All eyes on Swissair

Chairman Mario Corti is trying to return Swissair to profit Keystone Archive

Business this week is likely to be dominated by the first half figures of the troubled aviation group, Swissair. The country's second biggest bank, Credit Suisse, also reports first-half earnings this week.

Analysts will be combing the figures on Thursday, searching for signs that Swissair is pulling out of its turbulent descent that saw it wrack up losses of SFr2.9 billion ($1.74 billion) last year.

According to media reports, Swissair is likely to post losses of around SFr200-220 million.

There have been some signs recently that things are beginning to look up. The company’s chairman, Mario Corti, has managed to end the cash drain that saw millions lost in subsidies to the money-losing French airlines. Swissair has also bought out of an obligation to raise its stake in the Belgian carrier, Sabena.

With the sale of assets such as the Swissotel chain, there are hopes that the figures will soon look a little better.

The aviation group’s shares have fought back strongly in recent weeks but many analysts say Swissair remains a high-risk investment. It’s a difficult time for the airline industry with over-capacity and high fuel costs eating into margins.

Lufthansa and British Airways have both issued cautions about this year’s results. The same will apply to Swissair.

Credit Suisse issues its first-half results on Wednesday. The bank’s performance will be compared with that of rival UBS, which surprised analysts last week with better than expected figures.

Second-quarter net income at UBS fell 26 per cent but most analysts had expected a 40 per cent decline. Credit Suisse may well surprise the markets too as lower interest rates help the banks to improve their margins.

Other companies reporting this week include Syngenta and the chocolate manufacturer, Lindt and Spruengli.

By Michael Hollingdale