state funds to bail out the airlines has been criticised in some quarters because they are German-owned companies.

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