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Swissair halts all flights
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October 2, 2001: 8:00 a.m. ET
Swiss airline stops flights; jets impounded in London
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LONDON (CNN) - Beleaguered Swissair group has said it is suspending all its flights as it has been unable to find the cash to keep flying.
The airline on Tuesday saw some its jets being impounded, fuel suppliers refusing to refill its aircraft and airports insisting on prompt payment of landing fees as the company's funds ran out.
The suspension was indefinite and jets currently abroad would be flown home as soon as possible, Swissair said.
At Zurich airport, the airline's home base, a message over the loudspeakers told hundreds of stranded passengers they would not be compensated for their now apparently worthless Swissair tickets and advised them to buy new tickets elsewhere, Reuters reported.
The airline said in a statement: "Despite intensive talks during the entire day, it was not possible to secure the liquidity necessary for the daily business and safe operations."
The suspension affects thousands of workers and will put even more jobs at risk than the 2,650 redundancies announced on Monday, Swissair said.
The move came after two of Swissair Group's aircraft were impounded at Heathrow airport amid concerns the troubled group may not be able to pay its bills.
BAA, the world's biggest airport operator, told CNN it had taken the action "in the light of uncertainty over payment by Swissair of outstanding charges."
Several other Swissair aircraft were also seized across Europe.
Switzerland's two biggest banks had salvaged the Swissair brand and some profitable operations on Monday, leaving the group with a mountain of debt.
UBS and Credit Suisse Group agreed to take control of the airline business of Swissair and bought its 70.4 percent stake in low cost carrier Crossair for 260 million Swiss francs ($160 million).
The banks plan to fold Swissair's airline business into Crossair and provide 500 million francs in extra working capital and underwriting a capital (share) increase of up to 350 million francs.
Swissair Group Chairman Mario Corti told Belgium's Prime Minister on Monday that the company would not pay Sabena  132 billion that it had agreed to in August. Sabena, facing debt problems of its own, is 49 percent owned by Swissair.
Corti halted services to Brussels on Tuesday amid concerns Sabena's employees may ground their jets, an action they took earlier this year to persuade Swissair to invest in the loss-making carrier.
Brussels said it would take immediate legal action against Swissair and possibly UBS and Credit Suisse Group, Reuters said.
Swissair, which posted a record loss of 2.9 billion francs last year, had already been on the brink of collapse as it attempted to reverse an expansionist policy that left it 17 billion francs in debt. The September 11 terror attacks on the U.S. led to falls in passenger traffic and accelerated its demise. 
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