Tag Archives: Swiss International Air Lines

Swiss plans restructuring in response to structural market change, fleet to shrink, jobs at stake

First A321neo, delivered September 18, 2020

Swiss International Air Lines made this announcement:

In view of the continuing global coronavirus pandemic and the resulting structural changes in its markets, SWISS has concluded that a restructuring of the company now seems unavoidable. In the medium-term future, the company expects to see a structural decline of 20 per cent in overall demand. In response to this, the SWISS aircraft fleet should now be downsized from its 2019 extent by a projected 15 per cent. With due regard to the workforce resizing via voluntary measures and natural staff turnover that has been under way since 2020, this would also entail a total workforce reduction of around 1,700 full-time positions or over 20 per cent. It could also entail forced dismissals for up to 780 ground and flying personnel. SWISS has now initiated a consultation procedure to find solutions that are as socially responsible as possible, in collaboration with its employees and its social partners. Despite the restructuring measures now taking shape, all the stipulations of the Swiss Confederation in connection with its bank loan guarantees would continue to be met. SWISS will also continue to pursue its premium positioning, maintain its operations from both Zurich and Geneva and ensure that Switzerland remains connected with the world.

One year on from the outbreak of the global coronavirus pandemic, air transport activities remain very subdued. The impact of COVID-19 on aviation has been far more substantial than was the case with previous exogenous shocks, and has shaken the industry to an unprecedented extent. Swiss International Air Lines (SWISS) also finds itself confronted with the greatest challenge it has faced in its corporate history. The company responded swiftly to the pandemic’s outbreak and initiated comprehensive cost-saving measures to counter the crisis and the growing threat to its liquidity (for further details please see the media release on SWISS’s 2021 first-quarter results of 29 April 2021).

Restructuring now seems unavoidable

In view of the continuing absence of any industry recovery, a restructuring of SWISS that extends beyond the cost-saving measures already initiated now appears inevitable. “It has grown increasingly clear that our market is undergoing structural change, and that despite the actions which we were swift to take in response, a restructuring of our company now sadly seems unavoidable,” says SWISS CEO Dieter Vranckx.

In the medium-term future, SWISS expects to see a structural decline of 20 per cent in overall demand. “With our new ‘reaCH’ strategic program, we are aligning ourselves to the changed market situation,” Vranckx continues. “reaCH includes a corporate resizing and transformation that should achieve sustainable overall cost savings of some CHF 500 million. Our aim is to repay our bank loans as promptly as possible and to sustainably retain our competitive credentials and regain our ability to invest.”

Aircraft fleet likely to be downsized 15 percent

The present SWISS fleet of 90 of its own aircraft and the transports of Helvetic Airways which operate SWISS services on SWISS’s behalf under wet-lease agreements will be resized in line with the decline in demand, and is likely to be reduced by 15 percent from its 2019 size. As a result, the short- and medium-haul fleet would be downsized from 69 to 59 aircraft through the withdrawal of Airbus A320-family equipment and a reduction in the wet-lease operations. On the long-haul front SWISS plans to reduce its fleet from 31 to 26 aircraft, by withdrawing five of its long-haul Airbuses.

As a result of the declines in demand, frequencies are likely to be reduced from their 2019 levels on both short- and medium-haul and long-haul routes. In addition, services may not yet be restored at all on a few direct intercontinental routes. All these plans and proposals would continue to pay full regard to the Swiss Confederation’s proviso when guaranteeing the requisite bank loans, i.e. that SWISS’s flight program should continue to be developed in proportion to the overall flight program of the airlines of the Lufthansa Group.

Up to 780 employees could be affected

The envisaged downsizing of the SWISS aircraft fleet and the adoption of further measures would also have an impact on the size of the future SWISS workforce1. By the end of 2021, the company will already have reduced this by over 1,000 full-time equivalents (FTEs) through a combination of voluntary personnel measures and natural staff turnover. But a further downsizing now looks impossible to avoid. As part of the resizing planned, up to 780 employees (650 FTEs) could be affected: around 200 ground personnel, 60 at SWISS Technics, 400 cabin personnel and 120 cockpit personnel. The resulting overall elimination of some 1,700 FTEs would be a reduction of more than 20 per cent from the workforce’s 2019 level.

In view of the structural change that is now being seen in the market, this action would need to be taken regardless of any further extension of the present short-time working arrangements. “I immensely regret that, after so many years of success with such a great team, we now have to consider such a painful step,” says CEO Vranckx. “Unfortunately, the situation remains challenging in the extreme, and continues to demand rigorous cost discipline and efficiency. We are convinced, though, that with the restructuring we envisage, we would emerge from this crisis all the stronger and all the more able to return SWISS to sustainable success in the ‘New Normal’.”

Consultation procedure initiated

The consultation procedure that has now been initiated in connection with the envisaged restructuring will see SWISS work with its social partners, its employees and their representatives to find further solutions which could keep the numbers of any forced dismissals required as low as possible and could ensure that any such dismissals were conducted with optimum regard to their social ramifications. This, too, would comply with the provisos under which the Swiss Confederation undertook to guarantee SWISS’s bank loans.

‘Sozialplan’ severance benefits plans are already in place for all SWISS personnel groups except its cockpit personnel. Since the present collective labour agreement for the company’s cockpit personnel includes protection from dismissal, a solution will now need to be found with the pilots’ AEROPERS association at the negotiating table to tackle the structural cockpit staffing surplus.

The consultation procedure and the subsequent evaluation phase are expected to be concluded by mid-June. SWISS will then communicate its corresponding decisions.

Premium positioning remains – even stronger emphasis on sustainability

As The Airline of Switzerland, even after any restructuring and with a smaller aircraft fleet, SWISS will still operate a large part of its previous network and thus continue to perform its mission of meeting the air transport needs of the Swiss economy, the people of Switzerland and the Swiss tourism sector in line with the new demands. To these ends, SWISS also remains fully committed to its two Swiss operating locations of Hub Zurich and Geneva, and will continue to provide direct intercontinental air services that keep Switzerland connected with the world. SWISS’s premium positioning will also remain unchanged: the company will, for instance, continue to offer a First Class on all its long-haul flights.

The resizing and transformation envisaged under the reaCH program also extend to an even stronger alignment of the SWISS business model to both sustainability considerations and structural change in the working world. This will centre in particular on steadily further modernizing the SWISS aircraft fleet, using sustainable aviation fuel and further developing and refining intermodal transport solutions. By adopting new work models and agile corporate structures, SWISS will also pay due and full regard to the structural changes in the working world; and the company will further continue to exploit all the new possibilities which are opened up by ever-growing digitalization.

Collaborations will also be intensified within the Lufthansa Group, with further synergies tapped. SWISS also aims to continue to strengthen its position within the Group by developing further competence centers, not least in the commercial area. And the already well-established collaboration with sister carrier Edelweiss will also be further pursued.

1 pre-pandemic as of 2019: 9,500 employees or 7,550 full-time equivalents

Top Copyright Photo: Swiss International Air Lines Airbus A321-271NX WL HB-JPA (msn 9417) ZRH (Rolf Wallner). Image: 951392.

Swiss aircraft slide show:

Swiss to trial IATA Travel Pass app

Swiss International Air Lines Airbus A320-271N WL HB-JDC (msn 10242) ZRH (Rolf Wallner). Image: 952963.

Swiss International Air Lines is to become the first airline in the Lufthansa Group to trial IATA’s new Travel Pass app, which it will do on its Zurich-London Heathrow route from April 22 onwards. The trial marks a major further step in making travel simple and reliable again during the current COVID-19 pandemic. Swiss has also been testing further such concepts since mid-March.

The new IATA Travel Pass app enables travelers to check up on the latest coronavirus-related entry provisions for their country of destination. It also allows them to have their COVID-19 test results sent directly to the app. This is turn enables the traveller to demonstrate to airlines and authorities that they meet the relevant entry requirements, without having to divulge further information about their personal health. The new app should also bring greater speed and efficiency to the corresponding airport procedures.

The new IATA Travel Pass app meets the strictest data protection requirements. All the user’s health details remain on the app: at no point are they transmitted or centrally stored, which assures the user of total control over all their personal data. The IATA Travel Pass has already been accepted as an official health document for entry purposes by the Singapore authorities.

Standardized parameters essential

“We support all endeavors to make travel simple and reliable again during the coronavirus pandemic,” says SWISS CEO Dieter Vranckx. “Digital health documents like the IATA Travel Pass are making an invaluable contribution to reconciling the demand for mobility with the need for health protection, to make it easier for our customers to plan their journeys with confidence and to restore the trust in travel as a whole. We still consider it essential that consistent, unified and mobility-promoting parameters are established and maintained, along with internationally recognized and standardized processes to deliver digital test and vaccination certifications. This is the only way to ensure that Switzerland can retain the international links that are so vital to the country in economic terms.”

Swiss testing further concepts, too

In addition to the IATA Travel Pass, Swiss is also evaluating the use of further digital solutions such as the EU Green Pass and the CommonPass.

Alongside these options, further trials are being conducted – since mid-March on its Newark (USA)-Zurich route and since the beginning of April on flights from Zurich to Spain and Portugal – under which Swiss travelers can upload their COVID test results to the swiss.com website up to 12 hours before starting their trip. These data will then be verified so that the traveller knows before departure whether they meet the official entry requirements of the country they are flying to. The current trials here should be extended to further Swiss routes, too.

The use of the IATA Travel Pass app and these digital document checks is optional. Swiss travelers are informed of all such options that are available to them in good time in advance of their planned travel.

Top Copyright Photo: Swiss International Air Lines Airbus A320-271N WL HB-JDC (msn 10242) ZRH (Rolf Wallner). Image: 952963.

Swiss aircraft slide show:

Swiss reports a substantial loss for 2020 owing to pandemic

Swiss International Air Lines (SWISS) made this announcement:

The coronavirus pandemic and the resulting global entry restrictions have led to an unprecedented slump in demand for air travel and massive revenue declines. SWISS’s total revenues for 2020 of CHF 1.85 billion were a full 65.2 per cent below their prior-year level. Adjusted EBIT for the year amounted to CHF -654 million (2019: CHF 578 million). The very weak results for the fourth-quarter period further increased the losses for the year as a whole. Radical actions initiated as early as March 2020 helped stem the losses to a certain degree. But with ever-clearer signs since the beginning of 2021 that the airline industry is undergoing major structural change, SWISS is now considering further measures to ensure its future viability. Passenger volumes have shrunk to a quarter of their 2019 levels, and no tangible recovery is expected before mid-summer 2021. SWISS essentially welcomes all efforts to make travel simple and reliable again, and is counting on the adoption of appropriate mobility-promoting parameters here that are as standardized as possible.

As a result of the coronavirus pandemic and the ensuing collapse of travel activity worldwide, Swiss International Air Lines (SWISS) suffered massive declines in its bookings and its revenues for the 2020 business year. The company consequently reported its first negative operating result for 15 years. Total revenues for the year amounted to CHF 1.85 billion, some 65.2 per cent below their prior-year level (2019: CHF 5.30 billion1)), and Adjusted EBIT for the year amounted to CHF -654 million (2019: CHF 578 million). The company’s Swiss WorldCargo division made a disproportionately high contribution to its 2020 results, in view of the strong demand for cargo transport services, not least for medicines and further medical items.

A very weak fourth quarter further increases losses for the year

As expected, SWISS’s operating losses further increased in the fourth quarter of 2020 as a result of the deterioration in the epidemiological situation. Fourth-quarter revenues totalled only CHF 311 million, a 75.7-per-cent decline on the prior-year period (Q4 2019: CHF 1.28 billion1)). Adjusted EBIT for the period amounted to CHF -239 million (Q4 2019: CHF 89 million).

“The coronavirus pandemic and the resulting travel restrictions have posed a huge challenge for us,” says SWISS CEO Dieter Vranckx. “And this, combined with the air transport sector’s relatively high fixed costs, has meant that our industry has been hit a lot harder than others. We have radically reduced our costs in response – to preserve our liquidity and ensure that we are in the best possible business shape for the further challenges ahead.”

Extensive cost savings have their effect

As soon as the pandemic developed, SWISS initiated numerous actions to maintain its liquidity and lower its costs, adopted short-time working companywide and deferred until further notice any projects and further investments that were not essential to its operations. “Thanks to these immediate and drastic cost saving measures, and also to the strong contribution from Swiss WorldCargo, we were able to keep our losses for 2020 within reasonable bounds,” concludes SWISS CFO Markus Binkert. “We expected to report annual results of these dimensions, and have incorporated them into our financial and liquidity planning. What we didn’t expect,” he continues, “was for the situation to worsen again since the beginning of this year. We are still losing around CHF 2 million a day. So we now have to further intensify our cost saving endeavours.”

Action packages have already been agreed with the company’s social partners for its cabin crew members and its ground personnel. The negotiations with its pilots’ staff association Aeropers on a viable new collective labour agreement suited to the present crisis times have not yet been concluded.

The company also expects to have reduced its workforce by some 1,000 full-time positions by the end of 2021 through a combination of natural turnover, early retirements and new part-time working arrangements. These actions also include a 20-per-cent reduction in the numbers of upper management personnel. And SWISS is further reducing its Management Board from four to three members: Chief Operating Officer Thomas Frick (61) will step down from his function as planned at the end of March 2021, but will remain active for the company under a project-based arrangement. “We would like to thank Thomas Frick already for his many years of outstanding service and commitment to our company,” says CEO Dieter Vranckx. “Throughout that time he has ably proven all his skills and expertise – not only as a member of our cockpit crew corps, but also in the various management positions he has held, most recently on our Management Board in these extremely demanding times.” As in the past, the COO function will now be additionally performed by the CEO.

Structural changes require further restructuring measures

With renewed lockdowns and additional travel restrictions imposed in response to new coronavirus variants, and with the slow progress of vaccination programmes, the market situation has tangibly worsened since the beginning of this year. SWISS’s production for March is at only some 25 per cent of its 2019 levels, and the present minimal flight operations in Geneva have had to be extended until the end of this month. “The situation has substantially deteriorated since 2021 began,” confirms CEO Dieter Vranckx. “It is now abundantly clear that the entire airline industry will undergo tangible structural change. As a result, we at SWISS will also have to consider a more radical resizing than we have envisaged to date. And any reduction in the size of our aircraft fleet would also impact directly on our route network, our cost structures and our organizational structure. But no decisions have yet been taken here.”

Slump in passenger numbers

The COVID-19 pandemic has prompted a slump in passenger volumes. SWISS2) transported a total of 4,790,372 passengers in 2020, some 74.5 per cent fewer than the previous year. A total of 48,069 flights were operated, a 68.2-per-cent year-on-year decline. Systemwide capacity for the year was 66.4 per cent down on 2019 in available seat-kilometre (ASK) terms. Total traffic volume, measured in revenue passenger-kilometres (RPK), was 76.8 per cent below its prior-year level. Systemwide seat load factor amounted to 57.9 per cent, a year-on-year decline of 26.1 percentage points. Seat load factor for Europe was substantially higher than its long-haul equivalent.

No recovery before mid-summer; mobility-promoting parameters required

Unfortunately, the recovery which had been hoped for in the first quarter of 2021 has failed to materialize. But with further progress in COVID vaccinations and with demand likely to have been only deferred, SWISS still expects to have its capacities back to around 65 per cent of their 2019 levels in the course of the third-quarter period. Private travel is likely to recover sooner than business travel here.

“The present pandemic is posing our company its greatest-ever challenges,” CEO Dieter Vranckx concludes. “We have every confidence, though, that SWISS can continue to provide Switzerland with an extensive network of direct air services for both passengers and cargo all over the world. If we are to do so, however, we will need to have a set of mobility-promoting parameters in place that are as standardized as possible – which also means, for us, the equal treatment of all transport routes, means and modes.”

SWISS will continue to help its customers in all their travel plans by offering flexible rebooking options in all fare categories.

 

1) SWISS adopted new accounting principles at the end of 2019 in compliance with those of the Lufthansa Group. Total revenues of CHF 1.28 billion for the fourth quarter and of CHF 5.33 billion for the full year of 2019 were previously reported in March 2020.

2) excluding Edelweiss Air

Swiss takes off with Confiserie Sprüngli

Swiss International Air Lines (SWISS) is extending its ‘SWISS Saveurs’ food and beverage concept for Economy Class travellers which has already proved such a success in Geneva to its short- and medium-haul services from and to Zurich from the end of March. In doing so, SWISS will be working exclusively with Confiserie Sprüngli, the long-established and internationally renowned Swiss family firm, whose recipes will be used for all the fresh items on the SWISS Saveurs menu. In compiling its new range of for-purchase inflight snacks and drinks, SWISS is putting a firm emphasis on offering a wider selection of items, on freshness and quality, on regional accents and on sustainable packagings. The new food concept will also bring other reputed Swiss brands on board along with smaller local suppliers. And SWISS will further be offering its own new mineral water from the Glarus Alps, which will be distributed to all travelers free of charge.

In introducing its SWISS Saveurs inflight culinary concept for short- and medium-haul Economy Class travelers from and to Zurich from 30 March onwards, Swiss International Air Lines (SWISS) is embarking on an exclusive new partnership with Confiserie Sprüngli, the internationally renowned Swiss company which is now in the hands of the sixth generation of its original founding family. Established in 1836, Confiserie Sprüngli has long been a byword for Swiss chocolate tradition and for products of outstanding quality and freshness made with natural ingredients. In this unique collaboration, all the fresh items on the new SWISS Saveurs menu such as muesli, salads, sandwiches and sweet pastries will be prepared using recipes of this Zurich-based traditional Swiss company.

“We are delighted to have teamed up with such an internationally renowned yet locally based partner with such a long tradition and such a focus on culinary excellence for this collaboration, which will enable us to offer a wide range of fresh top-quality snacks to our Economy Class customers, too,” says SWISS Chief Commercial Officer Tamur Goudarzi Pour. “We’ll be breaking new ground here with our packagings as well, where we’ll be using sustainable materials wherever we possibly can.”

 

The new Sprüngli products will be available on short- and medium-haul services from and to Zurich from 30 March and on services from and to Geneva from 28 April. SWISS Saveurs will be offered on flights of 50 minutes or more duration. The new menu extends to Bircher muesli, a pretzel with air-dried beef, a vegetable brioche and Sprüngli’s famous Luxemburgerli mini-macaroons. The prices per item range from CHF 7.50 for a Bircher muesli or a sandwich to CHF 18.50 for a freshly prepared hot meal (on longer flights). The product range will be updated every three to six months. SWISS’s tried-and-trusted Business Class concept for its short- and medium-haul services remains unchanged.

Sustainability is a further key consideration with the new fresh products. Most SWISS Saveurs items will be packaged in PaperWise material, which is made from agricultural waste using only renewable energy, and is thus entirely carbon-neutral. Those items that cannot yet be offered in PaperWise packaging will be packed in FSC-certificated cardboard or kraft paper. Production of the new fresh items will also be more closely tailored to customer demand, which will help to minimize food waste.

Further Swiss classics and new discoveries

To provide its inflight guests with an even broader range of for-purchase SWISS Saveurs items, SWISS will be supplementing its new exclusive fresh Sprüngli products with further Swiss classics such as Ragusa, Kägi Fret, Zweifel chips and Caotina hot chocolate. And there’ll be smaller Swiss producers to discover, too: the coffee will come from the small Zurich-based miró manufactura de café roastery, which sources all its beans solely from fair-trade suppliers; and the beverages range will include a gin from Turicum of Zurich and WhiteFrontier craft beer from Martigny in Canton Valais.

The snacks and drinks will be priced between CHF 3 and CHF 12. And the full range of SWISS Saveurs items can be viewed on swiss.com. SWISS will continue to offer all its inflight guests its popular SWISS Chocolates, along with a complimentary bottle of water.

Exclusive ‘SWISS Altitude 1150’ mineral water for every inflight guest

Together with SWISS Saveurs, SWISS is also launching a new mineral water together with its water supplier RAMSEIER Suisse AG that is produced exclusively for the airline in Switzerland’s Glarus Alps: ‘SWISS Altitude 1150’, a name inspired by the source spring’s elevation at 1,150 metres above sea level. The new mineral water will be served only on SWISS flights, and will be distributed to all passengers free of charge in a recyclable bottle in an unmistakable SWISS design. In a first step, SWISS Altitude 1150 will be provided on SWISS’s short- and medium-haul services, with the offer then gradually extended throughout the SWISS long-haul network.

Swiss aircraft photo gallery:

Swiss aircraft slide show:

Swiss to expand schedules from mid-summer onwards

Swiss International Air Lines has made this announcement:

In view of the continuing travel restrictions, Swiss does not now expect to see any tangible resumption of air travel activity until mid-summer at the earliest. So in the second quarter in particular, Swiss’s schedules will be substantially less extensive than originally planned. The company expects to be able to return its operations to around 65% of their 2019 capacity in the course of the third-quarter period. A total of 85 destinations will be served from Zurich and 43 from Geneva in the 2021 Swiss summer schedules, with a strong focus on meeting the needs of travelers visiting friends and relatives and leisure travel customers. Swiss will also be introducing new services from Zurich to Tallinn (Estonia) and Billund (Denmark) and from Geneva to Santorini (Greece), Split (Croatia) and Funchal/Madeira (Portugal).

In the light of new virus mutations, lockdowns, border closures and tightened travel restrictions, the recovery of the air transport sector has been further delayed. As a result, SWISS’s 2021 summer schedules will be considerably less extensive than had originally been planned, especially in the second-quarter period. “With the tighter travel restrictions in response to high infection rates, we have again had to tangibly reduce our service offer,” says Swiss Chief Commercial Officer Tamur Goudarzi Pour. “We won’t be substantially expanding it again until the summer travel season. But when we do so, we’ll be putting a clear focus on leisure travelers and on customers visiting friends and relatives, as the business travel segment will take longer to return.” SWISS plans to restore its capacities to around 65% of their 2019 levels in the course of the third-quarter period. The company will serve 85 destinations from Zurich and 43 from Geneva in its 2021 summer schedules.

New Zurich services to Tallinn and Billund

Swiss will be offering two new European destinations from Zurich in its summer schedules. The Airline of Switzerland will operate two weekly services from 25 June onwards to Tallinn, Estonia’s capital and business and cultural centre, which stands on the Baltic Sea. And from July 2 onwards SWISS will offer two weekly frequencies from Zurich to Billund in Denmark, which is best known as the home of Lego and its Legoland theme park.

In addition to the two new Zurich destinations, Swiss will restore services on various European and intercontinental routes on which they are currently suspended. On the long-haul front, service will resume on the Zurich-Miami (Florida) route from March 28 with up to five weekly frequencies. Up to seven weekly services will also be offered between Zurich and Boston on the US East Coast from May 1 onwards, and up to five weekly services will be offered to Los Angeles on the US West Coast from May 2 onwards. Swiss further plans to operate up to four weekly flights to Egypt’s capital Cairo from July 1 onwards.

On its Zurich short-haul network, Swiss will resume services to Niš in Southern Serbia and to Sarajevo, the capital of Bosnia and Herzegovina, which will each receive up to two flights a week from April 1 onwards. Travelers from Zurich will also enjoy non-stop service to London City again from May 12, for which up to 12 weekly frequencies are currently planned. And from  June 18 Swiss will be operating up to five flights a week to Bordeaux, in the heart of the wine growing region of the same name.

Swiss will also be expanding its services from Zurich to particularly popular destinations in this year’s summer schedules. Berlin will receive up to six daily flights, while Barcelona, Palma de Mallorca, Hamburg, Vienna, Copenhagen and Athens will each have up to three daily services. Naples will be served up to 11 times weekly, and Thessaloniki will receive up to nine weekly flights.

New services from Geneva to Santorini, Split and Funchal/Madeira

As already communicated, Swiss will continue to maintain its present minimal flight program in Geneva until the end of March. But Geneva remains a key Swiss operating location. Three new points will be served from Geneva in the coming summer schedules. The popular Greek island resort of Santorini will receive two nonstop flights a week from June 19. Two weekly services will also be provided to the Adriatic city of Split in Southern Croatia from July 2. And a weekly flight to Funchal on the Portuguese island of Madeira will be offered from September 4.

The destinations receiving the most services from Geneva in the coming summer timetable period include London Heathrow, Athens, Porto and Lisbon. SWISS will also be the only airline operating a weekly non-stop flight between Geneva and Ponta Delgada on the Azores in the new summer schedules.

Swiss aircraft photo gallery:

Swiss aircraft slide show:

 

Swiss serves ordinary notice to terminate pilots’ CLA and offers new negotiations

Swiss International Air Lines has terminated its negotiations with the Aeropers pilots’ association on temporary crisis measures in response to the coronavirus pandemic without reaching a result. Aeropers was not prepared to make sufficient concessions for the crisis years. In the light of this, Swiss has served ordinary notice to terminate the present collective labour agreement (CLA) for its cockpit personnel on March 31, 2022. Swiss remains committed to its social partnership, and is offering negotiations on a new CLA.

Like the rest of the global airline industry, Swiss International Air Lines (SWISS) has been severely affected by the coronavirus pandemic. In the first nine months of 2020 the company sustained an operating loss of more than CHF 400 million and saw its passenger numbers decline by around 70 per cent. On top of this, the company is currently drawing on a state-backed bank loan facility of up to CHF 1.5 billion which it plans to repay as soon as possible.

In response to these developments, SWISS has subjected itself to a rigorous cost-saving program. Substantial cost economies are essential in all corporate areas. And with these aims in mind, crisis agreements extending over several years have been concluded with the company’s social partners for its ground and its cabin personnel.

Swiss also initiated negotiations with the Aeropers pilots’ association in August 2020. As a result of the projected reduction in its total flight volumes, SWISS will have a significant surplus of pilots in the next few years. The aim of these negotiations was to conclude a new and forward-looking collective labour agreement (CLA) which would be aligned to the demands of the difficult crisis years ahead. This should supersede the present CLA of 2018, which is not suited to either the challenges of the coronavirus crisis or the re-establishment of the company in an uncertain and volatile future.

Aeropers, however, was only willing to discuss temporary crisis measures while retaining the present CLA. SWISS was also prepared to negotiate on such temporary measures, under the clearly-formulated condition that Aeropers agreed to significant crisis contributions and an expanded scope of action and response.

No viable Aeropers concessions

After several months of intensive negotiations, Swiss has regretfully concluded that Aeropers is unwilling to commit to adequate contributions in response to the current crisis. “Without substantial contributions and an expanded scope of action during the coronavirus crisis, we believe it would be irresponsible from a corporate and a business perspective to retain the present collective labour agreement,” explains SWISS Chief Operating Officer Thomas Frick.

Swiss is therefore keeping to its original demand of negotiating a new collective labour agreement for its cockpit personnel. To this end, the company has served ordinary notice to terminate the present CLA on 31 March 2022, the first possible date for doing so, and invites Aeropers to enter into negotiations in good time on a new collective labour agreement.

“We remain fully committed to our social partnership,” Thomas Frick continues. “And we are convinced that, together with Aeropers, we can conclude a viable new collective labour agreement for our pilots that pays due regard to the present crisis times, that is fit for the future and in particular also meets the requirements of modern working time models.”

Swiss temporarily reduces its Geneva flight operations to an absolute minimum in view of further-tightened travel restrictions

Swiss International Air Lines has made this announcement:

In view of the tighter travel restrictions announced by the Swiss Federal Council on January 27, 2021 and the resulting decline in demand for air travel, Swiss has been compelled to temporarily reduce its flight operations to an absolute minimum at Geneva Airport until the end of February.

Swiss remains fully committed to its Geneva business and operations in the longer term, and will continue to strive to keep Western Switzerland as well connected as possible with its global Zurich-based network.

HB-JDC:

Further changes are also being made to Swiss’ Zurich flight schedules. Travelers affected by flight cancellations can rebook free of charge or have the price of their ticket refunded.

Swiss International Air Lines (SWISS) is temporarily reducing its already-downsized flight operations in Geneva to an absolute minimum until the end of February with effect from Monday, February 1, 2021, in view of the tighter travel restrictions announced by the Swiss government. The action is being taken because Swiss’ Geneva services are point-to-point operations that do not generate additional business through a feeder function (as is the case at Swiss’ Zurich hub). Geneva Airport also currently lacks traveller testing facilities. The 13 weekly services between Geneva and the Zurich hub will continue to operate, as will the seven weekly frequencies between Geneva and the Frankfurt hub of Lufthansa. So Swiss will continue to keep Western Switzerland connected with its global route network in these still difficult times.

Zurich schedules also affected

Many of the short- and long-haul Swiss services that are currently being offered from and to Zurich can continue to be operated, in view of their feeder function and/or their cargo-carrying role. But the already substantially diminished range of flights here, too, is being further reduced with effect from February 1, 2021. As a result, Swiss will only be operating some 10 percent of the February services which it provided in 2019.

Travelers whose flight is cancelled as a result of these developments can rebook free of charge or have the price of their ticket refunded.

In other news, Swiss added two new destinations exclusively for freight shipments to the regular route network of its airfreight division: Seoul as of January 15, 2021 and Lima as of January 19, 2021.

Since the beginning of the Coronavirus crisis in March, Swiss has operated more than 1,000 cargo-only flights.

Swiss aircraft photo gallery:

Swiss aircraft slide show:

Lufthansa, Swiss and Austrian Airlines will be offering a selection of food and beverages in Economy Class on short- and medium-haul flights starting in spring 2021

Lufthansa Group has made this announcement:

In the near future, Lufthansa, Swiss and Austrian Airlines will be offering g their customers a new range of services in Economy Class. Starting in spring 2021, passengers on short and medium-haul routes will be able to purchase a broad selection of high-quality foods and beverages on board to suit their needs.

High quality standards are implemented in the new range from selection to preparation and presentation. With the new concept, the airlines are also investing more heavily in sustainability by selecting environmentally friendly products and packaging and by reducing food waste through more customized production.

“Our current snack offer in Economy Class does not always meet the expectations of our guests,” explains Christina Foerster, Member of the Executive Board Lufthansa Group responsible for Customer, IT & Corporate Responsibility. “The new offer was developed on the basis of feedback from our customers. With the high-quality offer available for purchase, our passengers will be able to decide what they want to eat and drink on their journey.”

The range of food and beverages will be available from the individual airlines in various forms, some of which will have regional references. The focus will be on fresh products and a selection of snacks. The standard, complimentary snack will no longer be served in the future.

The new offer will be introduced in phases as of spring 2021: Austrian Airlines will begin, followed by Swiss and Lufthansa; the new products will be revealed by individual airlines over the coming months.

Coronavirus crisis continues to severely impact earnings at Swiss

Swiss made this announcement:

The actions being taken in response to the worldwide coronavirus pandemic continue to weigh heavily on the global aviation sector, including Swiss International Air Lines (SWISS). The company reports total revenues for the first nine months of 2020 of CHF 1.54 billion, a 61.8 percent decline on the same period last year (1st to 3rdquarter 2019: CHF 4.02 billion1)). The operating loss increased to CHF 414.7 million (1st to 3rd quarter 2019: + CHF 489.6 million). Thanks to sizeable cost reductions and an increase in production in the summer months, the operating loss for the third-quarter period was lower than it had been in the second quarter. But with growing travel restrictions and the pandemic’s current rapid spread, SWISS will be further reducing its capacities in its 2020/21 winter schedules. The operating loss is expected to further increase by the end of the year. Stable and standardized parameters are now urgently required to restore confidence in travel.

The actions being taken in response to the coronavirus pandemic continued to impact substantially on global aviation and thus also on Swiss International Air Lines (SWISS) in the 2020 third-quarter period. SWISS was able to gradually restore services – to an extent beyond initial expectations – in the summer months. But growing travel restrictions thwarted the nascent revival in demand from mid-August onwards. Total revenues for the first nine months of 2020 amounted to CHF 1.54 billion, a 61.8-per-cent decline on the CHF 4.02 billion1) of the prior-year period. The operating loss further increased, and amounted to CHF 414.7 million for the first nine months (compared to an operating profit of CHF 489.6 million for the prior-year period).

“Given the paralyzing effect that the various quarantine provisions have had on our customers’ booking behaviour over the past few months, this nine-month operating result is in line with our expectations,” says Markus Binkert, SWISS’s Chief Financial Officer. “With rigorous cash and cost management, we were able to minimize the cash drain in the third-quarter period. And despite the extremely difficult market environment, we are on course in bank loan terms, and our liquidity is not at risk.”

 

In view of the recent global increases in coronavirus cases and the associated tightening of travel restrictions worldwide, demand for air travel will further decline in the fourth quarter of this year. As a result, SWISS’s operating losses in 2020 are likely to further increase, and for the first time in 15 years the company will report a negative annual earnings result.

Further cost reductions in the winter timetable period

SWISS has launched a comprehensive restructuring programme to ensure that it can repay its state-backed bank loans as swiftly as possible and can secure its future viability and competitive credentials. The actions being taken here include deferring all projects and investments companywide that are not essential to business operations. SWISS is also pursuing three socially reasonable courses of action to reduce its personnel costs: a freeze on new hirings, attractive part-time employment models with associated salary reductions and early retirement options. In combination with natural workforce turnover, these should reduce the SWISS payroll by some 1,000 positions over the next two years. The company is also discussing these and further cost reduction measures with its social partners. In a further effort to lower costs, SWISS has also resolved to temporarily withdraw its 28 older Airbus A320 family aircraft for the winter timetable period. The company’s short- and medium-haul winter schedules will be operated solely with its more efficient Airbus A220 fleet and its new-engine-option or “neo” Airbus A320 and A321 aircraft.

Brief recovery in the third-quarter period

Having gradually restored services from June onwards, SWISS also saw an upturn in the demand for air travel, especially to tourist destinations and in the visiting-friends-and-relatives segment. As a result, the airline was able to operate up to 40 per cent of its originally planned programme in the summer months, which was slightly above expectations.

Growing and ever-changing travel restrictions and quarantine regulations extinguished this nascent revival, however, from mid-August onwards. As a result of the expanded production and substantial cost reductions, SWISS’s operating loss for the third-quarter period was lower than the second quarter’s at CHF 148.3 million (Q3 2019: operating profit of CHF 244.3 million). Total third-quarter revenues amounted to CHF 370.5 million (Q3 2019: CHF 1.45 billion1)).

Drastic decline in nine-month passenger numbers

SWISS2) transported a total of 4,315,992 passengers in the first nine months of 2020, some 69.8 per cent fewer than it had carried in the same period last year. A total of 41,294 flights were performed in the period, 64.1 per cent fewer than in January-to-September 2019. Nine-month systemwide capacity was 63.2 per cent down in available seat-kilometre (ASK) terms, while total traffic volume, measured in revenue passenger-kilometres (RPKs), saw a 71.9-per-cent decline. Nine-month systemwide seat load factor stood at 64.2 per cent, 20 percentage points below its prior-year level.

SWISS’s passenger volumes were 77.2 per cent down in July, 76.7 per cent down in August and 84.0 per cent down in September. Systemwide seat load factor for the third-quarter period stood at 43.0 per cent. Third-quarter seat load factor amounted to 71.5 per cent for European services, but was substantially lower for long-haul services to and from all traffic regions.

Demand for cargo services remained high. By the end of September, SWISS’s Swiss WorldCargo division had performed over 880 cargo-only flights and transported more than 18,000 tonnes.

Sizeable range of long-haul services thanks to high cargo demand

Keeping Switzerland connected with Europe and the rest of the world remains SWISS’s paramount objective. But a host of travel restrictions and quarantine provisions and a coronavirus pandemic that is raging more strongly than ever are making this increasingly difficult to do. As a result, SWISS’s originally planned flight schedules for the coming winter have had to be substantially downwardly revised. The company currently expects to offer services that amount to 25 per cent at the most of its prior-year capacity.

Thanks primarily to continuing strong demand for cargo services, however, SWISS is able to offer a comparatively wide range of long-haul flights. Since the start of the winter timetable period at the end of October, the company has been serving 16 of its 24 established long-haul destinations, and two more will be added in March. As a result, SWISS is serving a disproportionately large number of long-haul destinations (compared to its sister Lufthansa Group airlines) from its Zurich hub, albeit with fewer frequencies than originally planned.

“We will continue to do everything in our power to perform our mission of keeping Switzerland optimally connected with the world and providing our customers with a safe travel experience,” confirms SWISS CEO Thomas Klühr. “We are unlikely to see a recovery in the air transport sector until this pandemic subsides and the present immigration bans and quarantine requirements are lifted. But if the next summer timetable period is to bring the kind of upturn we desire, we must have parameters in place by then that are stable, standardized and favourable to mobility.”

Thomas Klühr to step down as Swiss CEO at the end of 2020

Swiss International Air Lines has made this announcement:

Thomas Klühr, who has been CEO of Swiss International Air Lines (SWISS) since 2016, has asked the SWISS Board of Directors to release him from his duties at the end of 2020. The Board of Directors has acceded to his request with the greatest regret, but with respect for the personal reasons behind his decision and with its express thanks and appreciation for his substantial achievements at SWISS and his more than 30 years of service with the Lufthansa Group. Following his departure, Thomas Klühr will in future serve on the new and yet-to-be-established Swiss Aviation Foundation. The Board of Directors will decide on his successor as SWISS CEO in the fourth-quarter period.