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Swissair to axe 1250 jobs

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Swissair to axe 1250 jobs

Old 31st Aug 2001, 00:12
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Post Swissair to axe 1250 jobs

Swissair Group Cuts Job In Wake Of Six-Month Losses

30-Aug-2001 11:08 AM U.S. EDT

(AP)-

Troubled airline Swissair Group said Thursday it was cutting 1,250 jobs and selling its ground handling and airport retailing businesses as it reported a loss for its first half.

The group reported a first-half net loss of 234 million francs ($140 million) in contrast to a profit of 3 million francs in the same period last year.

Business worsened in the second half of 2000 and left Swissair Group with a full-year loss of 2.9 billion francs for 2000.

First-half sales were 8.14 billion francs ($487 billion), up from 7.51 billion in 2000.

"The economic slowdown in the United States, which is impacting Europe, high fuel prices and a strong dollar has severely affected the sector and related industry profitability," Swissair said in a statement.

By mid-morning, Swissair shares on the Zurich exchange had fallen 4.1 percent to 105 francs (dlrs 62.9).

The company said 1,000 jobs would go, primarily in Switzerland, as it incorporates the business of its Balair charter flight service into the main Swissair operations and those of its regional carrier Crossair.

Another 250 jobs would go through a 5 percent reduction in worldwide management, added Chief Executive Mario Corti.

Swissair said it was selling off its majority stake in the ground handling service Swissport, and later announced that it had signed a memorandum of understanding to sell the stake to British company Candover Investments.

"The planned transaction provides Swissport with the financial resources to play a leading role in the ongoing consolidation of this worldwide industry and should therefore give the impetus for this company to continue as a leading competitor in this sector," Swissair said in a statement.

Swissair also wants to sell all or a majority of its holding in airport retailer The Nuance Group.

"With these divestments, we generate considerable equity and accelerate the achievement of our objective to reduce the group's net debt," said Corti.

"We are confident that this is also in the best interest of the concerned businesses as they will be able to continue their successful development and growth under the new ownership structures."

Swissair plans to reduce its net debt by 2 billion francs ($1.2 billion) by the end of 2002 and by a further 1 billion francs ($600 million) by the end of the following year. The new announcements mean the company will dispose of more than 4.5 billion francs ($2.7 billion) in assets over the next 18 months.

Since the beginning of the year, the Swiss national carrier has changed its board of directors and its name and has relentlessly pulled back toward its core businesses.

The group has already sold off its Swissotel hotel chain and has been slowly withdrawing its stakes in foreign airlines in other countries.
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