Swiss unveils budget fare structure for Europe

Swiss International Airlines departing from Zurich Airport Keystone

Switzerland’s national airline, Swiss, has launched a new range of cut-price fares on its European network - its latest salvo against low-cost carriers.

This content was published on January 8, 2004 minutes

One-way flights to London start from as low as SFr54 ($38.20), while tickets to Berlin and Paris are selling for less than SFr50.

The new fare structure is a key element in the struggling airline’s recovery strategy, and follows a global trend by large network carriers who are increasingly offering no-frills services.

However, Thursday’s announcement offered few clues as to whether Swiss was any closer to reaching an alliance deal with either Germany’s Lufthansa or British Airways.

“It’s fair to say the board is evaluating at least two options,” said William Meaney, the airline’s commercial director.

Analysts believe joining forces with a larger partner would help Swiss climb out of its current financial troubles.

The carrier is believed to be losing more than SFr1 million per day, as it battles to slash costs and generate fresh revenue.

Faced with the threat of insolvency, Swiss recently embarked on an aggressive restructuring programme, which will see it cut staff and its fleet by a third.

Book early

Meaney told swissinfo that the new ticketing concept – dubbed “Swiss in Europe” – was designed to recapture passengers who have drifted to low-cost carriers in recent years.

“Effectively the low-cost carriers have taken both leisure, and now increasingly the business passengers, from network carriers like ourselves” said Meaney.

In order to fully benefit from the cheap tickets, passengers will need to book early and be flexible about their travel times.

Swiss hopes to encourage passengers to purchase tickets on the Internet, where fares will be at least SFr25 cheaper than those booked using the carrier’s call centres or retail outlets.

Meaney said Swiss was banking on 12 per cent of all bookings being carried out online within 12 months.

No “free” meals

Swiss, which started operating in April 2002 as a premium carrier, will do away with “free” onboard meals within Europe.

Passengers will, however, have the option to buy food, drinks and snacks.

Meaney said the new European product was still a step up from low-cost airlines, because Swiss would continue to provide faster check-in service, higher flight frequencies, frequent-flyer points and access to premium airports, rather than regional airstrips.

“We’re not looking for a head-on competition with low-cost carriers, because we think our product is still different,” said Meaney.

Swiss will also revamp its ticketing strategies for business-class fares.

“We have passengers that fly first class on long haul with us, but then fly in economy in Europe,” he added.

“But if the business class [ticket] gives them full flexibility for a fare that is somewhere lower than it is today, our research shows people will come back to business class,” he added.

“If that doesn’t work, perhaps over time business class will go away. Just like first class in Europe went away.”

More customer choice

Alexander Arafa, Swiss’s product development chief, told swissinfo that the airline had little choice but to charge passengers for on-board meals.

“The alternative would have been to take food and beverages off the menu altogether, because that’s what happened in the US, where American carriers flying for up to four hours don’t offer anything,” said Arafa.

“But we didn’t want to go down that path, so we thought we’d give the choice to the customer.”

Arafa added that the biggest cost associated with on-board meals was the service and handling.

Thursday’s announcement, which was accompanied by a new advertising campaign, appeared to capture the public’s interest.

Swiss’s website struggled to keep up with a surge in visitor numbers, as customers checked out the new offerings.

Other low-cost destinations include Barcelona (from SFr49), Moscow (SFr149) and Rome (SFr74).

Sepp Moser, an aviation journalist, said Swiss was attempting to be two things at once - both a premium and budget carrier.

swissinfo, Jacob Greber in Zurich

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