Crisis talks continue on Swissair

Swissair's fleet could once more be grounded unless financing talks succeed Keystone

The Swiss Finance Ministry says it has received "positive signs" of a solution to a financing crisis at subsidiaries of the collapsed Swissair Group.

However, it warned on Friday that there were still not sufficient guarantees of a solution for the government to release vital cash aid to the ailing former flag carrier.

Finance Ministry spokesman, Dieter Leutwyler, said the rump operations of Swissair would not be able to stay airborne for much longer without state aid.

“We have good grounds to be optimistic,” Leutwyler said, but added there were still no sufficient guarantees.

The court-appointed administrator to the Swissair Group said on Friday that negotiations were at an advanced stage and it would “probably be possible to present definite results in the near future”.

Swissair awaits money

The government on Tuesday warned local authorities and banks they had to find a solution to a looming cash crisis at three separate, airline related Swissair units.

The companies in the eye of the storm are information technology company Atraxis, ground-handling company Swissport and maintenance firm SR Technics.

The state, public authorities and Swiss firms agreed on October 22 to a SFr4.3 billion ($2.64 billion) national airline salvage plan under which regional carrier Crossair will gradually take over some two-thirds of Swissair’s services.

As part of the deal Swissair would continue flying to long-haul destinations until Crossair is ready to take over next April, with the government agreeing to pay SFr1 billion to enable Swissair to keep flying until then.

The state has said that it will not transfer the first tranche of SFr50 million to Swissair unless a solution is found for the airline-related subsidiaries.

Zurich confident

A series of negotiations with prospective buyers for the airline-related subsidiaries plus banking authorities and the administrator are being coordinated by the canton of Zurich.

Andreas Hugi, spokesman at the canton, said talks were progressing and a series of positive signals had been sent to the central government in the hope of convincing it to release funds to Swissair.

Gate Gourmet secure

The provisional administrator of the Swissair Group also announced that he had approved fresh credit for Swissair Group’s cash-strapped catering unit, Gate Gourmet.

“The liquidity problems at Gate Gourmet should be overcome by a credit of SFr30 million ($18.4 million) from [Swissair] to be granted on standard banking terms,” administrator Karl Wüthrich said in a statement.

He said the credit would be secured by pledging a 70 per cent stake in Turkish catering company, USAS Uçak Servisi.

Wüthrich added he was seeking to extend debt-restructuring procedures in other countries to prevent as far as possible any foreign debt enforcement, particularly the seizure of aircraft.

Cheaper tickets

Meanwhile Swissair and Crossair launched a new discount ticket scheme aimed at filling up planes and raising cash to cover costs. The move could provoke the ire of the European Commission.

The airlines are offering economy class tickets for more than 80 destinations at prices as low as SFr199 for Europe, SFr490 for the United States and Canada and SFr890 for Africa, Asia and South America.

European Transport Commissioner Loyola de Palacio has expressed concern about Swiss state cash aid to Swissair, saying this should not lead to market distortions.

swissinfo with agencies