The government says state aid for Swissair will only be forthcoming if the group's ailing subsidiaries are kept alive.

The government repeated on Wednesday that it would not go beyond paying SFr1 billion ($600 million) towards a SFr4.24 billion package put together last week by Bern and the Swiss business community to launch a new national airline.

The comments came in the wake of concerns that three Swissair subsidiaries urgently needed cash injections since the collapse of the national carrier had deprived them of much-needed revenues.

They include the SR Technics maintenance company, which services Swissair aircraft, the software producer Atraxis and the ground-handling unit Swissport.

Peter Siegenthaler, director of the Swiss finance ministry, said on Tuesday that the government expected private industry to help the subsidiaries stay afloat, and that it wanted a clear signal soon.

If SR Technics were to go under, it could force a second grounding of Swissair because the company is responsible for maintaining the airline fleet.

The fleet was forced to stay on the ground for 48 hours earlier this month when Swissair was unable to pay for kerosene and landing fees.

Winding down Swissair

The confederation's payment is aimed at keeping Swissair's fleet in the air until the end of March when a new airline built around the regional carrier, Crossair, would take over.

Siegenthaler said it was up to the cantons and banks to come up with a solution. He added that a special task force set up to oversee the winding down of Swissair was suggesting the subsidiaries be scaled down and sold.

The task force meeting was called following a warning at the weekend from the head of SR Technics, Hans Ulrich Beyeler, that Swissair planes could be grounded for a second time because of a lack of maintenance facilities.

Siegenthaler said SR Technics needed SFr40 million ($24.55 million) by the middle of next month, and similar amounts for December and January to keep afloat. He added that Atraxis needed between SFr35 and SFr50 million by the end of the month.

He outlined two possible sources of finance - a guarantee from the Zurich cantonal government, which would require approval by the cantonal parliament and possibly local voters - and the banks.

He said that in addition the company running Zurich Airport, Unique, could also step in to provide some money.

Crossair chairman cautious

Siegenthaler said a decision on the sale of Swissport could be made in the coming weeks because negotiations were well advanced.

The British investment firm, Candover, announced in August that it intended to become the majority shareholder of the company.

A second task force in the canton of Zurich, which includes banks, companies, the court-appointed administrator of Swissair, the airport and the canton, is now said to be working on the subsidiaries' problems.

"The sales [of these units] could take place in a few months. It is necessary to stabilise these companies financially so that the sales process can take place in an orderly way, administrator Karl Wüthrich told Swiss television.

In a related development, the chairman and founder of Crossair, Moritz Suter, has said that he will not put up a fight to remain in office.

"It all depends on whether the shareholders have confidence in me or not," he told the Geneva newspaper "Le Temps". He added that he wanted no position within the new airline's management.

Suter also said that it would be extremely difficult for Crossair to take over 26 medium-haul and 26 long-haul aircraft from Swissair, as envisaged under the rescue plans.

"This will be extremely difficult to achieve, because the economic situation in the air transport industry is in crisis. Under these circumstances, we have to be very cautious," he said.

swissinfo with agencies

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