Christ Yoder
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The German government authorized a state guaranteed loan of 1.5 billion Swiss francs (US $ 1.66 billion) to Swiss (LX, Zurich) and its subsidiary Edelweiss Air (WK, Zurich), the Lufthansaconfirmed in a statement on Aug. 17.
The Economic Stabilization Fund (Wirtschaftsstablisierungsfonds – WSF) of the German Ministry of Economy and Energy approved the loan facility, 85% of which is guaranteed by the Swiss state. Approval was needed for a larger aid plan for the Lufthansa airline group.
The decision means that state aid in Austria, Belgium and Germany can also be released for Austrian airlines, Brussels Airlines and to Lufthansa itself.
Swiss tentatively secured the bailout in April but had yet to see any funds, as the disbursement was conditional on Lufthansa entering into its own bailout deal with the German state. As this had not yet happened at the beginning of August, Lufthansa helped Swiss with an emergency bridging loan of more than 200 million Swiss francs (221 million US dollars).
Local media reported that there had been criticism in Switzerland over using public funds to bail it out as it is a German-owned company.
“This support will allow Swiss and Edelweiss to overcome the current crisis, caused by factors beyond the control of our industry, and to continue to gradually resume our flight operations as we have been doing since June 15,” said Thomas Klühr, the general manager flag of the carrier.
Swiss posted a loss of CHF 266.4 million ($ 295 million) in the first half of this year, as passenger numbers fell 64% year-on-year and revenue fell 55%.
Austrian Airlines CEO Alexis von Hoensbroech said on Twitter on August 17 that the WSF had just “given the green light to the state aid plan”, adding: “The relief is great because it is is the final hurdle. We are very grateful to have been helped in this historically unprecedented crisis and pandemic. “
