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Swissair share price continues to fall

Swissair's share price has nosedived by more than 15 per cent since the company announced losses and job cuts

(Keystone)

Swissair Group's share price fell by more than seven per cent on Friday to SFr92.55 ($55.35). The drop comes after its shares plummeted by almost nine per cent on Thursday as the company announced first half losses and job cuts.

Analysts at Zurich Cantonal Bank said in a study that the risks for investors were far higher than opportunities. They also noted the Swissair Group's "extremely high" net debt of almost SFr15 billion.

The company on Thursday announced plans to cut 1,250 jobs and sell some of its major assets after reporting a first half loss of SFr234 million ($140 million) compared with a profit of SFr3 million during the same period a year earlier.

The group, which reported a full year loss of SFr2.9 billion last year, said it would reduce its worldwide management staff by five per cent or 300 by the end of the year. The group employs 72,450 people worldwide.

A statement said it had signed a memorandum of understanding to sell off a majority stake in its ground handling business, Swissport. It is also planning to sell part or all of its airport retail business, Nuance.

In a related development, the Polish airline LOT, in which the Swissair Group has a 37.6 per cent stake, announced on Friday that it would cut hundreds of jobs as of next year in a bid to reduce its operating costs by 20 per cent.

A LOT spokesman gave no exact figure but said about 300 people would take early retirement.

LOT accounted for a loss of SFr45 million in the Swissair Group's first half accounts published on Thursday.

The spokesman blamed the poor state of the company's finances on the slowing down of the economies of Poland, Germany and the United States.

LOT, which made a profit last year of SFr19.9 million and carried 2.6 million passengers, is a member of the Qualiflyer Group created in 1998.

swissinfo with agencies


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