Government ministers admonished Swiss International Air Lines (SWISS) directors for paying out bonuses last year despite receiving state aid to help the company through the liquidity crisis caused by Covid-19.
In October 2020, it was reported that SWISS had paid out bonuses despite the airline undergoing significant losses and requiring public funding to help it through the pandemic. The bonuses, based on figures from 2019, were attributed to members of the company’s executive board.
On Sunday, it was revealed by the SonntagsBlick newspaper that Swiss President Simonetta Sommaruga and Finance Minister Ueli Maurer had written to SWISS management in December 2020 to express their annoyance at the bonus pay-outs. The paper had access to their correspondence based on the Public Information Act.
“The payment of variable salary components for the 2019 financial year to various members of the Executive Board of Swiss International Air Lines AG at the end of October caused a stir both politically and in the media. The Finance Committee of the House of Representatives also took up the issue and was irritated by the corresponding payments in the current difficult situation of Swiss. We can well understand this irritation,” they wrote.
“In the negotiations between the Confederation, the banks and SWISS, the airline has assured the Confederation 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 asked for the bonuses not to be paid and for base salaries for top management at SWISS and Edelweiss not to be given until the loans had been fully repaid.
SWISS, along with parent company Lufthansa, had experienced significant losses since the start of the pandemic. In April 2020, the government agreed to give SWISS and Edelweiss CHF1.275 billion ($1.31 billion) in state aid to help them through the crisis. Aviation was part of the country’s “critical infrastructure”, it said.
SonntagsBlick reported that SWISS intends to comply with the ministers’ request to waive the management bonuses until the loan has been repaid in full. However, SWISS managers left themselves the option of increasing their base salaries beforehand, it said.
Earlier this month SWISS reported an operating loss of CHF398 million ($440 million) for the first six months of 2021. The airline said a factor for the higher losses was a cost-saving programme to the tune of CHF500 million. The company is due to shed about 550 jobs by the end of 2021. However, it will only use about half of the CHF1.5 billion government bailout, it said.
Source: Swiss Info