Swiss government to aid ailing Swissair: Minister
Agence France-Presse, Bern
The Swiss government will provide up to 450 million Swiss francs (US$278.5 million) to get bankrupt airline Swissair back into the air, Finance Minister Kaspar Villiger said late Wednesday.
Villiger told journalists after a cabinet meeting that the money was only meant to ensure that Swissair flights, which were halted on Tuesday because the company could not advance cash for jet fuel, could continue from Thursday until the end of the month.
Villiger added that the cabinet, the Federal Council, agreed to provide public funds because Switzerland's image was at stake.
He also said that the decision had been taken in order to improve the chances that a successful airline would emerge from Swissair Group, most of which was placed in bankruptcy protection on Tuesday.
Under a rescue package for Swissair Group put together with two Swiss banks, UBS and Credit Suisse, on Monday, Swissair flights were meant to continue until Oct. 28 when two-thirds of the company's flight operations were due to be transferred to European regional airline Crossair.
The banks took over 70 percent of Crossair under the package, allowing the regional airline to carry on as the dominant partner.
Its flights have not been hit by Swissair's troubles over the past day.
The banks used 260 million Swiss francs to purchase the 70 percent of Crossair stock previously held by Swissair. Both banks also pledged to make a stand-by credit of 250 million Swiss francs on Monday.
UBS and Credit Suisse would also be increasing their participation in the Swissair employee pension fund by 100 million Swiss francs, the government statement said.
The additional funds were meant to defuse a row between the two banks and the government which has been simmering since Swissair was forced to ground its flights when the banks failed to provide cash for jet fuel.
Tens of thousands of Swissair passengers have been stranded around the world by the crisis, including 4,000 at Zurich airport.