Switzerland made millions supporting Covid-hit aviation sector

Airlines and other critical companies received nearly CHF2bn in bailout funds. © Keystone / Gaetan Bally

Bailing out the Swiss aviation sector through the Covid-19 pandemic resulted in a CHF32 million ($33 million) profit, according to an audit office report.

The government handed out nearly CHF2 billion in emergency loans and credit lines to two airlines and other critical aviation infrastructure.

Interest payments on loans plus additional fees had netted the state CHF32 million by the end of August last year, said the Swiss Federal Audit Office (SFAO).

The German-owned national carrier Swiss International Air Lines and the airline Edelweiss paid back their loans in June 2022.

Bridging loans were made available for other companies deemed critical to the functioning of the aviation sector, such as technical support firm SR Technics.

Despite the financial success of the bailout, the audit office criticised some aspects of the way it was handled.

The Federal Office for Civil Aviation (FOCA), which was given responsibility to assign the bailout funds, lacked an adequate risk assessment model, the report states.

And auditors found that the Aviation Foundation, set up to ensure compliance with the terms of the bailout, was not sufficiently independent. The foundation was dissolved when the pandemic eased.

In response to the criticism, FOCA pointed to the fact that the companies had both survived and paid back bailout money.

26.10.2022: This article has been updated to correct an earlier statement that Swissport had received state funding.