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Monday, 29 October, 2001, 12:13 GMT
New threat to Swissair
SR Technics web site
Maintenance firm puts Swissair back in the hangar?
Swissair's planes could be grounded again because the company that services them is running out of funds, the maintenance firm's management has warned.

The Swiss Government's emergency task force to salvage the bankrupt national airline is meeting to discuss SR Technics' problems on Monday 29 October.


A second grounding is possible that would mean the end of the new national airline

SR Technics chief executive

But a spokesman for the Finance Ministry made it clear that SR Technics cannot expect a cash injection from the state, which has already put up 1bn Swiss francs (242m) to keep Swissair flying.

Daniel Eckman said the Swiss Government "made a clear separation of responsibilities" under which "it is up the canton [state] of Zurich, the banks and airport companies to solve this problem".

German airline's fears

The commercial fallout from Swissair's bankruptcy filing has now spread to Germany, where the country's third-biggest charter airline, LTU, said it would collapse by mid-November without more funds. LTU is half-owned by Swissair.


We're all waiting for the letter tomorrow that will say whether we have a job or not

Swissair spokesman
The emergency task force meeting to save SR Technics coincides with the new winter schedule, and Swissair staff are waiting to hear whose jobs will go.

"We're all waiting for the letter tomorrow that will say whether we have a job or not", a Swissair spokesman said.

The schedule means that Swissair's European routes are now being flown by Crossair, the ex-subsidiary now running Swissair.

The struggling maintenance firm is a Swissair Group subsidiary but fell outside the the group's bankruptcy protection provisions which would have enabled it to fend off its creditors.

But, in a double blow, it is unable to obtain payments owed by Swissair, its largest client.

Two weeks' money left

SR Technics will go bankrupt unless it finds 30m Swiss francs in just under a fortnight, Hans Ulrich Beyeler, its president and chief executive, told the Tages Anzeiger newspaper over the weekend.

The 9 November deadline is not the end of SR Technics' financial troubles. It also needs 250m Swiss francs to remain in business, Mr Beyeler said.

For his part, Crossair chief executive Andre Dose told Swiss Radio a solution is needed because the airline will be unable to find a new maintenance firm by 9 November.

And he said another part of Swissair could go bust even faster than SR Technics.

Flight information provider Atraxis needs the same amount of money as Swissair, "but even faster", he said.

Atraxis could fail within two days. "Before the end of the month it needs to be clear where the money is coming from," according to Mr Dose.

Atraxis provides reservation systems and baggage handling services. Its clients include Turkish Airlines, South African Airways and Lot, the Polish airline.

'Not creditworthy'

SR Technics warned if Swissair planes are grounded the credibility of Crossair and the rescue of the national airline will suffer.

"[Crossair] would be affected, because the Swissair planes would remain grounded. A second grounding is possible that would mean the end of the new national airline," Mr Beyeler said.

SR Technics did not benefit from the bridging loan that two major Swiss banks granted to Swissair Group because "the banks do not think we are creditworthy," Mr Beyeler told the newspaper.

Talks with several major banks are taking place, he said.

Crossair chief executive Mr Dose has suggested one solution may be for his firm to absorb SR Technics, according to press reports.

Bail-out

The Swiss government finalised a $2.65bn bail-out plan for Swissair on 22 October.

The government put up 1bn Swiss francs to allow Swissair to continue operating some long-haul routes until April and took a 20% stake in Crossair, which will take over most of Swissair's planes and routes.

Between 9,000 and 27,000 jobs will be scrapped out of Swissair's global workforce of 70,000.

Private firms contributed 720m in aid, including a loan from two major Swiss banks.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Imogen Foulkes
"The loss of its short haul flights marks the end for Swissair"
See also:

22 Oct 01 | Business
Round-up: Aviation in crisis
22 Oct 01 | Business
State saves Swissair
16 Oct 01 | Business
Companies back Swissair rescue bid
11 Oct 01 | Business
Question marks over Swissair rescue
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