Swissair Rescue Plan Approved

The Swiss parliament approved the government’s $1.2-billion contribution to a rescue package for part of national airline Swissair Group, which filed for bankruptcy protection last month.

Both houses backed the plan to save as much as two-thirds of Swissair’s fleet by shifting it to regional carrier Crossair. The assembly met for an extraordinary two-day session after the government stepped in last month to forestall the airline’s collapse.

Swiss companies such as UBS and Novartis, as well as wealthy individuals, also pledged funds for the $2-billion plan. Some of the government money already has been spent to avoid a second grounding of Swissair after it stopped all flights for two days at the start of October.

“A highly developed economy like ours must mesh with the rest of the world and have as many direct intercontinental links as possible,” Finance Minister Kaspar Villiger said.

Two-thirds of the government money will enable Swissair to continue flying until the end of March, when Crossair will take over its aircraft. The rest is part of a capital increase for the Basel-based airline, which will become the new national carrier.

Outside the parliament building, Swissair staff collected money for the 4,500 people being fired in Switzerland whom the airline can’t afford to pay until the end of their notice period. Parliament rejected proposals for Crossair to pay them from the new capital it’s receiving from investors.

Swiss President Moritz Leuenberger said the main reason the government stepped in was to help Swissair staff by trying to rescue as much of the group as possible.

“We had two painful choices--an orderly transfer or a chaotic collapse--and we chose the most social,” he said.

The government’s effort was opposed by the Swiss People’s Party, one of four in the ruling coalition. The party--whose most prominent member is billionaire Christoph Blocher, chief executive of Ems-Chemie Holding--is against state intervention in private industry.

“Why should the taxpayer pay for management mistakes?” party President Ueli Maurer said. “It’s a dangerous precedent.”

Parliament also approved money to pay for a special audit of Swissair’s management under Chairman and Chief Executive Philippe Bruggisser, who quit in January. Swissair ran up debt of as much as $10.3billion.

The extraordinary session is only the third in 15 years. The two other sessions were meetings on the effects of the Chernobyl nuclear accident in 1986 and on the merger of Union Bank of Switzerland and Swiss Bank Corp. to form UBS in 1998.