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Economic headwind pounds Swiss profits

Swiss International Air Lines has reported an operating profit of SFr65 million ($60 million) for the first half of 2009, compared with SFr254 million in the same period last year.

This content was published on July 30, 2009 - 11:03

In a statement on Thursday, the subsidiary of the German carrier, Lufthansa, said the poor result was due to the global economic downturn and corresponding drop in demand, particularly in the premium segment.

Total income from operating activities for the period declined 17 per cent to SFr2.1 billion.

Swiss also said the increase of around 50 per cent in crude oil prices since the beginning of the year also affected the bottom line.

"Although we have been practising rigorous cost management and flexibly adapting our capacity in response to the recent downturn in demand, Swiss cannot escape the present storms in the airline sector, and this is reflected in the broadly break even operating result that we achieved for the second-quarter period," said CEO Harry Hohmeister.

The airline met the decrease in demand in part by reducing frequencies on certain intercontinental routes. The company also reduced the hours of some of its 7,500-strong workforce and encouraged staff to take unpaid leave.

"As soon as the economic recovery begins, we aim to use our strong position to gain a full share in the resulting growth. For the present, though, we have a rocky road ahead," Hohmeister added.

Swiss reported a seat load factor of 75.9 per cent for the first six months of 2009. While that represents a decline of 2.9 percentage points on the same period a year ago, it remained above the European average of 71.7 per cent.

swissinfo.ch

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