DALLAS – SWISS International Air Lines AG (LX) announced that it terminated its bank loan 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 backed by a CHF 500 million loan from its parent company. During one of the worst downturns in aviation history,
SWISS has taken extensive cost-cutting measures to protect its financial position. This saw its fleet reduced by around 15% and its manpower reduced by 1,700. However, many jobs were saved with the loan, and the airline continued to operate throughout the pandemic.
“The measures we have taken are paying off,” said the airline’s chief financial officer, Markus Binkert. “After suffering cumulative losses of more than CHF 1 billion over the past two years, we have now been able to bring SWISS back to financial stability and generated positive cash flow in the first quarter of this year.”
Binkert added: “This, in turn, allows us to exit Swiss state support in advance and meet our future financial needs in the capital markets through the Lufthansa Group.”
During the term of the loan, LX never used more than half of the total amount made available. While the aviation industry is slowly recovering, the airline is now stable enough to meet its own financing needs. The Lufthansa Group will now assume all future financial needs.
SWISS Chairman of the Board, Reto Francioni, said: “We are grateful to the Swiss Confederation, led by the Federal Department of Finance, for their confidence in the future of our company at this very difficult time. And we have demonstrated in return how much substance and additional potential we have in our ranks.
Francioni added: “Thanks to this great collaborative achievement, the Swiss Confederation, the banks and SWISS have jointly ensured that one of the most vital companies for the Swiss economy has been able to face and contain the acute threat to which she was facing the aftermath of COVID. crisis.”
Featured Image: SWISS was the launch customer for the Airbus A220. Photo: Robert Dumitrescu/Airways