Swiss International Air Lines terminated the bank loan facility that had been 85% guaranteed by the Swiss Confederation ahead of time, the company said today. The support was initially scheduled to end in 2025. Lufthansa Group, its parent company, will cover future financing needs through capital markets.
The airline never used more than half of the total amount available through the loan. On the other hand, it paid a total of 60 million Swiss francs in fees and associated interest.
In this regard, the company highlighted the support to many of its staff during the COVID-19 pandemic. «SWISS has fully complied at all times with the locational conditions which were tied to the Swiss state-backed financial support and, following its restructuring, has now returned to financial stability», they said.
The early cancellation of the credit line took place in a context of a consolidated recovery of supply and demand in the air travel market. The easing of restrictions and the consequent increase in the number of operations allowed a positive evolution of the company’s liquidity.
Reto Francioni, Chairman of the SWISS Board of Directors, said that the pandemic «triggered the greatest crisis that the aviation sector has ever experienced all over the globe». «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 crisis», he added.
In March 2020, when the first measures to restrict air travel were taken, the company implemented cost-saving measures to reduce the loss of liquidity. Lufthansa Group has contributed with 500 million Swiss francs since then. The state aid, monitored by the Swiss Aviation Foundation, laid down the requirement that the airline develop proportionally compared to the parent company’s other airlines.
In mid-2021, Swiss International Air Lines began a restructuring process. It reportedly reduced its aircraft fleet by 15% and its employee headcount by about 1.700 full-time positions by the end of the year.
«We have now been able to return SWISS to financial stability and generated a positive cash flow in the first quarter of this year», said Markus Binkert, the company’s CFO. «This in turn enables us to emerge from the Swiss state’s support ahead of time and meet our future financial needs on the capital markets via the Lufthansa Group», he concluded.
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