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Monday, 8 October, 2001, 11:21 GMT 12:21 UK
Banks blamed for Swissair failure
An anti-UBS demonstrator
The Swissair failure has been a blow to national pride
Credit Suisse and UBS, the two Swiss banks behind the partial rescue of Swissair, have become targets of increasing criticism over their role in the deal.


I offer my apologies to all concerned... we were all under pressure

Marcel Ospel, UBS

On 30 September, the banks offered a 1.35bn Swiss franc (568m; $843m) bail-out package, agreeing to buy Swissair's 70% in regional subsidiary Crossair, in order to allow the group to carry on as a going concern.

But the banks were slow to hand over the cash, leading to a series of embarrassing incidents, including the impounding of Swissair planes, the halting of fuel supplies, and the stranding of tens of thousands of passengers.

Now, although Swissair's services have restarted, staff, shareholders and the Swiss press are mounting a bitter campaign against the terms of the deal.

Protest problems

The weekend was marked by street protests around Switzerland, targeting branches of UBS and Credit Suisse.

A Swissair demonstration
The banks have been startled at the depth of feeling

The Swiss press has urged customers to withdraw their business from the banks - according to the FT Deutschland newspaper, some 10,000 accounts have already been closed at UBS alone.

The British Sunday Telegraph newspaper reported that some 60 banks - including Deutsche Bank, Commerzbank and Citibank - are preparing legal action against UBS and Credit Suisse.

The 60 banks are lent some 3.8bn to Swissair, and are hoping to get at least some of the money back from Crossair's new owners.

Depth of feeling

Observers believe UBS and Credit Suisse have been taken aback by the vehemence of the protests.

An anti-bank protestor
Protester's placard: "Swissair must not die"

During the first week after the rescue package, they refused to admit mistakes in the handling of Swissair.

But speaking on Swiss television on Friday, UBS president Marcel Ospel said he was postponing a trip to New York to concentrate on the Swissair problem.

"I offer my apologies to all concerned," he said.

Mr Ospel admitted that he was aware in advance of the likely impact of delaying the handover of cash.

"But to my eyes it was clear that we could not cover all the costs of keeping all the flights in the air," he said.

He apologised for not sharing information openly enough with the public, but added: "We were all under pressure".

Swissair stumbles on

Swissair said it was planning to run a 55% schedule on Monday, amid continuing fears over plane seizures and fuel supplies.

It will also cut its work force by 12%.

The airline's holding company, Swissair Group, which also controls a number of ground-service and leisure subsidiaries, was granted one month's protection from creditors on Friday.

Most of Swissair's flight operations are due to be transferred to Crossair on 28 October.

Crossair has agreed to take 52 of Swissair's aircraft, but union leaders fear Crossair might be hoping to include fewer planes in the deal than earlier foreseen.

See also:

05 Oct 01 | Business
State warned against buying Swissair
03 Oct 01 | Business
Sabena fights to survive
02 Oct 01 | Business
Airline collapse dents Swiss pride
02 Oct 01 | Europe
Swissair passengers stranded
02 Oct 01 | Business
Q&A: Swissair in crisis
02 Oct 01 | Business
Swissair accepts rescue plan
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