Government ministers admonished the directors of Swiss International Air Lines (SWISS) to pay out bonuses last year despite receiving state aid to help the company through the liquidity crisis caused by Covid-19.
This content was posted on August 22, 2021 – 3:54 p.m.
It was reported in October 2020external link that SWISS had paid out bonuses even though the airline suffered significant losses and needed public funds to help it through the pandemic. The bonuses, based on figures from 2019, were allocated to the members of the company’s Management Board.
On Sunday, the SonntagsBlick revealedexternal link Federal President Simonetta Sommaruga and Finance Minister Ueli Maurer wrote to the management of SWISS in December 2020 to express their anger about the bonus payments. The newspaper had access to its correspondence under the Public Relations Act.
âThe payment of variable salary components for the 2019 financial year to various members of the management of Swiss International Air Lines AG at the end of October caused a sensation both politically and in the media. The finance committee of the House of Representatives also took up the topic and was irritated by the corresponding payments in the current difficult situation of the Swiss. We can understand this irritation well, âthey wrote.
“In the negotiations between the federal government, banks and SWISS, the airline assured the federal government of restraint with regard to the variable remuneration of the management.”
The ministers described the bonus payments as “politically insensitive” and questioned their timing. They demanded that the bonuses should not be paid out and that the basic salaries for the top management of SWISS and Edelweiss should only be paid out after the loan had been repaid in full.
SWISS and its parent company Lufthansa had suffered considerable losses since the pandemic began. In April 2020, the government agreed to grant SWISS and Edelweiss state aid totaling 1.275 billion Swiss francs (1.31 billion US dollars) to help them through the crisis. Aviation is part of the “critical infrastructure of the country,” it said.
The SonntagsBlick reported that SWISS intends to comply with the ministers’ request to waive management bonuses until the loan has been repaid in full. However, the SWISS executives had previously given themselves the opportunity to increase their basic salaries, it said.
At the beginning of the month, SWISS reported an operating loss of 398 million francs (440 million US dollars) for the first half of 2021. As a factor for the higher losses, the airline named a cost saving program amounting to 500 million francs. The company is expected to cut around 550 jobs by the end of 2021. However, it will only use about half of the state rescue packages amounting to 1.5 billion francs, it said.