Swissair puts revenue loss at SFr65 million

Swissair already had financial problems before the current crisis Keystone

Swissair said on Thursday that it estimates revenue losses at about SFr65 million ($40.6 million) for the past week. The company said it is now looking at measures needed to improve its financial position, prompting fears of job cuts.

Swissair is now operating a full schedule to all destinations in the United States after last week’s attacks but overall passenger numbers are expected to be lower than usual.

“Our best current estimate of this impact is in the range of 10 to 15 per cent on North Atlantic routes and 10 per cent on other routes,” said a company statement.

It said its board plans to approve a revised restructuring plan in October to take account of the changed environment. It said nothing about possible job cuts. It already announced 1,250 job losses last month as part of attempts to return to profitability.

The airline industry has been badly hit by the crisis with up to 100,000 jobs expected to be lost in the US alone. United Airlines and American Airlines have each announced cuts of 20,000 to their workforces, while Continental says 12,000 employees are to go. The aircraft manufacturer, Boeing, says it will slash up to 30,000 positions.

Financial support issue

In Europe, British Airways has also announced 7,000 job cuts.

On Wednesday, President Bush proposed an emergency bailout plan for the US airline industry to include $5 billion in cash assistance. This was far less than the industry said it needed for it to pull through.

The Swiss president, Moritz Leuenberger said late on Wednesday that the government here wants to see detailed plans on how Swissair plans to restore profits before the government decides whether to grant it financial support.

“I want to know how Swissair will restructure, what strategy it has, what concept it has to return to the black before the Swiss government comes in with any large scale financial assistance to cover what were evidently grave mistakes made in the past.”

Swissair had a SFr2.9 billion loss in 2000 due in large part to a disastrous expansion strategy that saw it invest in numerous loss making regional airlines. It has now changed policy but is still struggling to turn itself around.

Swissair shares dropped almost 10 per cent during Thursday’s trading to close at SFr45. The share price has virtually halved in the last week after losing two thirds of its value since January when the depth of its losses began to emerge.

swissinfo with agencies