To fly or not to fly

Monday's decision will be make or break time for the Swiss aviation industry Keystone

Swissair is set to dominate the headlines again this week as the country waits anxiously for news on a rescue plan dubbed "Operation Phoenix".

Last week the Swiss government said it was willing to help rescue the national airline industry in the wake of the spectacular collapse of the Swissair Group, but made it clear that it would only do so if the private sector provided a large chunk of the funds required.

Officials from the federal government, local authorities, banks and business leaders were continuing talks behind closed doors to try and hammer out a plan ahead of a government imposed deadline this Monday.

The race is on to find some SFr4 billion to finance the ambitious rescue plan, with tens of thousands of jobs at Swissair and related export and tourism businesses riding on the outcome.

Under the plan, Crossair would take over two-thirds of the Swissair fleet in two stages – its European flights on October 28 and its intercontinental service by the end of March.

This scenario envisages Crossair needing to raise SFr2.2 billion in fresh capital while up to another SFr1.7 billion is needed to sustain Swissair’s long distance flights until the end of March, while hundreds of millions more francs could be needed to finance thousands of layoffs.

Ciba figures

Elsewhere, Ciba Specialty Chemicals will be releasing its third quarter sales figures on Tuesday.

The Basel-based group scaled back its market growth forecast in August and announced more job cuts in the face of the global economic slowdown while also reporting a three per cent rise in first-half net profits to SFr222 million ($133.5 million).

Europe’s largest electrical engineering group, ABB, will reveal its third quarter sales numbers on Wednesday.

Only last week the Swiss-Swedish group’s chief executive. Jörgen Centerman, said he did not expect a big impact on business from a drop in consumer confidence following the attacks in the United States and retaliatory strikes.

However, some brokers, such as JP Morgan are expecting a downturn in the profit outlook for ABB following this Wednesday’s numbers.

Adecco reports

Also reporting third quarter numbers on Wednesday will the world’s largest employment agency Adecco.

The Swiss-based company’s chief executive, John Bowmer, said on 12 October that he was confident of an upturn in the US employment services industry by the second half of next year.

Almost 30 per cent of Adecco’s revenues are derived from the United States.

Meanwhile, the world’s largest agrochemicals group, Syngenta will uncover its third quarter sales on Thursday.

The company, which was formed by merging the agribusinesses of Novartis and AstraZeneca last year, saw continued weakness in the farm sector over the first half of 2001 but also believes that its aggressive cost-cutting programme was shoring up operating margins.

by Tom O’Brien