The House of Representatives has approved a massive financial package to bail out Swissair and invest in a new national airline. The Senate will decide on the issue on Saturday.This content was published on November 16, 2001 - 23:28
A majority of 110 members of the House voted to support a government proposal for a credit package of just over SFr2 billion ($1.2 billion), while 56 members rejected it.
Opposition came mainly from the right-wing Swiss People's Party, as well as from members of smaller groups, including the Greens and the Liberal Party.
The funds include bridge loans of SFr1.45 billion for Swissair to continue a reduced flight schedule for the next few months, and a SFr600 million investment in a new national carrier due to be operational by April.
Under a deal reached between the government and the industry last month, the federal, cantonal and local authorities will take a 35 per cent stake in the new airline, based on the regional carrier, Crossair, while private industry will contribute SFr1.9 billion, with 65 per cent of shares.
Supporters of the credits said it was in the interest of Switzerland to have a national airline, which offers intercontinental flights. They said the country's business depended on direct air links out of Switzerland and an international hub.
Speakers from three of the country's four main political parties - Social Democrats, Radicals and Christian Democrats - pointed out that a rejection of the proposed credit would have serious consequences for Switzerland's export-oriented business and the tourism industry.
Many speakers also warned of massive job losses, if parliament refused to grant the credits. About 5,000 people at Swissair and its flight-related services lost their employment following the collapse of the national airline, while others are concerned about cuts in salaries and pensions.
During the late night debate opponents argued it was not up to the federal authorities to bail out a commercial company that had been ruined by bad management. They demanded that members of the Swissair board be made accountable.
In addition, opponents said the state should not play a role in a project which they consider too ambitious. The new airline with a capital of SFr2.7 billion is to absorb 26 intercontinental and 26 short-haul aircraft from Swissair, besides Crossair's 82 planes.
Several speakers dismissed the debate as "a complete farce". They said effectively parliament could only rubber stamp a legal document, committing the government to pay out the money pledged.
Risky but viable solution
The transport minister, Moritz Leuenberger, as well as the finance minister, Kaspar Villiger, called on parliament to put regional interests aside and support a national task.
They said failure to approve the credit package would cause tens of thousands of job losses, damaging the country's economy and its image. While admitting that the plan for a new airline included risks, the ministers pointed out it was the only viable solution.
The debt-ridden Swissair was founded in 1931 and it has been facing serious difficulties since last January with the crisis came to head at the beginning of last month. Its entire fleet remained grounded for two days, because the carrier and its flight-related services, which are based at Zurich airport, had run out of cash.
Many people in Switzerland take pride in the company as a national symbol and a Swiss trademark abroad. Amid a public outcry over the crisis, the government has taken a leading role in mediating a solution for the country's aviation industry.
by Urs Geiser
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