Air-Glaciers (AGV, Sion) is threatened with bankruptcy after the City of Sion filed a CHF1 million (USD1.05 million) claim against the airline for unpaid fuel bills dating back several months. Despite the threat, Managing Director, Bruno Bagnoud, told the Nouvelliste newspaper last week that while his airline had occasionally had problems settling its accounts with the municipality on time, the two had always been able to reach a compromise.

"It's true. We have been struggling to pay our bills, but these are just formalities. I am still confident about the future," he said.

Air-Glaciers was recently forced to sell off its newly built hangar at Sion airport for CHF6 million (USD6.3 million) to help improve its financial standing. The funds were used to help settle, in part, other debts amounting to CHF2.6 million (USD5.6 million) the report said.

Bagnoud blames his airline's difficult situation on the cantons themselves claiming they have not been paying for medevac (medical evacuation) flights on time.

To make matters worse, Air-Glaciers's role in its once mainstay niche market - mountain medevac flights - may now be curtailed given new European regulations requiring all medical helicopters to be twin-turbine machines. The firm's fleet - the largest in Switzerland - consists primarily of single-turbine Eurocopter AS350s, EC120s, AĆ©rospatiale Alouette IIIs and SA 315B Lamas.

Air-Glaciers also operates air taxi and sightseeing flights. Its fixed-wing fleet of Beech (twin turboprop) King Air 200s and PC-6s are also used to ply scheduled flights between Sion and the French and Italian Rivieras.