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Swiss trims its wings but fails to impress critics

The job losses will affect cabin crew, ground personnel and pilots

(Keystone)

Switzerland's national carrier "Swiss" is set to reduce its fleet, cut back its flight plan and axe 300 jobs - 140 of them among pilots.

But analysts say the measures designed to save the airline SFr400 million ($275 million) do not go far enough and will not guarantee the company's future.

Swiss chairman, Peter Bouw, told a media conference on Tuesday that the company's third-quarter results were better than projected, but showed that Swiss still needed to improve overall profitability.

"We have to adapt the fleet to the new market environment, lower the costs substantially, improve the productivity and improve the quality of our service to our customers," Bouw told swissinfo.

The company's president and CEO, André Dosé, said that while 300 jobs had to be cut, another 200 could be created through the operational changes.

"The main measures are we [cut] our fleet by a total of eight aircraft - three in the charter business and five in the scheduled services," he said. "Unfortunately we have to reduce jobs by roughly 300. On the other hand we build up the technical department and IT services by a total of 200."

Swiss also announced that because not all pilots had accepted a new labour contract it would continue to deal separately with former Crossair and ex-Swissair pilots.

While the government welcomed the announcement of a new strategy, aviation experts and unions condemned it.

Condemnation

Pilots from the former airline Crossair, which was subsumed into Swiss, were "furious" about plans to axe 140 cockpit jobs, a spokesman said. He said the pilots' union would "immediately appeal" any redundancies announced.

The union representing cabin personnel, Kapers, said it feared the measures were just the beginning and would be followed by further cuts.

Analysts also predicted that Swiss would have to scale back its operations further if it was to achieve its declared goals of breaking even by 2003 and turning a profit in 2004.

"The management at Swiss are not yet rid of the old mindset; they want to retain everything and lose no jobs at all, if possible," Christoph Bohli, an analyst at Bank Sarasin told swissinfo.

"But there must be further cuts - there is no way round it," Bohli added. "Swiss is pursuing a gradual cutback, step by step, instead of doing it all at once."

Aviation expert Sepp Moser said Swiss was not tackling its problems in the right way. "The cuts are not sufficiently deep and they are not in the right place," Moser said.

Unprofitable

Instead of making savings in the short-haul sector, Swiss needed to look at cutting back its long-haul operations, which were often unprofitable, he told swissinfo.

He said the cuts would not make it any easier for Swiss to join the Oneworld airline alliance - one of its key goals. British Airways and other major carriers would still consider Swiss to be oversized.

"The strategy is wrong because it is based on a dogma... pretending that it is possible to sustain a vast intercontinental network based in Switzerland, and this is simply not true," Moser said.

But Bouw rejected this argument: "When people say the airline is too big for the country I say the country is too small for the airline."

On Tuesday Swiss posted a net loss of SFr135 million for the third quarter of the year on total operating revenue of SFr1.38 billion.

The deficit includes special depreciation of SFr60 million on the aircraft fleet and SFr15 million on non-recurring costs associated with the establishment of the company earlier this year.

Bouw said economic conditions would determine how well the airline fared in the coming months.

"We think that with the measure taken we are going to be very close to the set goal," he told swissinfo. "That's the assessment that we can make now with the world economy."

swissinfo, Morven McLean

Swiss

Swiss is cutting 300 jobs.
The airline is reducing its fleet by eight planes.
The cost-cutting programme is designed to save SFr400 million ($275 million).
The company posted a third-quarter loss of SFr135 million.

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