A top Swiss International Air Lines official has admitted strategic errors in the carrier’s expansion plans at Geneva airport. But Lorenzo Stoll, head of says his airline will not be quitting Geneva, despite reports of a large financial hole.
“We shouldn’t hide the fact that we wanted to go too quickly,” Stoll told the daily newspaper Le Temps in an interview on Monday. He is in charge of operations in French-speaking Switzerland for the airline known as Swiss, which is owned by the Lufthansa Group.
The airline official admitted that Swiss had underestimated the difficulties of trying to compete with the low-cost carrier easyJet, which dominates Geneva Airport with 43% of the airline market, ahead of Swiss (15%) and British Airways (4.7%). By comparison, Swiss accounts for 54% of all passengers at Zurich Airport.
Stoll said Swiss had "disproportionately" extended its network in Geneva, growing from 13 to 42 routes in a year, but without adding any new planes. The carrier must now restructure and reduce the offer from 40 to 30 destinations, while increasing the frequency on some routes.
“We adopted a tactic of opposition and copying the low-cost approach. But this attitude is over. We are redefining our commercial strategy. Swiss is not a low-cost brand,” he said.
According to an article in the Le Matin Dimanche newspaper on August 28, the current Swiss operation in Geneva loses the company around CHF30 million ($30.6 million) a year.
But Stoll said the idea of "withdrawing planes or even leaving Geneva was not foreseeable" for the Lufthansa Group.
Rumours have been circulating over about the future of Swiss at Geneva Airport. There have been media reports that the carrier with the Swiss flag logo, which has been owned by the Lufthansa Group for the past ten years, could be replaced by planes from the group’s low-cost airline, Eurowings, in order to compete with easyJet.
Stoll left the possibility open, saying that “what may change is the company operating from this platform”.
A feasibility study is underway, he added. “But just because a Plan B is being elaborated doesn’t mean it’ll be implemented.”
Swiss launched an initiative dubbed "Plan Calvin" in 2013 to redeploy at Geneva Airport. It currently has ten planes based at the airport, including eight dedicated to low-cost flights, and 232 staff.
“But the context has changed since then,” said Stoll, who highlighted the difficulties of the strong Swiss franc, Russia’s political and economic crisis, the British vote to leave the European Union and terrorist attacks in Europe. Three-quarters of his airline’s sales reportedly come from the Swiss, British and Russian markets.
“The combination of these contrary winds has led us to readjust our plans,” he declared.
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