Swissair scratches for funds

News on bridge loan still awaited at the Swissair Group Keystone

Another financial crisis could be looming for Swissair as the once-proud flag carrier scratches for funds to keep its airlines and flight-related operations running. The Swisair Group is still waiting to receive a bridge loan from banks which would keep things ticking over.

Switzerland’s biggest banks, UBS and Credit Suisse Group, had pledged a SFr250 million ($154.1 million) bridge loan as part of a SFr1.36 billion rescue package they unveiled last Monday.

Swissair was granted court protection from creditors on Friday. Complicating matters, the bridge loan was to be secured by assets now under the administration of the court-appointed judge, and may be subject to claims by other creditors.

“We definitely will need additional money to put into these flight-related businesses, but the judge has to decide whether this (loan) is the thing he wants to do, or if there should be another way of financing these related companies,” Swissair spokesman Rainer Meier said.

Zurich bankruptcy judge Felix Ziltener said on Monday that it could take quite some time before he took a decision.

Banks had agreed to put up money mainly to breath life into a new, as yet unnamed Swiss airline, grafting some of ailing Swissair’s operations onto smaller, comparatively healthy regional carrier Crossair.

The bridge loan was intended to support Swissair’s non-flight business until October 28 when it is to cease operations as an independent carrier and transfer some of its business to the new company.

Meier declined to say whether the group’s flight support operations would run normally on Monday if the loan stalls.

“Everybody is concerned about everything that is going on…I tell you they are working and…they do their very best to continue working. That is the only answer I can give you,” the Swissair spokesman said.

swissinfo with agencies