Swiss International Air Lines hopes to receive state aid over coronavirus

SWISS has taken half its fleet out of service and reduced working hours for flight personnel to help safeguard its finances during the coronavirus outbreak. © Keystone / Gaetan Bally

The boss of Swiss International Air Lines (SWISS) says he hopes the Swiss state will step in to help it deal with the impact of the novel coronavirus. 

“I count on the fact that the Federal Council is aware of the importance of SWISS,” Chief Executive Officer Thomas Klühr told the Sonntagsblick newspaper on March 15.

Major US and European airlines have begun talks with governments on obtaining financial aid to weather a crippling travel slump brought on by the coronavirus, which has hobbled global travel and is threatening thousands of industry jobs.

The Lufthansa subsidiary has taken half its fleet out of service and reduced working hours for flight personnel to help safeguard its finances during the coronavirus outbreak.

According to Klühr, no airline could survive the coronavirus without state aid. If the situation worsens, SWISS would have to ground all of its planes and would thus be dependent on state aid, he went on. 

But the CEO said he was confident that the airline would survive this crisis.

“I am sure that we can hold out longer than other airlines,” he declared. But that will depend on help from the federal authorities, he said, without giving any figures. 

The Swiss federal authorities are aware of the extent of the problems facing the airline. Economics Minister declared on Sunday that the State Secretariat for the Economy (SECO) had been in close contact with the airline and the Zurich cantonal authorities to offer its support to the company and its staff. 

“If other measures are necessary, we will examine the question with SWISS,” said Parmelin.

Talks between SWISS and the Swiss government are due to take place next week.                     

Fall in demand 

On Friday, the Lufthansa subsidiary said that to compensate for the sharp fall in demand and resultant lost revenue, the airline had decided to take immediate further precautionary action to secure liquidity.

Payout of variable salary components would be postponed to the end of this year for both flying personnel and senior management, the airline said, adding all recruitment besides apprentices and interns would also be halted and all non-essential projects halted or postponed. 

SWISS said it was in contact with authorities and would initially apply for short-time working hours for cockpit and cabin staff, and was also considering such measures for workers on the ground.

SWISS has reduced or cancelled flights to and from areas with a particular risk of infection, including Beijing and Shanghai (China), as well as to and from Tel Aviv (Israel), Cairo (Egypt), Bordeaux (France), Stuttgart and Nuremberg (Germany).

SWISS has also suspended flights to and from all destinations in neighbouring Italy until the beginning of April. It has also reduced flights to the United States to just Chicago and Newark following a US ban on Schengen zone travellers. 

On October 2, 2001, the national carrier Swissair collapsed under a mountain of debts, sparking national anger and soul searching. Its successor SWISS was rescued by Germany’s Lufthansa group in 2005. The Swiss government is the single biggest shareholder in the airline with a 20.4% stake.