Crossair is pushing ahead with the integration of flight operations with Swissair, absorbing a further nine of its former parent's European routes. Hopes the airline could be rescued by an outside investor were raised as it emerged that US investment company Texas Pacific may make a $7 billion bid for the group.
Without further financial intervention there are doubts over where the funds will come from to transform the regional airline into Switzerland's new flag carrier.
Crossair is strengthening its network with the addition of former Swissair destinations from Zurich to Amsterdam, Budapest, Ljubljana, Lyon, Manchester, Oslo, Triana, Warsaw and Zagreb. At the same time Crossair is taking over full responsibility for a series of other European routes it was operating on behalf of Swissair.
Sixty percent of its European scheduled services and 70% of intercontinental flights are being operated by Swissair until 28 October when the new airline takes over. A Swiss Government loan of SFr450 million ($300 million) is keeping the airline upright until the end of the month.
Crossair/Swissair project teams have been working since last week to manage, among other integration issues, the takeover of two-thirds of the flag carrier's routes by the end of the month. Details of the deal are likely to emerge soon.
Crossair's short-term security has been given a boost, meanwhile, with the decision by the country's federal ministry of finance to conduct a daily check of financial flows to provide an early warning of potential liquidity problems. Further immediate relief for the group came with reports that a SFr250 million bridging loan had been secured for the catering, handling, maintenance and information technology businesses.
While these developments will help in the immediate future, there are doubts Crossair alone can raise sufficient capital to transform itself into a major European carrier.
UBS Bank said on 10 October that Crossair needs "a multiple" of the SFr1.4 billion ($860 million) provided under the immediate rescue operation by UBS and Credit Suisse Group, which between them acquired 70.35% of Crossair earlier this month. Unconfirmed estimates pointed to the need for SFr2 billion in equity capital, some four times the level at the end of last year.
Although Texas Pacific declined to comment as Flight International went to press, it appeared a $7 billion bid was in the offing. The company saved Continental Airlines with a recapitalisation plan in 1993 and has gone on to take stakes in a number of airlines in recent years.
Source: Flight International
