The airline Swiss has reported a net loss of SFr89 million ($70.6 million) for the first half, much worse than for the comparable period last year.This content was published on August 25, 2005 - 09:03
Swiss also announced that it would reduce its short-haul fleet from 35 to 24 aircraft and that chairman Pieter Bouw would step down in September.
The net loss compares with a loss of SFr33 million for the first half last year, with the company blaming currency fluctuations in particular for the deterioration of its financial result.
Swiss International Airlines added that the steep rise in fuel costs eroded an additional SFr104 million from operating activities compared with the first six months of 2004.
The overall loss before interest and taxes and before restructuring costs narrowed to SFr9 million from SFr19 million, helped by cost cuts and one-off income, Swiss said.
Swiss chief executive Christoph Franz said the airliner had made "further substantial progress in the first six months but step increases in fuel costs and continuing fare erosion had become major challenges for the entire industry".
He added that the bottom line would have been worse had Swiss not taken action to cut its costs.
While the airline's seat load factor – a key industry benchmark – rose to a respectable 85.4 per cent in July, with business picking up on both intercontinental and European routes, the carrier is still struggling to turn a profit.
In a statement, Swiss said it was also streamlining its fleet of short-haul aircraft. It would focus on Airbus 320 and Avro RJ (Jumbolino) planes from the start of the 2006 summer schedule gradually withdrawing its Embraer 145 aicraft by the end of the coming winter and no longer operating its Saab 2000 fleet.
Swiss, which earlier this year was taken over by Germany's Lufthansa in a deal worth up to €310 million, did not put a price tag on its plans.
More jobs to go
The company has shed thousands of jobs and cut its fleet and route network but has said that more jobs will have to go in order to return to profitability.
In a related development, chairman Pieter Bouw is to step down with four other board members on September 22. Lawyer Rolf Jetzer has been designated to succeed Bouw
As announced in May, the board is to be resized from eight to five members as part of the company's acquisition by Lufthansa.
swissinfo with agencies
Officially launched on March 31, 2002 Swiss initially had a fleet of 133 aicraft and employed 10,000 people.
The company posted a net loss of SFr980 million in 2002, SFr687 million in 2003 and SFr140 million in 2004.
After several phases of restructuring, Swiss has been trimmed to a company with 82 aircraft and about 6,500 full-time employees.
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