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Swiss considers restructuring plans

Where is Swiss flying to next? (Swiss) swiss

Switzerland's national airline, Swiss, has confirmed that it is considering plans to restructure its regional fleet.

This content was published on January 17, 2005 - 10:47

Ahead of a meeting of the company's board of directors on Monday, the company asked the Swiss stock market to suspend trading in its shares until Tuesday.

Swiss declined to go into further detail.

It said in a press release that it had decided to temporarily stop share-trading “to prevent any uncertainty on the capital markets in connection with the... meeting of its board of directors”.

The statement follows weekend media speculation that the national carrier, which took to the skies in 2002, was planning to overhaul its loss-making European fleet.

A number of newspapers reported that the airline had plans to employ the cost model of budget airlines, such as easyJet, in an effort to decrease salaries and increase working hours.

Other reports suggested that the entire regional fleet could be spun off.

Lufthansa denial

In a related development, German airline Lufthansa on Monday denied it was in takeover talks with Swiss.

"There are no talks with Swiss, nor with the airline's shareholders," said a Lufthansa spokeswoman.

The denial came after the SonntagsZeitung reported on Sunday that Lufthansa had contacted some of Swiss's key shareholders in December regarding an alliance.

The Swiss government, which is the largest shareholder with a stake of 20.3 per cent, has made it clear in the past that it would welcome an offer from Lufthansa.

Last year Swiss backed out of plans to join the Oneworld alliance, which is dominated by British Airways and American Airlines.

Filling seats

Last week Swiss announced that it had increased its seat-load factor by 2.5 percentage points in 2004 to 74.9 per cent.

In August last year, the ailing carrier's fortunes seemed to have turned around when it posted its first quarterly profit.

In the second quarter of 2004, net profit was SFr45 million ($36.31 million).

Four months ago Swiss secured a long sought-after credit facility of SFr325 million.

The airline had been negotiating with a consortium of Swiss and international banks for well over a year.

Shares in Swiss closed on Friday at SFr9.40, down from SFr13.75 a year ago.

swissinfo with agencies

In brief

Swiss has asked Switzerland's stock exchange to suspend trading in its shares until midday on Tuesday.

The company's board of directors is meeting on Monday to discuss restructuring its regional fleet of aircraft.

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Key facts

Swiss increased its seat-load factor in 2004 by 2.5 percentage points to 74.9 per cent.
Seat-load factor shows the number of paying passengers as a proportion of available seats.
Intercontinental flights had a seat-load factor of 81.3 per cent.
In Europe, the seat-load factor was 60.8 per cent.
The airline had 9.2 million passengers in 2004.

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