Mavroudis Global Transportation & Logistics

Airline SWISS sees heavy losses and an uncertain future

August 6, 2021

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The ongoing Covid-19 crisis, and the emergence of the Delta variant around the world have clipped the wings of Switzerland’s flagship carrier this year, as passenger numbers have nosedived.

“We have posted a loss of almost Sfr 400 million in the first half of the year. That will slightly increase for the full year, but we’re hoping now in the third and the fourth quarter to get back to more normal figures, and keep that additional loss within limits,” Chief Financial Officer (CFO) Markus Binkert told Xinhua in an interview.

Total first-half revenues amounted to 659.3 million Swiss francs, a 43.5 percent drop from the year before, the company announced in a press release.

The airline operator also said booking levels were still low, and passenger numbers some two-thirds below their prior-year equivalent.

In the first six months of 2021, SWISS planes transported around a million travelers on its routes, 67.5 percent fewer than during the same period a year earlier. Nevertheless, it said that two-thirds of its aircraft fleet was now back in use.

By the end of June, SWISS had restored service to over 90 percent of the destinations it served in pre-coronavirus times, albeit with fewer frequencies.

However, Binkert warned that the summer travel season had been disappointing, and that the situation would remain extremely tense.

“We were of course initially hoping that recovery would come much sooner, and fast; we hoped for Easter, and then for the summer period. This dynamic development of the pandemic is not helpful for our industry.”

On the bright side, Binkert said that extremely low passenger numbers had been partially offset by still-strong demand for air cargo services.

“The cargo business is of course playing a vital role right now,” he emphasized. “We’re flying internationally, beyond Europe, mainly thanks to the very good cargo business.”

“I am happy that cargo is so powerful right now, but we’re looking forward to getting back to what we are: a passenger airline primarily, with the cargo business playing an important but additional role – as it did prior to the pandemic.”

SWISS, a subsidiary of Lufthansa, also said in the press release it had embarked on a comprehensive restructuring and transformation process, following the company’s announcement in May that it would cut its fleet by 15 per cent, and its workforce by up to 780 employees. Last year, the airline received loan guarantees from the Swiss government worth 1.275 billion Swiss francs.

“We have had a very important cargo business in China,” Binkert said. “Initially it was more medical goods, now it’s commercial goods.”

“Of course, we cannot wait until it opens up as China is an absolutely vital market for us at SWISS,” he stressed.

SWISS resumed its passenger flights to China in July 2020, and currently serves Shanghai once a week, while operating three to four cargo flights a week.

It also resumed its Hong Kong operations in June last year, with three weekly flights to the destination. However, the company said it would not be flying to Beijing until further notice.

“Where we stand right now, with posting a significant loss in the first half year, we are not really looking into new destinations. The key will be to rebuild, as well as possible, what we had prior to the crisis. That will be the initial focus,” Binkert underlined.

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