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SR Technics Bankrupt--new Swissair In Trouble

Mon Oct 29, 2001 6:01 am

From the BBC


Swissair's planes could be grounded again because the company that services them is running out of funds, the maintenance firm's president and chief executive have warned.

The emergency task force set up by the Swiss Government to salvage the bankrupt national airline will discuss SR Technics' problems on Monday 29 October, correspondents say.

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

The meeting will take place on a landmark date for the government-backed rescue of Swissair, when ex-subsidiary Crossair - which is now managing the firm - takes over Swissair's European routes and launches the winter schedule.

Struggling maintenance firm SR Technics is also a subsidiary of Swissair Group but falls outside the the group's bankruptcy protection provisions which would have enabled it to fend off its creditors.

Two weeks' money left

SR Technics will go bankrupt unless it finds 30m Swiss francs ($18.1m; £12.6m) in just under a fortnight, Hans Ulrich Beyeler, its president and chief executive, told the Tages Anzeiger newspaper.

The 9 November deadline is not the end of SR Technics' financial troubles. It also needs 250m Swiss francs ($154; £105m) 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 maintaince firm by 9 November.

If Swissair planes are grounded the credibility of Crossair and the rescue of the national airline will suffer, he added.

'Not creditworthy'

"(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.

Job cuts

To save money, Zurich-based SR Technics is cutting 800 jobs out of 3,600.

The Swiss government finalised a $2.65bn (£1.86bn) bailout plan for Swissair on 22 October.

The government put up 1bn Swiss francs (£424m) 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.

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