So it is with Switzerland

Swiss CEO Thomas Klühr resigns. It has not yet been resolved who will occupy the top position from 2021. One thing is for sure: it will be a great challenge, because the crisis is hitting Switzerland more hard than previously assumed.

He was with Swiss for around five years and with the Lufthansa Group for more than 30 years: Swiss CEO Thomas Klühr. His resignation at the end of the year is for private reasons. Klühr had actually wanted to leave Switzerland before, but due to the crown crisis, he decided to stay in the executive position for a while.

Now he is retiring, but the crisis continues, the airline’s figures are still in the red. Klühr’s successor takes on a difficult task.

The right time for a boss change? In Switzerland they explain that now it is a question of defining the strategy for the coming years. “For this realignment, Thomas Klühr now wanted to free up space for a successor to be named, who can support Swiss in the long term,” says media spokesman Marco Lipp on request.

Aviation expert Laura Frommberg says the timing of an acquisition is extremely bad, but: “In a situation like this, you also have a chance to prove yourself.”

Refunds of more than $ 400 million made

After all, Swiss is the flagship subsidiary of the Lufthansa Group and has made the best profits in the past. “At this moment all the airlines have money problems, more than 20 have already gone bankrupt,” says Frommberg. Industry is about survival.

Swiss is also currently losing around one million francs a day. According to Frommberg, the calculation is very simple: “If you don’t fly, you don’t make money.” That means: Costs, like airport fees or renting parking spaces, remain the same, but revenues have collapsed.

To this are added the pending refunds that must be made for canceled flights. At the end of September, all applications that had been received up to the end of July were processed, says Swiss spokesman Lipp. “In 2020, more than 700,000 applications were processed worldwide and refunds amounting to more than 400 million Swiss francs were made.”

“The industry went back up to 20 years”

Until the global demand for air travel recovers, it will take longer than previously planned at Swiss. Frommberg talks about a patchwork of quarantine regulations and travel restrictions that changed almost daily and presented airlines with great challenges. “In terms of flight level, the industry has been 10 to 20 years behind.”

Swiss currently flies around 30 percent of the originally published flight schedule. The winter flight schedule was released on Tuesday; this will also be only 30 to a maximum of 40 percent of the previous year’s level.

“It should look like it was before the crisis in at least four or five years,” Frommberg says. Also in Switzerland it is expected that the flight level will not stabilize again until 2024 at the earliest. Meanwhile, the company is subject to strict cost-saving measures, also to meet the strict requirements that the Federal Council has imposed on the Lufthansa subsidiary in relation to the 1.5 billion aid package.

Switzerland still wants to avoid layoffs

Swiss costs will be reduced by up to 25 percent; however, the airline is still pursuing the goal of overcoming the crisis with as many employees on board as possible, as Lipp claims. The extent to which this can be achieved also depends on the further development of the corona pandemic.

According to Lipp, a “substantial reduction in personnel costs” must be achieved in all areas of the company. That is why we are currently in talks with our social partners, in which, among other things, we are talking about extended part-time models and flexible options for early retirement ”.

The social partners are less optimistic. The Swiss Association of Public Service Personnel (VPOD) considers 1,425 of the 9,500 Swiss positions to be at risk due to anticipated cost savings. This corresponds to job cuts of up to 15 percent.

Despite starting indications: a successor has not yet been determined

One thing is clear: CEO Klühr’s successor will face a huge operational challenge. It is not yet clear who should face this, although Klühr’s departure was already evident earlier in the year.

Swiss wants to determine the successor in the fourth quarter of the year. Aviation expert Frommberg assumes that behind the scenes at least the successor has been thought about.

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