European airlines in crisis

The Swissair fleet has been grounded

ZURICH, Switzerland -- Airlines across Europe are reporting drastic falls in passenger numbers and profits in the wake of the U.S. suicide bombings.

Swissair, which was grounded by financial problems on Wednesday, was bailed out by its government, and Belgian flag carrier Sabena filed for bankruptcy protection.

Other airlines from British Airways to the Czech Republic's state-run CSA have reported a huge drop off in passengers especially on trans-Atlantic routes.

Swissair hopes to resume flights on Thursday after $278 million of new cash was ploughed into the company by the government -- enabling it to keep operating until October 28.

VIDEO CNN's Hala Gorani on the crisis facing cash-strapped Swissair. Play video (QuickTime, Real or Windows Media)   MORE STORIES CNN Business: Crisis-hit Swissair talks to banks   Air passengers face misery   BA rocked by U.S. attacks      QUICKVOTE Are your travel plans being disrupted? Yes No View Results

The airline cancelled 262 flights on Wednesday leaving 19,000 passengers stranded because of its cash crisis.

Swissair's collapse reverberated around Europe and came at a time of crisis in the airline industry following the suicide hijackings in the U.S. on September 11.

As the battle was on to save Swissair, Belgium's flag carrier, Sabena, 49.5-percent owned by Swissair, filed for bankruptcy protection.

Sabena's move came when Swissair reneged on a promise to give it a much-needed cash injection of 200 million Swiss francs.

The Sabena board met on Tuesday to discuss the consequences of the Swissair Group announcements.

In a statement on the company's Web site, Chairman Fred Chaffart said: "Swissair hasn't lived up to any of their commitments.

"We'll hold them accountable for the situation we're in. The claims against Swissair will be reactivated."

In a statement, Sabena said: "Sabena has the necessary cash to guarantee normal activities for the time being.

"But in order to secure future operations as well as the interest of every creditor, the company has filed today a petition" for protection from creditors."

In another development, hundreds of jobs were lost in the UK when BMI British Midland confirmed that it is to shed 600 jobs.

Meanwhile, French carrier Air France said in a statement on Tuesday that a drop in air travel in the 10 days that followed the attacks stripped $55 million off its operating profit with traffic falling 15.9 percent.

Elsewhere, the Czech state-run airline CSA said Wednesday that trans-Atlantic flights are now only 60 percent full, compared with 90 percent before the attacks and that it will reduce the number flights to the United States.

Overall bookings have fallen by almost 15 percent, said Miroslav Kula, the airline's president.

On the markets, Swissair shares had plunged 88 percent to 6.5 Swiss francs, after opening at 127, by the end of trading on Wednesday following a two-day suspension in trading.

Swissair Group ran out of cash after its finances, already stretched to the limit by a failed expansion strategy, dwindled in the wake of the loss of consumer confidence following the September 11 airline hijacks in the United States.

A Swissair spokesman said the company was "technically ready" to resume flying on Thursday. "We just need the green light, we need cash," he added.

Stranded passengers found their Swissair tickets worthless as the company said they would have to make their own travel plans.

Swissair passengers stranded at Zurich airport

The cash-strapped airline was able to switch passengers to its subsidiary carrier Crossair.

"Anyone with a valid Swissair ticket will be able to travel on Crossair today," said a Swissair spokesman on Wednesday.

Meanwhile, British low-cost carrier easyJet said it would fly Swissair passengers on its planes for just £20 ($27).

A statement on the company's Web site said: "Following (Monday's) announcement that the entire Swissair fleet has been grounded, easyJet is offering to assist stranded passengers by flying them on services between London Luton and London Gatwick to Geneva, London Luton to Zurich, and Geneva to Barcelona and Nice for just £20."

Swissair said that about 3,000 to 4,000 passengers were stuck at Zurich's airport, whose operator was putting them up in hotels as necessary.

Passengers at Zurich were told over loudspeakers their useless Swissair tickets would not be reimbursed and new tickets should be bought elsewhere.

Some Swissair workers openly wept or struggled to hide their tears.

Swissair said the suspension of operations would put even more jobs at risk than the 2,650 staff cuts announced as part of the drastic restructuring programme designed to salvage part of the collapsed group's airline activities.

Swissair said there was nothing it could do for stranded passengers.

Spokesman Patrick Jeandrain told the UK's Press Association news agency: "Being out of cash, 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."