SWISS prematurely terminates its bank loan facility guaranteed by the Swiss government

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Swiss International Air Lines has prematurely terminated the bank loan, which is 85 percent guaranteed by the Swiss Confederation, the company announced today. Support was originally scheduled to end in 2025. The Lufthansa Group, its parent company, will cover future financing requirements via the capital markets.

The airline never used more than half of the total amount available through the loan. On the other hand, she paid a total of 60 million Swiss francs in fees and related interest.

In this regard, the company highlighted the support of many of its employees during the COVID-19 pandemic. “SWISS has always fully met the location requirements associated with the Swiss state financial aid and is now financially stable again after the restructuring,” it says.

The early termination of the line of credit took place in the context of a consolidated recovery in supply and demand in the air travel market. The easing of restrictions and the consequent increase in the number of operations enabled the company’s liquidity to develop positively.

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Reto Francioni, Chairman of the Board of Directors of SWISS, said that the pandemic had “triggered the biggest crisis worldwide that the aviation industry has ever experienced”. “With this great joint effort, the federal government, the banks and SWISS have together ensured that one of the most important companies in the Swiss economy was able to master the acute threat posed by the crisis,” he added.

In March 2020, when the first measures to restrict air traffic were taken, the company took cost-saving measures to reduce the loss of liquidity. Since then, the Lufthansa Group has contributed 500 million Swiss francs. The state aid, monitored by the Swiss Aviation Foundation, provided for the airline to develop in proportion to the parent company’s other airlines.

In mid-2021, Swiss International Air Lines initiated a restructuring process. It reportedly reduced its aircraft fleet by 15% and its workforce by about 1,700 full-time positions by the end of the year.

“We have now been able to stabilize SWISS financially again and generated a positive cash flow in the first quarter of this year,” says Markus Binkert, the company’s CFO. “This in turn allows us to get out of the support of the Swiss state ahead of time and cover our future financing needs on the capital markets via the Lufthansa Group,” he concluded.

See also: SWISS and Google Cloud work together to streamline operations

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