Canton Zurich backs crucial Crossair credit plan

A negative vote in the canton of Zurich could have endangered thousands of jobs swissinfo.ch

Voters in Canton Zurich have voted in favour of a SFr300 million ($181 million) investment in a new company, which will replace the collapsed national flag carrier, Swissair.

In a key ballot on Sunday, 55.5 per cent of voters in the canton of Zurich agreed to back the investment – a move which analysts say will safeguard thousands of jobs.

“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. Under the plan, the regional airline, Crossair is to expand its operations to take over 52 of Swissair’s aircraft, 26 short-haul and 26 long-haul routes.

“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.

Basel-based Crossair has already raised around SFr2.4 billion for the plan from the government, banks and private business, with only the cantons left to decide whether to participate.

Crucial Zurich vote

Zurich’s vote was crucial not only because it will provide the lion’s share of the cantons’ SFr400 million investment, but also because Crossair had made it clear that the Phoenix plan would not go ahead without Zurich’s support.

Other cantons such as Lucerne, Glarus, Schaffhausen and Obwalden had also announced that they would only support the project if Zurich was on board.

A “no” vote on Sunday would have killed the rescue plan in its current form and led to the formation of a much smaller company. Analysts also predicted that a further 1,000 job cuts in the Zurich area were likely to have been lost, on top of the thousands already axed.

The canton of Zurich also accepted, by more than 67 per cent, a SFr100 million guarantee for Kloten airport, which experienced financial difficulties after the collapse of Swissair.

“This is certainly a very positive decision,” said Moser. “Contrary to the new airline, Zurich airport is part of the national transport infrastructure, so it is in the public’s interest to keep it going.”

A new name

A crucial decision regarding Crossair’s new name is expected to be taken this week during a board meeting on Monday to discuss the issue. Several suggestions have been put forward from “Air Switzerland” to Swiss Airlines” to more abstract ideas such as “Mountain Air”.

The Crossair board has consulted several advertising agencies about the carrier’s new identity. Most analysts expect the name to include some reference to Switzerland.

The board will also discuss the result from Sunday’s vote in the canton of Zurich.

Crossair and Lufthansa

Crossair has also reportedly been negotiating a possible merger 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, the newspaper said.

Oneworld, which includes British Airways and American Airlines, 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.

Crossair’s parent company, Swissair, was placed into receivership in October last year, after it embarked on a disastrous expansion policy by buying up stakes in smaller loss-making airlines in an attempt to build an international alliance.

swissinfo with agencies