Lufthansa sees silver lining of Swiss cloud
Swiss International Airlines has reported a third-quarter net profit of SFr8 million ($6 million). But the first nine months of 2005 show a loss of SFr81 million.
Lufthansa, which bought Swiss in March, was undeterred by the news, saying the recent positive results showed that Swiss was making headway with its restructuring.
Swiss said on Thursday in a statement that it was continuing to implement the changes announced in January 2005 – including reducing its fleet by 11 aircraft – to provide the company with a sustainable competitive position.
However high fuel prices, persistent fare erosion and restructuring costs have hindered the turnaround process, it said.
Swiss reported a net loss of SFr81 million for the first nine months of 2005, substantially higher than the SFr17 million for the corresponding period in 2004.
Net profit for the third-quarter period – traditionally the strongest in traffic terms – amounted to SFr8 million. In 2004 the same period figure was SFr16 million.
Swiss expects to post a significant net loss in the fourth quarter of 2005 because the period is normally slow.
Expectations met
Despite these figures, Lufthansa head Wolfgang Mayrhuber said on Thursday that the integration of Swiss into the German carrier was running according to plan.
“Our expectations have been met across the board,” he said, adding that customers were already benefiting from better flight connections at the hubs of Frankfurt, Munich and Zurich.
The changes came into force at the start of the 2005/06 winter schedules with the harmonisation and expansion of services between Switzerland and Germany.
Swiss now offers 563 weekly connections between the two countries throughout the day – 241 more than in the 2005 summer schedules, said Swiss.
The company also improved the punctuality of its flight operations over the same period. It was sixth in September’s punctuality rankings of European airlines, a significant improvement on its 24th position in January.
Swiss has struggled since it was launched following the collapse of national carrier Swissair in 2001.
The airline has since implemented a string of restructuring programmes and plans to cut up to 1,000 jobs as well as reduce its fleet.
swissinfo with agencies
Former national carrier Swissair collapsed in 2001.
With government backing, Swiss was launched on March 31, 2002.
In March 2005 the airline announced its takeover by Lufthansa for €279 million (SFr430 million).
After receiving antitrust clearance in July, the German airline increased its stake to 49 per cent.
It will increase its stake to 100 per cent once air traffic rights are secured. This is expected to be at the end of 2006 at the earliest.
Swiss has reported a net loss of SFr81 million for the first nine months of 2005.
However, net profit for the third-quarter period amounted to SFr8 million.
Swiss carried around 7.33 million passengers in the first nine months of 2005, a year-on-year increase of 4.6 per cent.
The company posted a net loss of SFr980 million in 2002, SFr687 million in 2003 and SFr140 million in 2004.
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