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SWISS Terminates State Backed Bank Loan Facility Ahead of Schedule

SWISS terminated a bank loan facility guaranteed by the government of the Swiss Confederation at the end of May 2022, well ahead of schedule. The airline never used more than half of the available facility and has also paid CHF 60 million in interest and fees.

SWISS Airbus A220 - Courtesy Swiss International Air Lines

On Thursday (June 9, 2022), Swiss International Airlines (SWISS) announced that they terminated their state backed bridge loan facility guaranteed by the Swiss Confederation at the end of May 2022, before the end of the term. Although the carrier never utilized more than half of the available credit facility, they did pay a total of CHF 60 million in interest and fees. Following a restructuring and return to financial stability, SWISS’ future financing needs will be provided by the Lufthansa Group via capital markets. The terminated loan facility had been 85 percent guaranteed by the Swiss Confederation and was available through the end of 2025.

In today’s announcment, Swiss International Air Lines’ Chairman of the Board of Directors, Reto Francioni, said,

“The COVID pandemic triggered the greatest crisis that the aviation sector has ever experienced all over the globe. We are thankful to the Swiss Confederation, led by the Federal Department of Finance, for their belief in the future of our company in this very difficult period. And we have demonstrated in return just how much substance and how much further potential we have within our ranks. Through this great collaborative achievement, the Swiss Confederation, the banks and SWISS have jointly ensured that one of the most vital companies to the Swiss economy has been able to meet and master the acute threat it faced as a result of the COVID crisis.”

Also commenting on the early loan termination, SWISS chief Executive Officer and Edelweiss Chairman, Dieter Vranckx, said,

“We are very grateful to the Swiss Confederation that, together with the banks, it provided SWISS and Edelweiss with the liquidity they needed during the COVID pandemic. As a result, we were able to secure the jobs of a large part of our Swiss-based workforce and give ourselves sustainably competitive cost structures, while still keeping Switzerland connected with the world throughout the pandemic period. And we have now been able to ramp up our operations again at our Zurich hub in harmony with the further hubs of the Lufthansa Group, and to proportionately develop our range of air services.”

Following the outbreak of the global COVID-19 pandemic in early 2020, SWISS immediately initiated cost-saving measures to stem their liquidity outflow. The carrier was also supported with CHF 500 million in loans from the Lufthansa Group. During summer 2021, SWISS launched a restructuring program which saw a 15 percent fleet downsizing and a workforce reduction of around 1,700 full-time employees by the end of last year.

Source: Swiss International Air Lines


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