Cash-strapped Swiss airline Swissair has grounded its fleet after suppliers refused to deliver fuel and foreign airports insisted on prompt payment of landing fees.
The unprecedented halt in Swissair's operations highlighted the depth of the financial crisis at the once-proud Swiss flag carrier, which on Monday was partially saved from collapse by a £590 million bailout hastily put together by Switzerland's two top banks.
Swissair Group's finances, already stretched to the limit by a failed expansion strategy, have melted down after the September 11th airline attacks in the United States prompted a drastic fall in air traffic around the world.
Banks, UBS and Credit Suisse Group, stepped into the breach, salvaging the Swissair brand and most of the airline from the group. But they left Swissair's other businesses to deal with some 17 billion francs of debt sustained as the group tried to buy its way into the big airline league.
The bulk of Swissair's airline operations are to be combined with regional carrier Crossair after the banks took over Swissair Group's 70 per cent stake in the smaller, but healthier, airline. The remainder of Swissair Group will file for creditor protection, and thousands of jobs will be lost.
At Zurich airport, the company's main hub, hundreds of stranded passengers were waiting for word on the fate of their flights. "Swissair is waiting for money from a big bank," said an announcement over loudspeaker in the departure lounge.
Company sources said flights were grounded as pilots waited for cash to pay for fuel deliveries and landing fees. Jet fuel suppliers at Swissair's Zurich hub halted all deliveries because of the company's cash woes, an industry source said.
Analysts said Swissair shares were set to become worthless when trading resumes tomorrow.
Swissair's woes also had immediate repercussions for other airlines. It earlier halted all flights to Brussels out of fears of a repeat action by employees at its equally troubled affiliate Sabena, which earlier this year grounded one of the company's jets in an attempt to force Swissair - a 49.5 per cent shareholder - to pay up for its own rescue plan.