Corti accuses banks of conspiring to sink Swissair

Mario Corti accuses Switzerland's two top banks of conspiracy Keystone

Swissair Group boss, Mario Corti, has accused Switzerland's two top banks - UBS and Credit Suisse - of plotting against him in a bid to limit their exposure to Swissair. In a newspaper interview he said the banks cut off a vital cash supply earlier than expected.

This content was published on October 5, 2001 - 12:00

In an interview with the Neue Zürcher Zeitung (NZZ) on Friday, Corti said UBS had promised to keep Swissair's cash pool facility open until the end of October, but axed the airline's funds a week ago.

At the same time, the two banks put forward a partial "rescue" plan for the ailing airline, under which they are to buy Swissair Group's 70 per cent stake in the company's regional subsidiary, Crossair. The bulk of Swissair's routes will also be taken over by Crossair from October 28.

"I felt deceived at the end of last week," Corti said in the interview. "The makers of the Phoenix project just told me what to do."

The Phoenix project was a joint plan by Credit Suisse and UBS, which only permitted Swissair to use the proceeds from the Crossair sale - some SFr260 million - until October 3.

"I refused this solution vehemently as I did not think we could ground our whole fleet of 75 aircraft on October 4," Corti said.

He told the newspaper that the banks sent Swissair a fax on Tuesday evening - the day the fleet was grounded - giving the airline permission to continue its services until October 5. Corti said "it was already too late".

Surge in cash demand

Corti also dismissed a statement by UBS chairman, Marcel Ospel, saying that Corti still had enough money to keep the airline going on Tuesday. "I cannot understand why Corti grounded the fleet when he did," Ospel said in an interview with the magazine "Cash".

The Swissair Group chairman defended his decision, saying: "Our demand for cash surged in no time. All of a sudden we did not have enough money in our account."

Corti grounded the Swissair fleet on Tuesday after fuel suppliers refused to deliver to Zurich airport, and two planes were impounded at London's Healthrow airport for non-payment of landing fees.

Corti also accused the banks of procrastinating over the Crossair deal. "The banks repeatedly came up with legal suggestions, which were to our disadvantage", he told the NZZ.

He added that a bridging loan of SFr250 million agreed by the banks has not yet been finalised. "At the moment we are not allowed to use the money for the continuation of our services," he added.

Cash injection

Swissair would still be grounded had the government not intervened on Wednesday night with an emergency credit of SFr450 million. By Friday, the airline was expected to have half of its fleet back in the air. Around a third of flights resumed on Thursday.

Justifying the government's decision to bail out Swissair, the finance ministry told swissinfo that crisis was "a national problem, a problem of credibility for our country".

The government stressed that the decision was a temporary solution to the airline's cash crisis, which left 38,000 passengers stranded around the world on Wednesday.

On Thursday in Bern, some 7,000 demonstrators protested against the debacle, accusing Credit Suisse and UBS of unfair dealings with the national airline. Some protestors said the banks displayed "incredible arrogance".

Organisers said the protest, staged outside the main branch of UBS, was to show solidarity for Swissair and its employees. As the demonstration intensified outside their building, UBS employees locked the main entrance to prevent protesters from entering.

Meanwhile, Credit Suisse has blocked credit cards issued to Swissair employees. According to Swissair spokesman, Erwin Schärer, pilots have been given cash to pay for fuel and aircraft loading fees.

swissinfo with agencies

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