Swiss farms out ground operations

Swiss wants to focus on staying airborne Keystone

Switzerland’s national airline, Swiss, is to subcontract its ground services as part of cost cutting measures aimed at keeping the carrier airborne.

The cargo firm Swissport will immediately take over ground operations at six hubs, including Swiss’s home base, Zurich.

The move comes just days after the airline struck a deal with unions over pay and conditions for its ground staff.

The airline said on Thursday that it would hand over all ground services operations – from checking in passengers to handling luggage – to Swissport within 12 months. By then, Swiss expects to serve 71 destinations worldwide.

Swissport will immediately assume responsibility for ground operations at Zurich, Johannesburg, Nice, Paris, Madrid and Los Angeles.

Swissport spokesman Stephan Beerli said most of the airline’s ground staff would be employed by Swissport, on the same terms. Swiss currently employs 320 ground staff.

Redundancies

Beerli added that it was not clear exactly how many employees would lose their jobs, but that those affected would be entitled to the social plan, or redundancy package, agreed between Swiss and the unions.

Swiss said the agreement would enable it to make “sizeable cost savings and focus more clearly on its core flight operations”.

It did not disclose how much money it would save, but the airline’s ground operations cost about SFr400 million a year. About half of that goes to Swissport, which already handles much of Swiss’s ground services.

The cargo firm used to be owned by Swissair’s parent company, SAirGroup, but was sold to British investors when the carrier went bust.

In recent weeks, Swiss has concluded agreements with unions representing all of its staff. Last month, it struck deals with cabin crew and pilots’ unions over major restructuring measures, and on Tuesday concluded a deal with ground staff.

Credit

The agreements were seen as vital if their airline was to secure more funding – it needs a SFr500 million credit line from banks to stay airborne – or to attract a partner.

Speculation that Germany’s Lufthansa would buy a stake in Swiss, or even take over the carrier, have been circulating for weeks. But on Thursday Swiss’s share price tumbled by more than ten per cent after a German newspaper said Lufthansa was not interested in making a direct investment.

Swiss stock had gained some 40 per cent in the past two weeks on reports that Lufthansa would stump up at least half of the SFr500 million Swiss says it needs to survive.

The paper said Lufthansa was waiting for Swiss to “shrink further” than it is doing under it current restructuring plan.

Last month, Swiss said it would cut its destinations by almost a quarter to 71 by October, and that some 3,000 jobs would go.

swissinfo with agencies

Swiss brief

Swiss is to hand over all ground services operations to Swissport within 12 months.

Swissport will immediately assume responsibility for ground operations at Zurich, Johannesburg, Nice, Paris, Madrid and Los Angeles.

Most of the airline’s ground staff will be employed by Swissport, but there will be job losses.