SkyEurope wins grace period from Vienna airport

VIENNA Tue Aug 11, 2009 10:59am EDT

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VIENNA Aug 11 (Reuters) - Troubled Slovak airline SkyEurope SKYV.VI won a grace period until Friday to pay outstanding invoices after Vienna airport temporarily grounded its flights on Tuesday, airport operator Flughafen Wien (VIEV.VI) said. Budget airline SkyEurope, which obtained creditor protection in Slovakia in June and has been seeking to raise new funds for months, has to pay its debts to Flughafen by Friday, 1300 GMT or else the operator will suspend all services, Flughafen said.

Vienna airport on Tuesday grounded SkyEurope flights including to Athens and Nice because it said the operator had not paid its dues. It resumed its services after SkyEurope promised to pay them by Friday, Flugafen said.

SkyEurope said last month it had found a new investor who was ready to inject as much as 16.5 million euros in fresh equity and also got a 5 million euro bridge loan.

The economic slowdown has hit the airline hard and its financial problems have added to the woes as it lost even more passengers because of concerns it may go insolvent. In July, passenger traffic declined by 37 percent year on year. (Reporting by Boris Groendahl; Editing by Jon Loades-Carter)

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