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Politicians favour government stake in new Crossair

Three federal political parties want the state to participate in a new national airline swissinfo.ch

Three of Switzerland's four main political parties have called for the Confederation to become a minority shareholder of the expanded Crossair. The regional carrier is due to take over from ailing Swissair as the country's flagship airline.

This content was published on October 12, 2001 - 22:08

After meeting on Friday, representatives of the Radicals, Christian Democrats and Social Democrats declared Switzerland needs a national carrier guaranteeing intercontinental flights. "If no company is prepared to take over from Swissair, the country will suffer a severe economic crisis," said Christiane Brunner, president of the Social Democratic Party.

The three parties believe the Confederation should be a minority shareholder, but financing should come first from the banks, and the rest of the economy as well the cantons with airports. The new company would also have to propose enough flights to ensure Zurich airport remains a hub.

The Radicals, Christian Democrats and Social Democrats want flights maintained until the transition phase between Swissair and the new Crossair is over. The changeover is supposed to be complete by October 28.

The three parties did not discuss the cost of the new carrier, or how large a stake the Swiss government should commit itself to.

The Swiss People's Party, which also took part in the meeting, has declared itself against any governmental participation. Christoph Blocher's party says there are plenty of flights with other companies available.

"It is unacceptable the authorities should attempt to save a private company," also said Ueli Maurer, the People's Party president.

The four parties will meet again on Tuesday to discuss the details, including how much should be invested.

"If we want an airline, we have to be prepared to pay the price," said Brunner. "But we don't want the state to participate in the new company if it is only going to last a few months."

Receiver vetoes loan

A court-appointed administrator overseeing the winding up of Swissair Group says he cannot approve a SFr250 million ($152.3 million) bridging loan for the company's airline-related businesses. The decision casts doubt on whether Swissair can continue flying until the end of the month.

The loan, agreed on October 1, was designed to allow Swissair to keep flying until the end of the month, when the regional subsidiary, Crossair, is due to take over many of the airline's aircraft and routes.

But without the support of key airline-related units, Swissair may not be able to remain airborne.

The administrator, Karl Wüthrich, said that even taking the widest interpretation of the discretion allowed to him, he was unable to approve the loan because it might be detrimental to the interests of creditors, including employees' pension funds.

An airline analyst, Sepp Moser, told swissinfo that the loan was rejected because it would give the banks which stumped up the money first claim to any assets, in the event that Swissair Group was declared bankrupt.

"He rejected the proposal because the agreement said that in return for providing the SFr250 million credit, the banks would get hold of the shares of three major Swissair Group companies.

"This would mean that, in the case of Swissair Group going bankrupt - which is still possible - the banks would be privileged because these shares would no longer be able to be distributed among the other creditors [including employees and pension funds]."

The banks - UBS and Credit Suisse - are now examining the possibility of making direct loans to the individual airline-related companies. Wüthrich said he would try to ensure that the companies had enough liquidity to remain operational.

Sepp Moser said that decision would " deepen the businesses' liquidity problems, but I don't think this will have any immediate repercussions".

swissinfo with agencies

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