Corona quarter – Swiss sales slump 20 percent

The corona pandemic left deep marks on the results of the airline Swiss in the first quarter of 2020. The airline has suffered an operating loss of CHF 84.1 million after a profit of CHF 48.3 million in the previous year. Swiss makes no forecasts for the year as a whole.

Specifically, sales slumped by 20 percent in the reporting period to CHF 923 million, as Swiss announced on Wednesday. With 2.99 million passengers, 21.4 percent fewer passengers were transported than in the comparable period of 2019. The load factor on flights (SLF) decreased by 5.3 percentage points and averaged 73.3 percent.

Due to the virtually complete decommissioning of the fleet in March, the number of flights operated fell by around a fifth. The number of seat kilometers offered also declined accordingly.

Wage negotiations with unions completed

Due to the lack of ticket revenue, Swiss initiated various cost-cutting measures: on the one hand, planned investments were stopped, and on the other, short-time work was introduced across the company and a hiring freeze was imposed. Swiss had already announced at the beginning of May that it would cut its costs by around 20 percent in the face of the corona crisis.

As of July, the company also no longer wants to compensate the wages of its short-time employees to the usual wage level, as was also known. The talks held in this regard with the social partners Kapers (cabin) and Aeropers (cockpit) have been concluded, as the press office wrote at the request of AWP. At the moment, no further information is wanted.

Swiss will also reduce its fleet size. This happens on the one hand by the delayed acceptance of ordered short and medium-haul aircraft and on the other hand the early retirement of older aircraft is checked. The airline has also applied for government aid to bridge the looming liquidity shortage. Swiss chief financial officer Markus Binkert is quoted as saying “Swiss will make every effort to repay the loans plus interest as quickly as possible”.

Gradual expansion of the offer

In order to improve the financial situation, the airline wants to ramp up its greatly reduced flight schedule. In the course of easing travel restrictions in Europe, the offer from Zurich and Geneva is to be gradually increased from June, added CEO Thomas Klühr. 15 to 20 percent of the original program is to be offered in June – during the crisis, the Lufthansa subsidiary only maintained 3 percent of the normal flight offer.

A further expansion of the offer is planned for the summer months. Overall, the gradual build-up will “take two to three years,” Klühr dampened expectations.

The financial outlook is also cautious. Due to the still very unpredictable further development of the corona pandemic, a result forecast cannot be made, the statement said. “We are unlikely to reach sales in 2019 until 2023,” said Swiss Head of Commerce Tamur Goudarzi Pour recently to the press. Tourism is lagging behind the economic recovery. He goes back first and comes up last, Goudarzi Pour continues.

Lufthansa with billion loss

The Swiss parent company, Lufthansa, also wrote deep red numbers in the first quarter due to the corona crisis. The bottom line was a loss of 2.1 billion euros after a seasonally typical minus of 342 million a year earlier. Group sales decreased by 18 percent to 6.4 billion euros.