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View Full Version : Swissair to cut 3,000 jobs


piperindian
24th Sep 2001, 22:24
Swissair to cut 3,000 jobs
September 24, 2001 Posted: 1305 GMT


LONDON (CNN) -- Swissair Group, the debt-laden Swiss airline, outlined plans on Monday to cut 3,000 staff and reduce its fleet after terror attacks on the U.S.

Europe's fifth-largest airline was already in trouble after an expansionist plan to build its own airline alliance through the acquisition of regional carriers proved costly and burdened it with debts of $7.8 billion Swiss francs.

The Swiss company announced 12 days before terrorist hijacked planes in the U.S. plans to axe 1,250 staff and sell assets worth 4.5 billion Swiss francs ($2.7 billion). The company currently employs 72,000 staff.

The number of job cuts in the airline industry has topped 100,000 and may not be over, as carriers continue to assess the long-term economic impact of cancelled travel plans. British Airways, Europe's biggest airline, plans to slash 5,200 jobs while rival Deutsche Lufthansa has canceled airline orders.

"Recent tragic events in the U.S., and in particular their severe implications on the world aviation industry as well as the general economic outlook, imply more radical measures are now required," Swissair said.

The jobs losses will hit its Gate Gourmet catering business, which employs 30,000. More jobs will go as the company radically restructures it business, as it combines Swissair and regional carrier Crossair under a new entity called Swiss Air Lines.

The combination is expected to reduce its longhaul fleet by 25 percent. The company also plans to cut transfer passengers to less than 40 percent by 2004, from 60 percent now.

Shares in Swissair, which have plunged 82 percent from a high of 262 francs in January, soared 25 percent to 59 francs in early trade in Zurich. The stocks hit a low for the year of 41.1 francs on September 18.

Over the weekend, the Swiss finance ministry established a group of leading business leaders to come up with a viable restructuring plan to keep the airline afloat. Details of that plan will be presented to the board on October 10 and to the shareholders on November 9.

Chief Executive Mario Corti, who took over in March after his predecessor Philippe Bruggisser was ousted, has said the company plans to cut costs by 500 million francs in 2001, after the company posted it worst loss in history in April.

Swissair plans to cut debt by 2 billion francs by the end of 2002, and by a further 1 billion a year later.