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In operational terms, the Swiss airline posted a loss of CHF 414.7 million in the first nine months after a profit of CHF 489.6 million in the same period of the previous year. Sales fell 62 percent to 1.54 billion francs, as announced by Swiss.
The fault lies with the crown pandemic, as a result of which 95% of the fleet was sometimes ashore. It is true that Switzerland was able to gradually increase its range again in the summer months to a greater extent than expected. However, the increase in travel restrictions has slowed the recovery since mid-August.
Various quarantine regulations have paralyzed customers’ desire to travel in recent months. In view of this, “the operating result is in line with our expectations,” said CFO Markus Binkert. In the first nine months, Switzerland still carried a total of 4.3 million passengers. This is about 70% less than in the same period last year. The only positive point was the high demand for goods.
Bookings have dropped dramatically
After all, things resumed in the summer: in the vacation months, the Swiss airline was able to run up to 40 percent of the originally planned flight schedule. “This even slightly exceeded expectations,” wrote Swiss, which managed to contain its loss from the previous quarter.
“However, the increase and continued modification of travel restrictions and quarantine rules have put an end to the emerging recovery since mid-August,” he said. Bookings have dropped dramatically, Binkert said.
By stepping on the money and cost brake, Swiss managed to reduce the outflow of funds. The Swiss continue to lose in the order of 1.5-2 million francs a day, Binkert said in an interview with the AWP news agency: “Despite the extremely difficult market environment, we are on track with regard to bank loans. This does not endanger liquidity “.
“The loss will continue to increase”
Given the recent rise in crown cases around the world and the resulting 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, Switzerland will close the financial year with a negative result ”, reads the statement.
The airline has launched a restructuring program to be able to repay the state-guaranteed Corona bank loan as quickly as possible and ensure competitiveness. Among other things, all non-operational projects and investments will continue to be suspended.
1000 jobs are cut
In addition, Swiss wants to reduce personnel costs through a freeze on hiring, part-time models with wage exemptions and early retirement. “Along with the natural fluctuation, around 1,000 jobs can be cut in this way over the next two years,” he said.
“At this point, no layoffs are planned,” Binkert said. “Whether this is enough will depend on how the aviation can recover. We will probably see it in the spring. “Last year, Swiss had 9,500 employees. Talks are also underway with the social partners for further cost-cutting measures. Swiss did not provide any details.
Furthermore, the 28 aircraft of the old Airbus A320 family would be temporarily taken out of service in the winter flight schedule. In winter, short and medium-haul flights will be operated only with the more efficient Airbus A220 and Airbus A320 Neo. Even with the long-haul fleet you look at what the right mix is, said Binkert: “But no decision has yet been made.”
Reduced winter flight schedule
Switzerland had to significantly reduce the winter flight schedule due to travel restrictions and quarantine regulations. The airline is currently speculating that it will be able to offer up to 25 percent of the previous year’s capacity.
Parent company Lufthansa accumulated an adjusted deficit of 4.16 billion euros operationally in the first nine months. The end result was a huge loss of 5.58 billion francs. In addition to the slump in demand, depreciation of aircraft such as the retirement of the giant A380 took the result even deeper into the basement.
In addition, Lufthansa has been gambling with fuel price hedging, which reaches 764 million euros. The turnover of the largest European airline fell by 60% to 11 billion euros. (pbe / SDA)
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