SWITZERLAND. Swiss International Airlines (SWISS) announced a package of 3,000 job cuts today as the European carrier struggles with its ailing finances.
Shares in the airline, which was launched in March 2002 from the ashes of failed Swissair, were suspended on the Swiss stock exchange at the request of the airline ahead of today’s announcement.
Fierce competition from budget airlines, the SARS outbreak and the Iraq conflict have combined to plunge SWISS into deep trouble as travel demand has fallen away. In first quarter 2003 SWISS generated revenues of CHF 1,044 million (US$791 million) and losses of CHF 200 million (US$152 million) from 2.7 million passengers in the period.
In May, passenger traffic was -21.6% down year-on-year at 855,406. Traffic on European routes was down by -21.6% and by -12.6% on intercontinental routes.
But SWISS said in a statement it is gearing up for a turnaround and is taking action to cut costs: 34 aircraft are to be withdrawn from service; and the carrier is shaking up its usual premium quality into three classes in long haul and two classes in Europe. On European routes SWISS is offering a new flexible Premium Business Class and Economy Class (without food and drinks). Total capacity, in terms of the number of seat-kilometres, is to be cut by -35%. The changes will become effective on the 2003 Winter timetable.
Figures set out in the new business plan provide for a reduction in costs totalling CHF 1.6 billion (US$1.2 billion). SWISS said it is consulting with the unions to find the most “partnerly” solutions. Around 700 cockpit jobs, around 850 cabin jobs and up to 1,500 jobs on the ground are affected.
