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Swissair shares continue to fall amid uncertainty

Swissair is fighting for survival

(Keystone)

Shares in the Swissair Group continued to decline on Friday amid growing doubts about the company's future. The share price was down just over two per cent and the shares closed at SFr41.05 ($25.36).

The company's share price has fallen 85 per cent since its high of SFr282.5 last December.

On Tuesday, the company's chairman and chief executive warned that the Group might have to file for bankruptcy because of the "millstone" of debt accumulated by former management. Debt has risen to SFr16-17 billion, up from SFr15 billion at the end of June.

Analysts say much of Swissair's current predicament can be placed at the door of its failed expansion policy when it bought stakes in financially weak foreign airlines in a bid to lead its own international alliance. Corti, who took up his post in March, has been struggling to change direction.

The company, the banks and the government are now considering ways to recapitalise the company, which is said to need around SFr2 to SFr3 billion to keep going. The recapitalisation plan is expected to be in place by October 10 and to be put to an extraordinary shareholders meeting in November.

Swissair Group announced on Monday that it would slash its long-haul network by a quarter and merge the operations of its main Swissair division with that of the lower-cost regional carrier, Crossair. It announced 3,000 job losses at its catering division to take effect immediately and said thousands more jobs were likely to go as a result of the restructuring programme.

A drastic drop in air travel since the suicide attacks in the United States has exacerbated the company's position and plunged it into a fight for survival.

swissinfo with agencies


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