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In operating terms, the Swiss airline posted a loss of 414.7 million Swiss francs in the first nine months after a profit of 489.6 million Swiss francs in the same period last year. Sales fell 62 percent to 1.54 billion francs, as Swiss announced.
Blame it on the corona pandemic, which is why 95 percent of the fleet was on land at times. It is true that Swiss was able to gradually increase its range again in the summer months to a greater extent than expected. However, increased travel restrictions held back the recovery since mid-August.
Various quarantine regulations have crippled customers’ desire to travel in recent months. In light of this, “the operating result is in line with our expectations,” said CFO Markus Binkert. In the first nine months, Swiss still carried a total of 4.3 million passengers. That’s about 70 percent less than in the same period last year. The only positive was the high demand for merchandise.
Reserves drastically decreased
After all, things picked up in the summer: in the holiday months, the Swiss airline was able to carry out up to 40 percent of the originally planned flight schedule. “This even slightly exceeded expectations,” wrote Swiss, which was able to contain its loss compared to the previous quarter.
“However, increasing and changing travel restrictions and quarantine rules cut off the emerging recovery since mid-August,” he said. Reserves have fallen dramatically, Binkert said.
By stepping on the cash and cost brakes, Swiss was able to reduce the outflow of funds. The Swiss continue to lose on the order of 1.5 to 2 million francs a day, Binkert said in an interview with the AWP news agency: “Despite the extremely difficult market environment, we are on the right track with regard to bank loans . This does not jeopardize liquidity. “
“The loss will continue to increase”
Given the recent surge in corona cases around the world and the associated tightening of global travel restrictions, demand is likely to decline further in the fourth quarter. “Therefore, the loss is likely to increase further by the end of the year. For the first time in 15 years, Swiss will close the financial year with a negative result, ”the statement said.
The airline has launched a restructuring program to be able to repay the state-guaranteed crown bank loan as quickly as possible and ensure competitiveness. Among other things, all non-operational projects and investments would continue to be suspended.
1000 jobs are being eliminated
In addition, Swiss wants to reduce personnel costs through a hiring freeze, part-time models with salary exemptions and early retirement. “Along with the natural fluctuation, around 1,000 jobs can be eliminated in this way over the next two years,” he said.
“At this time, no layoffs are planned,” Binkert said. Whether that’s enough will depend on how aviation recovers. We will probably see it around spring. “Last year, Swiss had 9,500 employees. Discussions are also taking place with the social partners to adopt further cost-cutting measures. Swiss did not provide details.
In addition, the 28 aircraft of the former Airbus A320 family would be temporarily out of service in the winter flight schedule. In winter, short and medium-haul flights will only be carried out with the most efficient Airbus A220 aircraft and the Airbus A320 Neo. With the long-haul fleet, too, you look at what the right combination is, Binkert said: “But no decision has been made yet.”
Reduced winter flight hours
Swiss had to significantly reduce winter flight hours due to travel restrictions and quarantine regulations. Currently, the airline assumes that it will be able to offer a maximum of 25 percent of the previous year’s capacity.
Parent company Lufthansa ran an adjusted deficit of € 4.16 billion operationally in the first nine months. The end result was a huge loss of 5.58 billion Swiss francs. In addition to the collapse in demand, the depreciation of aircraft such as the retirement of the giant A380 drove the result even deeper into the basement.
In addition, Lufthansa opted for hedging the price of fuel, which resulted in a total of 764 million euros. The turnover of the largest airline in Europe fell by 60 percent to 11 billion euros. (pbe / SDA)
