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DALLAS – SWISS International Air Lines AG (LX) has announced that it has terminated its bank loan facility before the end of the term.
The loan, 85% guaranteed by the Swiss Confederation, was issued to protect the airline following the pandemic outbreak in March 2020 and was due to end in 2025.
As part of the Lufthansa Group, LX was also supported with a CHF500m loan from its parent. During one of the worst downturns in aviation history,
Cost-Saving Measures
SWISS initiated extensive cost-saving measures to protect its financial position. This saw its fleet reduced by around 15%, and its workforce slashed by 1,700. However, many jobs were saved thanks to the loan, and the airline continued to operate throughout the pandemic.
“The actions we took are having their effect,” the airline’s Chief Financial Officer, Markus Binkert, explained. “After incurring cumulative losses of more than CHF 1 billion in the past two years, we have now been able to return SWISS to financial stability and generated a positive cash flow in the first quarter of this year.”
Binkert added, “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.”
Financial Stability
During the loan period, LX never used more than half of the total amount made available. As the aviation industry slowly recovers, the airline is now stable enough to meet its own financing needs. The Lufthansa Group will now take up any future financial requirements.
The Chairman of the SWISS Board of Directors, Reto Francioni, said, “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.”
Francioni added, “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.”
Featured Image: SWISS was the launch customer for the Airbus A220. Photo: Robert Dumitrescu/Airways
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