Swiss Intl Airlines????

[picobello]

Does anyone know anything about the actual situation of swiss? I heard so many things about their futur?!?:ugh:

Any downsizing expected? Layoff staff??

Thanks for any news..;)

[Robert Vesco]

Unfortunately there seems to be a big discrepancy between being right and having a large Swiss ´flag carrier.´

;)

[DCS99]

Picobello - at the moment things are stable.

The last MD-11 has been withdrawn and 2 extra A340s will be brought in to restore daily services to destinations that suffered frequency reductions.

Everyone at Swiss knows they're not out of the woods yet.
Not by a long way.

But it's for sure that Swiss is not the only European carrier in the woods!

Studi - Swissair was first in many fields of aviation - 1st to operate B747-300 and A321, 1st European carrier to Shanghai etc. and had a profitable extensive international network for many years eg. daily Osaka and Tokyo with great load factors.
Tragically it was all destroyed.

If there's 2 days in my working life I would take back, they would be 11 September 2001 and the Swissair Grounding on 02 October. Never again please.

BTW, size of country is not important - look at SQ or CX.
But good management is always important!

[toothpaste67]

profitable network- swissair- I must have missed something- they went bankrupt-right? so is that profitable? huh?

[DCS99]

Nei, nei, not at the end of course, but Swissair was profitable before the "Hunter" strategy started in late 90s:

The idea was to buy up part ownership of other airlines: LOT, Sabena, TAP, Air Liberte, Air Littoral (with the silent C we used to say), SAA, to build a "patchwork quilt" Global Alliance, saving money by combining Aircraft purchase (e.g. SN Airbus), IT costs and general procurement.

It didn't work. But it looked good on paper to the SR board who had been advised by external Management Consultants to go down this route.

Oh how can I forget, replacing Swissair with SAirgroup, SAirlines, SAir Services etc. and building up a myriad of 40+ different internal companies just to throw in major organisational changes at the same time.

Cash flew out of Switzerland. In the end, I believe Management lost all financial control - we had 3 CEOs in my last 8 months - and the final straw was when money was not released for Corti selling Swissair's 66% share in Crossair by UBS Bank. Never mind the fact that the value of assets like Swissport (Ground Handling), Gate Gourmet (food), Atraxis (IT) had fallen through the floor after September 11th.

If I remember right, it was LHR who first impounded SR aircraft as the roof fell down on Tues 02 October 2001:
Amongst grim memories were the awful scenes in the Terminal at ZRH - disbelieving passenger and staff - that horrible "Swissair has stopped flying" A4 distributed note and the sight of crew in tears outside the Ops Center.

But don't worry, Swiss will be fine. And although I don't work for them anymore, I pray for them every night .:D

And if you want a Swissair Share Certificate, just let me know.;)

[B737NG]

The world does not need Swiss... but Swiss need the world. Thinking only in national terms can be very dangerous today.. you may be history tommorrow. Flew with the original Carrierer a few times on full fare tickets, allways happy. Did not like to see them go "south". If the leader is not any good how can the indians win the battle?.

NG

[124.8]

DCS99 writes..... "But good management is always important!"

studi writes.... "Swiss's ex-CEO A.Dose has said that he sees Swiss only profitable by being bought out by Lufthansa." Is Lufhansa the only company to do that, or would another be able to rectify the poor management situation too ??

DCS99 writes... "Cash flew out of Switzerland. In the end, I believe Management lost all financial control "..... How many of the previous managers had taken the company money out of Switzerland and are sitting on their farms or big estates somewhere ?? How can you pay a bonus to your managers when a loss is being made ? Ask Andre Dose and kie !!!!! They got a big bonus. Luckily, he is OUT !!!


Downsizing : When captains are made first officers ???? There must be trouble brewing again...

studi, your last writing seems another paper effort to make something look good on paper, but look into the real world.......

Their last effort getting CHF 4.5 billion from the Cantons, has lasted only few years, I need not say more about their waste....

Spending CHF 18 million on the new logo few years ago, another CHF 16 million for new uniforms, maybe another CHF 16 million for more bonusses, all expenses that could have been delayed till better profits were on the cards. And some more millions for consultant fees by mr "Nestle"........

Hmmmmm ??????




:* :* :*

[OE-LAU]

DCS99:
Is the introduction of A340 #10 and #11 already confirmed?? I have heard about it as a rumor, but haven´t heard a confirmation yet.
Maybe I missed it - which would be great news.

I know their longhaul flights are doing pretty well and reintroducing daily flights to destinations they serve 6 times/week makes alot of sense. Also a number of flights to China are planned to be reintroduced by these 2 additional a/c.

OE-LAU.

[redfred]

Having worked for SR for 6 years at lhr and been through the md11 ex JFK and the grounding, I have a lot of connections with SR since they were the first company i worked for, stayed with them through SR/qualiflyer/AMP/LX until have jumped ship now but there are no LX emplyees at LHR anymore or gone over the handling agent swissport but its rumoured now the AZ will take over the handling and the contracts been signed, ive still got friends who work for Swiss and they have no idea what will happen, most think they will be handed over the handling agents, be it my mates are in outstations.
SR were a profitable company it was just to many fingers in too many pies that brought them crashing down.

[ettore]

Swiss CEO Franz is foreseeing a loss of about 100 to 200 millions Swiss francs in 2004, mainly due to the Jet A-1 price increase.

Swiss is now trying to save money on everything it can, from scrutenizing business lunch at management level down to cutting down parking lots subventions for employees and paying second class only instead of first class for crews using the railway to get to their base... One would be amazed by this type of "little bits saving", knowing what some of the MCC-pilots are still earning !

As CEO Franz confirmed in an interview with the aeropers bulletin "Rundschau" (www.aeropers.ch, click "rundschau". In German only), Swiss had already cut everything that was relatively easy to cut last year, making it now more difficult to bring the costs further down.

He also confirms that it will come to a further restructuration, but does not specify how nor when. Fact is that the credit facility recently obtained by the company allows him now to finance a further restructuring, which the company badly needs if it wants to survive.

In a previous instance this fall, CEO Franz said that even if the fuel prices had remained low, the airline would not have reached a break-even.

[ettore]

Update: Swiss CEO Franz' forecast in the aeropers bulletin dates back to Oct. 6th, when the interview took place.

In the meantime, Jet A-1 did not get cheaper and Swiss having no hedging on its fuel, the bill will be higher as expected.

It means that the 100 to 200 millions Swiss francs estimated losses for 2004 are more likely to be 200 to 300 millions or more.

Next financial result (3rd quarter) is to be published on Nov. 16th.

[picobello]

Thanks for all your answers guys!!!!!!

But a last question!

If Swiss is considering adding 2 A340 to the actual fleet.... Who will fly these airplanes?????:confused:

Ex swissair or ex crossair pilots??????????

All infos appreciated!!!!!!

Thanks

:ok: pico

[ettore]

a) forget about two new A340 with Swiss. The company does not have any financing – and indeed very poor ratings with banks – to think of a pre-financing.

b) if any monexy available, it will be devoted to the next shrinking (negative expansion) of the fleet.

c) let's imagine Swiss would win the next best super-mega-lotto-totto-calcio whatsover and decide to use it to subsidies Airbus, the A/C would indeed be flown by former SWR-pilots. The only way former CRX-pilots could expect to qualify for flying Airbusses has been carfully mined, trapped and washed away by the SWR-pilots, since there will be soon no more charter operations at all ! ("Swiss Sun" is dead).

If you're interested, as a pilot, to fly Airbusses somewhere in Europe, a friendly advise: a) do not go to Swiss; b) find such a job before the 900 or so Swiss pilots qualified on Airbusses are laid out and look for a similar job.

[Saab 2000 Driver]

Ettore, you have been predicting doom and gloom for quite some time now but Swiss is still flying.

I was convinced one year ago that Swiss was going down, but now I´m not so sure anymore.

What are you basing all these rumours on ettore?

[OE-LAU]

It looks a little better for SWISS obviously as they reported their first profit in their 3 quarter results, today.
http://www.swiss.com/web/IE6/about-swiss/sw-nw-pr-press-releases-04.htm?newsid=52680

Not much, but definetly better than a few months ago.
Way to go SWISS!!

OE-LAU.

[Robert Vesco]

Didn´t Sabena also once make a ´profit´ while under SAir Group Führung? :E

[DCS99]

Swiss makes a profit.

A German version from tabloid 20min.ch - strangely positioned on the Main News page next to an article about the world's most expensive Vibrator:

http://www.20min.ch/news/wirtschaft/story/31023279

We'll see who's right about the A340s in due course....

[ettore]

Go to the Swiss website, check their media releases and download the four pages Q3 financial results (PDF), instead of relying on "20 Minuten!" I mean, if you're serious about the future of your airline, please check your infos first, as you do when preparing a flight.

Swiss points at several worrying and telling facts and figures:

a) without the 67 mio francs it got from its litigation in France and the 50 millions euros Barclay Bank credit (not the 325 mio credit line), the financial result would be again deep in the red;

b) Swiss CEO Franz is quoted as saying that the result is under his expectations (below budget) and that the road to the turnaround is still a rocky and narrow one;

c) the same says that maintenance and fuel costs remain to high while the revenue per seat per kilometer decreased.

Now, if you look at the figures released by Swiss, you'll notice that since the beginning of the year (i.e. since the tremendous downscaling at the end of 2003):

1) Swiss has cut its operating costs by 24,8% while the operating revenues decreased by 16,1%, meaning it improved the ratio by 8,7%. But it's obviously not enough. Why ? See below.

2) Swiss has burned 527'427 francs liquidity per DAY (144 millions in 9 months);

3) Swiss improved its operating cash-flow but the investing and financing cash-flow went on compulsively climbing up the Matterhorn: all the improvements on the cost side are just washed away by the costs of credit (Remember? Bad ratings.) and the tremendous leasing costs. The brand new A340-300 are just killing the balance sheet, if not the airline.

Now, what the way out of this mess?

- Restructure...
Swiss is allowed to draw 180 millions out of the 325 millions credit line it got a couple of weeks ago. It's not enough to lay off enough people with an acceptable social plan, but it can help, if the restructuring plan is convincing enough to mobilize both the share holders and the banks. But it requires to...

- ...shift strategy.
Up to now, the board does want to stick to the long-haul strategy. It will take more time and more tears for a change of mind. As long as Swiss remains without a strong industrial partner, it will not be able to fill its long-haul network at a reasonable cost with its continental network, which is both too weak and too expensive (3 A/C types, a.o. reasons) in face of the Low Cost competition in Europe.

Morever, Zurich is not a competitive hub and will never be. So just forget about a Full "Universal" Service Carrier built around a hub. But Switzerland, including Basle and Geneva, does offer a number of very lucrative point-to-point routes. They are merely "niches", but they are profitable on many destinations in Europe and on 10 to 12 long-haul destinations. That's all and that's enough if you keep a small organization for a small but fine airline as the Belgian did when Sabena died.

- Or sell. But I would be very surprised anyone would buy, not even ventures capitalists.

Open your eyes: in its actual shape, Swiss cannot last. It's just a matter of time. It must change the recipe if it wants to feed, alone, on such a small market.

PS. And don't tell me about the marvelous bilateral agreements with a number of partners: they all struggle for survival too and it doesn't help Swiss to put pax on an Ukrainian or Sri Lanka plane for 300 bucks more as directly booked with those airlines. It doesn't secure your job either. On the contrary.

Robert Vesco wrote: Didn´t Sabena also once make a ´profit´ while under SAir Group Führung?

Yes it did. In 1998. Do you know how? The then CEO Paul Reutlinger sold Sabena's fuel hedging contracts. Just as Swiss CFO Svensson did at the beginning of this year ! It didn't help much...

What did also contribute to the 1998 second positive result in Sabena's history, was the Air France strike during the World Soccer Championship in Paris. Not really something to be proud of...

By the way, Reutlinger might have to appear in front of a Swiss judge, since the administrator of the defunct Sabena brought a complaint in Zurich against the former SAirGroup bosses. He claims for roughly two billions euros (yes, two billions, with a "B" as in bravo).

[Ms. Turret (Ozi)]

Ettore,

Thorough analysis, and much appreciated. For too long, people have formed their views on the Swissair/Crossair/Swiss debacle from reading Blick and listening to sound bites.

There are two fundamental problems mitigating against the future of Swiss, with the first, curiously enough, directly influencing the second. First, the unfortunate truth that geography informs nationally identifiable characteristics, and secondly AEROPERS.

No CEO on earth can save an organisation whose national employees are permitted to retain, and in the case of Aeropers, embellish the delusion that there is something inherently superior about being Swiss, or more accurately, ex-Swissair. The Airbus 340 purchase will be remembered by history as the folly that finally killed off the brave experiment to save a civilian aviation industry in Switzerland. What a pity. When the time comes, I truly hope some comfort is to be had in the reminiscences of those forced into early, though well heeled retirement (thank you Aeropers pension fund), about the destruction and waste they have wrought, and at what cost.

Ozi.

[Robert Vesco]

Can anyone confirm that BSL will become easyJet´s next (http://www.pilotcareercenter.com/JobResearchAirlineDetail.asp?AirlineID=348) base?

[Saab 2000 Driver]

Swiss just got another 15 million Swiss Franks ´loan´ from Zürich airport!

Did someone say ALITALIA?!?! :yuk:

Here is the news: http://www.baz.ch/news/index.cfm?keyID=02FAED07-AC4E-423C-90C2AC226F4B680D&startpage=2&ObjectID=B671C2CB-60CF-2065-3D5675BDC4C1B53A

[Saab 2000 Driver]

What I don´t understand is all this talk about load factor.

I guess it´s an indication of market share, but it says nothing much about making a profit.

[Robert Vesco]

Nothin´ to worry about folks!

Swiss made a ´profit´ ( ;) ) despite:

1) a drop in load factor
2) fuel at almost 50 Dollars/barrel and selling it´s fuel hedges!

Looks like a great recipe for the future! Makes me wonder why they need that 15 million Sfr loan (http://new.moneycab.com/de/home/business/mcpress2004/w50/041209_swiss_dahrlehen_unique_gh.html) after all! :rolleyes: :hmm:

[ettore]

Recent moves of Switzerland's transport minister Moritz Leuenberger towards reopening talks with Germany about Zurich Airport approach routes and reitaration of the Confederation desire to sell its 20% Swiss stake are hinting to possible new talks between Swiss and Lufthansa.

Swiss CEO Franz also stresses the necessity to resolve delays and improve service to the pax at ZRH. Within the airline, he started a new round of negociation on wages with cabin personal, cut parking and rail transport expenses for the crews, outsourced IT-Services, talked about bringing the continental fleet into a separate entity and so on.

In short CEO Franz started a low-key and low-profile restructuring campaign which can only please the long sought and deeply needed industrial partner named Lufthansa...

Interstingly enough, Swiss sticks to the RJs. 24 RJ-85 and RJ-100 cockpit doors will be equiped with a video camera for security purpose. A costly gadget while the airline is saving on parking lots ! And no words of the Embraers. In May 03 CityLine (Lufthansa regional) has decided to continue to operate its fleet of 18 Avro RJ85 jets well into the second half of this decade. Could be a good fit.

So far, just food for thoughts, but I wouldn't be surprised to hear sometime next year of a partnership LH-LX (that would a least allow LX to retain its brand for obvious political reasons.)

[ettore]

Thanks for the compliment, Studi.

To keep the same trafic rights as today, it would require to keep -- at least on the paper -- a majority of shares in swiss hands. But as the AF-KLM deal has already shown, they are workaround possibilities.

Indeed, Swiss could and should retain its name but could be operated in the meantime by a single management, common to Deutsche LH and Swiss.

It would indeed be sensible to retain the name Swiss, not only for the brand (at least for those who are still believing in the Swissair thing) but mainly to soften public opinion in Switzerland, as medias and politics could easily kill the deal. They already killed the Alcazar KLM-SAS-AUA-SR project, a killing that opened the door to the Hunter Strategy which, in turn, lead to the 2001 grounding. :uhoh:

[Runway 31]

From Swissinfo today

Swiss spokesman Jean-Claude Donzel said the company had handed over a document to the unions in which it stated how many pilots’ jobs were to be cut.

The move was confirmed by Christoph Frick, the president of Swiss pilots, the union of former Crossair pilots, who said that it represented the “maximum demands” from Swiss.

But both men declined to comment on the mooted amount of 306 posts, saying that negotiations between the two sides, currently ongoing, are confidential.

According to the Zurich-based SonntagsZeitung, the document, which has been presented to the pilots, cabin personnel and ground staff unions, calls for the number of jobs among regional pilots to fall from 440 to 207.

The number of posts cut for Airbus pilots is said to be 73 of the 658 pilots currently employed.

Restructuring

Swiss announced on January 18 that it is to shed up to 1,000 jobs over the next 18 months and reduce its fleet by 13 aircraft in a bid to cut costs by SFr300 million ($253 million) by 2007.

At the time, the company said it hoped that one third of the jobs due to be axed could be lost through natural attrition. Swiss would be discussing the compulsory job cuts with the unions, it added.

The airline blamed pressure from low-cost carriers, such as easyJet, for the decision to downsize, and said it would focus in future on profitable routes.

Swiss warned that it needed to implement the measures quickly to be in a position to post an operating profit for 2005.

The current European fleet is made up of seven Saab, 19 Jumbolino and 11 Embraer machines. The SonntagsZeitung alleges that all Saab pilots are due to lose their jobs and that after restructuring only 17 Jumbolino and seven Embraer planes will remain in service.

Destinations

According to another Sunday paper, the French-speaking Le Matin Dimanche, Swiss is preparing to hand over three destinations from Geneva Airport - Paris, Rome and Lisbon - to its foreign partners.

Donzel declined to comment on this, saying only that at the end of negotiations two to three destinations from Geneva airport would be transferred to other companies and that Swiss would continue to serve six destinations from Geneva.

[ettore]

The SonntagsZeitung figures are wrong.

Whatever the figures are on the direction's agenda, they are anyway to be negociated until the end of May. So drink your cup of tea and wait calmly until some reliable figures come out.

Another story hitting the headlines says that a deal has already been struck between LH and LX. ==> Click Here (http://news.airwise.com/story/view/1108062383.html)

As far as GVA is concerned, the Summer Timetable reinstate a direct GVA-JFK every day of the week (formely 6 flights out of 7 days).

[Danou_71]

None of them I hope but LH pilots... That makes sense, no?