Switzerland's national airline, Swiss, has posted a net loss of SFr980 million ($725 million) for its start-up year of 2002.This content was published on March 14, 2003 - 09:44
Swiss International Air Lines said on Friday it was hit by SFr322 million in set-up costs and other one-off items, after taking off on April 1.
The airline has struggled to become profitable amid a stalling global economy and fierce competition from cut-price carriers.
In a statement released on Friday, Swiss said it would not comment further on the loss until its annual results were published in detail on March 25.
"The overall annual results were better than originally envisaged," the statement said.
"The bottom-line result was adversely affected by exceptional expenditure totalling SFr322 million," the statement added.
"Net of these non-recurring items, the loss for this year amounted to SFr658 million."
In early trading in Zurich, Swiss stock was up by as much as 12.5 per cent at SFr4.50.
Despite a positive reaction from markets, analysts expressed disappointment with the result, warning that losses in 2003 could be as high as SFr500 million
Patrik Schwendimann, from the Zurich Cantonal Bank told swissinfo overcapacity in the airline industry would make it near impossible to fill aircraft seats.
"Above all the fourth quarter was really disappointing," Schwendimann says. "The net loss in the fourth quarter was SFr398 million.
"Even excluding the start up costs and the write downs the loss was SFr301 million...I had expected SFr153 (million)," he added.
When the airline was launched last year in the wake of the Swissair collapse in 2001, CEO André Dosé said he hoped to limit its first-year losses to SFr1.1 billion.
The airline, which is funded by both private investors, Swiss cantons and the federal government, is under mounting pressure to turn a profit by 2004.
Last month, Swiss announced cuts to its fleet of aircraft and hundreds of job losses.
"In view of the continuing economic recession and the radical crisis afflicting the world airline industry, Swiss took action as early as the end of February to modify its route network and downsize its aircraft fleet," Friday's statement said.
Earlier this month Swiss chairman Pieter Bouw warned that the airline still had to cut costs by ten to 15 per cent to be competitive on the international market.
Friday's result confirms that Swiss lost the equivalent of more than SFr3.5 million per day in its first nine months of operation.
swissinfo with agencies
Swiss has posted a net loss of SFr980 million ($727 million) for 2002.
Swiss formally started operations on April 1 2002, and anticipated a first-year loss of SFr1.1 billion
The airline said it had faced SFr322 million in set-up costs and other one-off items.
The stock market pushed shares in Swiss up by more than 12.5 per cent to SFr4.50 on Friday.
Analysts expressed disappointment with the result, and warned of a loss in 2003 of up to SFr500 million.
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