Thousands left stranded after Swissair collapse

Airlines

Thousands of passengers were stranded at airports all over the world yesterday after Swissair suspended all its flights indefinitely.

It is the first major airline that has been forced to cease operations since the atrocities in the US, although analysts believe it may not be the last. The once-proud company admitted it could no longer afford to continue flying its 77 planes, with oil companies demanding payment in advance for fuel.

Officials at Heathrow impounded two Swissair planes with passengers on board after a row over landing fees. Concern also mounted over the future of Sabena, Belgium's national airline, which is part-owned by Swissair.

Patrick Jeandrain, a spokesman for Swissair, said there was nothing the carrier could do for passengers left at airports, many of them understood to be Britons. "We cannot reimburse tickets or offer alternative flights. We are aware it is a disaster for our clients but at the moment there is nothing we can do because we have no money."

It was expected there would be more job losses at the carrier on top of the 2,650 redundancies announced on Monday. Unions believe a total of 10,000 staff might have to go.

Services were suspended after Swissair filed for protection from creditors. The company will now rely on banks to provide funds to enable it to resume operations.

The shutdown meant that all services from the airline's home airports of Zurich and Geneva were suspended, although any aircraft that were already en route were ordered to continue. Swissair also faced problems with fuel supplies. BP would only provide fuel for which it had already been paid and Shell stopped supplies altogether over unpaid bills.

Heathrow officials seized two Swissair Airbuses, an A-321 and an A-330, after claiming that landing fees totalling a reported £300,000, had not been paid. A spokesman for the airport said passengers on the planes disembarked and claimed they had not suffered any inconvenience.

Swissair claims the crisis is likely to cost it between £1.3bn and £1.7bn by the end of this year. The company said on Monday that it was seeking legal protection from creditors while it underwent a radical restructuring. Under Swiss law, the move allows the company time to reorganise itself without being carved up by a bankruptcy court.

As part of a cost-cutting exercise, the company withheld a payment of £83m to the Belgian airline Sabena, of which Swissair owns 49.5 per cent. Sabena said its services had not been affected despite Swissair's difficulties and it would handle the Brussels-Zurich route. But the Belgian government, which owns the majority stake in Sabena, was outraged by Swissair's attempt to seek protection from creditors and said it would go to court to force the company to provide the cash.

All major airlines, including British Airways, have announced job cuts, with some also offering discounts to woo back passengers.

* Reagan National Airport in Washington, closed since the terrorist attacks because of its proximity to the White House and Capitol building, will reopen under tight security tomorrow, President Bush announced.