SWISS continues to post black-ink results

SWISS also reported a black-ink result for the thirdquarter period, posting an operating profit of CHF 47 million. The airfreight business of Swiss WorldCargo continued to show less-than-favourable trends in the third quarter, however, in the current business headwinds. Pressure on yields increased in the third-quarter period, traditionally the strongest in business-volume terms.

The smaller demand for premium-class seating and the corresponding increase in Economy Class business, along with continuing fare erosion, will only partially be reversed by any economic recovery. The lingering industry crisis has further accelerated these trends. Thanks to the actions it has taken, however, especially on the cost side, SWISS has so far kept the effects of the global economic crisis largely under control.

“If we compare ourselves with our competitors, SWISS has achieved a good result,” says Chief Executive Officer Harry Hohmeister. “We’re continuing to work hard on our costs, we’re flexibly adjusting our capacities to changed and changing demand, and we continue to offer our customers an appealing air travel product.

And, in contrast to the general industry trend, we also expect to post black-ink results for 2009 as a whole.” SWISS consistently realigned its capacity to demand – especially on intercontinental services – throughout the first nine months of 2009, including cutting frequencies on a number of routes. Systemwide production for the January-to-September period was 5% below that originally envisaged (and 4% below its prior-year level), with a 3% cut in Europe and a 7% reduction on intercontinental routes.

“In the present continuing crisis, and in the substantially-intensified price wars it has triggered, strict cost management is crucial to our ability to continue to post a black-ink result,” says Chief Financial Officer Marcel Klaus. “We have been well able to do so to date,” he continues. “The challenge now is to make steady further progress that will enable us to maintain and preferably further expand our present market position.”

(c) Centre for Asia Pacific Aviation. Date posted: 30-Oct-09