Swiss set for smaller loss
Switzerland’s national carrier, Swiss, is set for an operating loss this year of up to SFr200 million ($168 million).
Its chief executive, Christoph Franz, said record-high oil prices have eroded some of the firm’s cost savings.
“In comparison with the previous year alone, we will be able to improve the operative result by about SFr300 to SFr400 million”, said Franz in an interview with the Rundschau magazine of Aeropers, the Swiss pilot’s union.
Franz added that record-high oil prices have eaten away some the company’s cost savings.
The chief executive said that more expensive oil caused significantly more than SFr100 million in extra costs.
In June Swiss warned it would miss its target of breaking even at the operating level, after an operating loss in 2003 of SFr498 million.
Fuel hedges
Earlier this year Swiss sold its fuel hedges to boost much-needed short-term liquidity but then raised ticket prices to fight rising fuel prices.
Franz said the fuel surcharge on tickets only covered at best a third of the extra cost and the remainder could not be passed on to clients.
His comments came ahead of November 16 when Swiss is due to announce its third-quarter results.
Last month Swiss secured a credit facility of SFr325 million ending months of negotiations with an international banking syndicate.
The company announced in August that it posted its first quarterly net profit raising hopes of a sustainable recovery.
Swiss aims to complete its turnaround next year but some analysts say it is too large for its small market and it lacks a clear strategy.
The company has axed more than 3,000 jobs over the past two years. It also reduced its fleet and cut back its route networks.
swissinfo with agencies
The national airline, Swiss, is set for a loss of up to SFr200 million this year.
Swiss CEO Christoph Franz blamed high oil prices for the expected result.
Third-quarter results are due on November 16.
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