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Swiss applies the brakes

Switzerland's national carrier "swiss" has imposed a recruitment freeze and is reviewing its costs amid warnings that it will miss its targets for next year.

The management of the airline has rejected the first budget proposal for 2003, in an attempt to stick to its aim of breaking even by the end of next year.

A company statement said that the breakeven objective was “ambitious” in the current economic climate, which was affecting the airline business in particular.

Swiss repeated that it was performing better than the targets set in its start-up business plan and was pleased with steadily increasing load factors.

No additional aircraft

The statement added that CEO André Dosé felt staff costs should not be allowed to increase because Swiss would not be operating any additional aircraft next year.

Speaking on Wednesday at the Travel Trade Workshop in Montreux, Dosé admitted that the airline faced a difficult year in 2003.

“We still have a lot of work to do, but the passengers are out there and Swiss will break even,” he insisted.

Analyst Patrik Schwendimann at the cantonal bank of Zurich told swissinfo that the news came as no real surprise.

“Everybody knew from the beginning that to reach this year’s target would not be that difficult. But to arrive at break even next year is a much bigger challenge,” he said.

“Still problems”

The company said in September that it expected this year’s loss to be less than originally planned but admitted that there were “still problems” at the airline, which was formed around the regional carrier Crossair after last year’s collapse of Swissair.

Critics of the airline have said that with a fleet of 136 aircraft, Swiss is too large. Talks with British Airways, a founding member of the OneWorld alliance, have stalled over difficulties concerning anti-trust clearance from European authorities.

And the company still has no agreement with former Crossair pilots over their collective contract.

“It is certainly true that the fleet is rather big. The future size will be determined by the company’s economic success and the cooperation with the future alliance. But it’s still probably too early to say exactly what the right size is,” analyst Schwendimann commented.

Swiss made a first-half loss of SFr447 million ($300.17 million) on sales of SFr1.754 billion. The figures were better than forecast in the business plan and prompted the company to report that it was “on target”.

swissinfo with agencies

Swiss is sticking to its breakeven objective for 2003, even though its own figures suggest the target is too ambitious.
It has imposed a recruitment freeze and is trying to cut costs in response.
Critics say the airline is too large, with a fleet of 136 aircraft.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR