Swissair's finances have reached a critical state, so much so that the airline says it can't guarantee its flight schedule for the rest of this week.

The company says it needs more than $1 billion US in new money to survive the decline in airline travel that followed the Sept. 11 terrorist attacks in the United States.

The airline is in talks with the Swiss government after reportedly being refused a loan for the full amount from the banks it normally deals with.

Swissair says it was struggling with a huge debt, on top of more than $1.5 billion US in losses incurred last year, before the four suicide hijackings sparked a sharp decline in airline travel.

Trading in the company's shares was suspended on Monday in Zurich. The stock has lost almost half its value since Sept. 11. Last week, the company laid off 3,000 people, mostly in North America, and more people could lose their jobs this week.

The airline says it plans to concentrate more on business travel within Europe. It will cut its long-haul flights by 25 per cent.