Swissair bailout pushes federal budget into the red

Swissair drags government into the red Keystone

The government's planned budget surplus has been wiped out by its SFr1.23 billion ($740 million) cash injection for Swissair.

The Finance Ministry said in a statement on Thursday that the costs of keeping Swissair afloat, and aid for its successor airline, based around Crossair, made a shortfall inevitable.

It said overall spending would exceed the SFr48.9 billion budgeted for 2001, while tax revenues were expected to be lower than the planned SFr44.5 billion. However, the ministry said extraordinary income would improve the picture.

The government is paying SFr1.05 billion in a bridging loan to keep Swissair in the air until next spring, and it is injecting SFr180 million this year into a new airline to be built around Crossair.

Some cantons and top Swiss companies are also contributing to the SFr4.24 billion plan, unveiled on Monday, to create a fully-fledged new national airline servicing local, regional and intercontinental destinations.

The ministry statement made no reference to the 9,000 jobs Swissair is in the process of cutting. Those redundancies are expected to cost in the region of SFr750 million.

The ministry said federal income had been hit by lower stamp duties on stock market trades and insurance policies since June, reflecting the cautious attitude towards equity-linked insurance policies and generally depressed financial markets.

Revenues from road tolls were expected to rise, but a number of taxes, including import duties, the mineral oil tax and the tobacco levy were likely to fall, the statement said.

As for one-off income, the federal government expected to receive about SFr400 million in the form of a capital repayment by majority owned telecommunications operator Swisscom and SFr203 million from the sale of third-generation mobile phone (UMTS) licences.

A further burden on the 2001 budget comes from a SFr929 million credit, mainly for the Expo.02 national exhibition, which the government was to fork out earlier this year to keep the project on track.

swissinfo with agencies