Air Transport World

Swiss miss: The airline miscalculated badly when it set out to replicate the former Swissair schedule; now it is scaling back and pinning its hopes on more cost cuts and a new low-cost Regional operation. (Profile).(Swiss International Air Lines)

Swiss International Air Lines continues to ply a turbulent flightpath more than a year after being both is the quasi-successor to insolvent Swissau. While fear of SARS, a lethargic economy and fallout from the Iraq conflict also batter other cartiers issue here go much deeper. With much of he airline industry and the global economy to a tail spin, this is no time for playing catchup, but that is what Swiss has been doing since it officially replaced. Crossiar/Swiss an at the end of March 2002.

To data its strategy appears to have been as full of holes as the proverbial Swiss cheese. Rather than beginning small in the face of the crushing market downturn. Swiss attempted to replicate most of the swissau network from startup. But the environment bad changed and the world did not need another high-cost network airline dependent on booming business traffic and a strong global economy to make money.

Although Swiss actually bettered its forecast of a loss of Sfrl 1 billion in 2002 by Sfr30 million it no longer envisions breaking even in 2003 and does not anticipate a profits before 2005. It is cutting routes, planes and people as it tries to right-size itself to the diminished opportunities available today.

"We're in a struggle to survive, says President and CFO Andre Dose, "but it's not hopeless.

At the carrier annual general meeting in May, Chairman Pieter Bouw hedged at widespread conjecture about a possible tie-in with Lufthansa: "We are open to every thing, are holding talks, and intend to play an important role in the [industry's restructuring] process. Lufthansa is withholding comment. Swiss confirmed only that it is speaking with I H about general industry issues.

Swiss's latest steps, announced ahead of the meeting, include the intent to cut a further 10% from the Sfr 1 billion labor budget and the decision to hive off its Regional airline operation (mostly the former Crossair) into a standalone subsidiary with a separate board of director and executive management team. …

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