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Swiss government offers funds to support aviation sector

Swiss government offers funds to support aviation sector

The Swiss government will provide CHF1.9 billion (£1.6 billion) to the domestic aviation sector to bridge liquidity shortfalls as a result of the coronavirus pandemic.

Some CHF1.275 billion will go directly for the two airlines, Swiss and Edelweiss, while up to CHF600 million will be allocated to other companies vital to the functioning of the sector.

The Swiss parliament still needs to sign off on the package.

Aircraft movements at Swiss national airports have ground to a near halt, placing both carriers and the wider sector under severe financial strain.

The aid, first mooted by transport minister Simonetta Sommaruga last month, comes with strict conditions, primarily that the funds used are only to be used for Swiss infrastructure.


And while Swiss, a subsidiary of German group Lufthansa, and Edelweiss will benefit, easyJet Switzerland will not.

The low-cost carrier must instead look to its British parent company to solve any liquidity issues, the Swiss government explained.

The government said that future earnings by Swiss and Edelweiss should be prioritised to repay the aid, while dividends and other such payments will be forbidden until this is done.

The loans will be secured against Swiss and Edelweiss shares, but the government will not initially take a stake.

The liquidity needs of Swiss and Edelweiss are estimated to be around CHF1.5 billion up to the end of 2020.