Swiss slaps service charge on customers

Swiss passengers face higher prices Keystone

Switzerland’s national airline is to cease paying travel agency commissions and will introduce a new service fee on most tickets from the start of next year.

This content was published on June 30, 2004

Swiss said the new system would provide greater cost transparency and help the carrier to remain competitive.

The airline said it would no longer pay commissions to travel agents who book customers on their flights.

"The combination of over-capacity and the emergence of low-cost carriers have altered the competitive environment and compelled airlines to reduce costs, especially on the distribution front," Swiss said in a statement released on Tuesday.

The carrier is proposing that travel agencies make up for the lost revenue by levying their own service charge on all bookings made.

Prices rise

In a parallel move, the airline said it would introduce the same charge on most seats sold directly via its website, call centres and ticket offices.

The additional fee will vary according to the type of flight as well as the method of booking. Online bookings will incur an extra charge of SFr25 ($19.80), while long-haul flights booked through a travel agency will cost an additional SFr80.

But the airline said it would not levy the charge on some of its lowest-priced fares.

“In order to compete with low-cost carriers, Swiss will continue to sell web specials and European fares in the two lowest booking classes without applying a service charge.”

Saving money

Swiss spokesman Dominik Werner refused to disclose how much the airline – which has yet to make a profit after more than two years in the air - expected to save following the introduction of the new charges.

The cash-strapped carrier said only that it had announced plans to launch the new system a year ago. It added that travel agencies had been consulted.

But the Swiss Federation of Travel Agencies said it had had no real say in the matter, while an association of travel agents in western Switzerland accused the airline of taking unfair advantage of its dominant market position.

"Swiss is setting a precedent for other airlines," said Philippe Haussauer, director of a group of some 200 travel agencies.

Business class

In a separate move, Swiss announced on Wednesday it planned to launch an all-business class service to the United States.

The airline intends to use a 56-seat Boeing business jet for flights between Zurich and New York’s Newark airport six times a week from mid-January 2005.

At the same time Swiss will abandon its current Airbus A330 operations between Zurich and Newark.

But it will continue to offer services in three-class configuration (economy, business and first class) from Zurich and Geneva to New York's JFK airport.

Swiss will become the second European carrier after the German airline, Lufthansa, to introduce an exclusive business class service.

Profit warning

Last week Swiss disclosed that it may not break even in 2004 and that it was examining measures to further reduce operating costs.

It is currently negotiating with banks over an additional multi-million franc credit facility to shore up its finances.

Over the past two years Swiss has made drastic cuts to its network and shed a third of its workforce.

Earlier this month the airline announced it was abandoning negotiations to join the British Airways-dominated Oneworld alliance.

On Thursday, new Chief Executive Officer Christoph Franz officially takes up his post following the resignation of André Dosé, who was forced to step down after he became the subject of an investigation into a plane crash.

swissinfo, Urs Geiser

In brief

From January Swiss will stop paying travel agent commissions.

The airline is proposing that travel agencies make up for the lost revenue by levying their own service charge for all bookings made.

Swiss says the new system will help cut costs and is in line with similar moves by other European carriers.

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