Swissair OKs Banks’ Financial Rescue Plan

Swissair Group, crushed by debt and a sharp decline in air travel, said it will hand over most of its Swissair flights to low-cost regional carrier Crossair and seek court protection from creditors for other key businesses.

Capping its dramatic fall from the Swiss corporate elite, the carrier said it will cut 2,560 jobs while the smaller but healthier Crossair unit will take over two-thirds of Swissair’s flight operations before the end of the month.

Presenting a last-minute deal to avert bankruptcy, Chairman Mario Corti told a news conference that Swissair Group will sell the 70.4% stake it now holds in Crossair to Switzerland’s top banks UBS and Credit Suisse Group for $160.4 million.

The banks helped put together the partial rescue package by jointly providing a total of $841.4 million in financing.