Swiss International Air Lines (Zurich) reported an operating profit of $77 million for the first half of 2013 and issued the following statement:

SWISS achieved an operating profit of CHF 72 million ($77.7 million) for the first six months of 2013, an 18% improvement on the same period last year. Total income from operating activities was raised 3% for the period to CHF 2,515 million. These encouraging first-half results are attributable to a stabilization of the SWISS market environment and a strong business performance in the second-quarter period.        

Swiss International Air Lines (Group) effected a further increase in its total first-half income from operating activities this year: the CHF 2,515 million generated was a 3% improvement on the CHF 2,452 million of January-June 2012. Operating profit for the period was also improved from CHF 61 million to CHF 72 million, an increase of 18%. The first half of 2012 had, however, seen a pronouncedly negative earnings trend.

SWISS delivered a particularly strong business performance this year in the second-quarter period. The quarterly operating profit of CHF 96 million was a full 48% above its prior-year equivalent (CHF 65 million); and total operating income for the quarter also increased 3.1%, from the CHF 1,284 million of April-June 2012 to CHF 1,325 million.

The reasons for these positive developments can be found in the slight stabilization of market conditions in the second-quarter period and in the impact of numerous actions taken under the Lufthansa Group’s SCORE programme to enhance earnings performance and results. “We have detected a change in market trends,” confirms SWISS CEO Harry Hohmeister. “But with the still-high fuel prices in particular, the situation remains far from easy, and we haven’t achieved our results turnaround yet. We’re currently in the midst of some major structural adjustments to our European operations, like our new organization and fare model for Geneva,” Hohmeister continues. “And we must continue to consistently develop and embark on such bold new paths.”

Initiatives in Europe and on the fuel management front

SWISS unveiled a new fare concept for customers departing from Geneva in the course of the second-quarter period. The new concept, which also offers one-way fares, will come into effect this autumn, replacing the present pricing model. “Our new Geneva fare concept offers an innovative new pricing approach while still providing all our traditional SWISS quality,” Harry Hohmeister explains. The developments in Geneva have extended to the appointment of a new local management team for the regional market of Western Switzerland and adjacent French border areas, while plans are also well under way to establish a new Geneva crew base. All these endeavours are intended to better meet the region’s specific air travel wishes and needs.

Elsewhere, SWISS has been taking further action on the fuel management front. The additional measures here – which include reducing aircraft weights, revised flight planning, new flight procedures and the adoption of new technologies – should cut SWISS’s annual fuel bill by a double-digit million-franc amount by 2015.

Passenger volumes and load factors up again

SWISS carried a total of 7.77 million passengers in the first six months of 2013, a 0.9% increase on the 7.70 million of the same period last year. Total flights performed in the period declined 3.1%, from 75,269 to 72,899 flights. First-half systemwide seat load factor amounted to 82.6%, a further 1.3-percentage-point improvement on the 81.3% of the prior-year period.

SWISS offered 2.9% more available-seat-kilometre (ASK) capacity systemwide in the first six months of 2013 than it had for the same period last year. Total first-half traffic volume, measured in revenue passenger-kilometres (RPKs), was up 4.5%.

Total cargo sales for the first-half period were a 2.3% improvement in revenue-tonne-kilometre terms. Cargo load factor (by volume) slipped slightly to 78.6%.

Personnel

SWISS remains a key economic driver and creator of jobs, offering young aviation enthusiasts the chance to make their career dreams come true. This year, too, the company will add over 200 new positions to its cockpit and cabin crew corps, and the establishment of the new crew base in Geneva will create some 150 new local jobs by year-end. On 30 June 2013 the SWISS workforce amounted to 6,960 full-time equivalents (compared to 6,722 FTEs at the end of june 2012). These positions were shared among 8,171 personnel (compared to 7,975 at the end of june 2012).

Fleet, product and network

SWISS continues to invest in refining its product and modernizing its aircraft fleet. Its latest intercontinental destination – Singapore – received new non-stop service from and to Zurich in May. And the current aircraft order books feature 30 Bombardier CS100s, six Boeing 777s, a further Airbus A330-300 and a further Airbus A321.

Outlook

In view of the recent stabilization of the market environment, SWISS’s management is confident of posting an operating profit for 2013 as a whole that will exceed last year’s CHF 212 million in swiss francs. “We will have to further intensify all our efforts, though,” says CEO Harry Hohmeister, “if we are to achieve the kind of sustainable profit base we need to finance our growth and investment policy between now and 2020.”

Copyright Photo: Rolf Wallner/AirlinersGallery.com. Airbus A320-214 HB-JLT (msn 5518) with the new Sharklets taxies at the Zurich hub.

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