SWISS posts CHF 4 million loss for the first quarter of 2012

Swiss International Air Lines (Group) achieved total income from operating activities of CHF 1,167 million for the first three months of 2012, an increase of 2% on the CHF 1,150 million of January-to-March 2011. In contrast to the prior year, however, SWISS incurred an operating loss of CHF 4 million for the period (compared to an operating profit of CHF 16 million for the first quarter of 2011). The negative result is attributable to continuing pressure on yields, the less-than-favourable currency exchange rate situation and the high price of fuel. “The market environment remains difficult, and the volatility in our industry has now reached unprecedented levels,” says SWISS CEO Harry Hohmeister. “And it was to counter these adverse influences and lay a firm foundation for our continued business success that we launched our results enhancement programme at the beginning of this year.” 
Earnings enhancements initiated 
SWISS has already taken a number of short-term actions to stabilize and improve its earnings in 2012. These include a freeze on new appointments to overhead positions and reviews (with a view to their reduction) of representational expenses and the costs of external consultants. These measures are being parallelled by SCORE Change for Success, the Lufthansa Group’s broader programme to permanently enhance bottom-line results through long-term structural improvements, in which SWISS is also actively involved. The current endeavours here include evaluating further opportunities to optimize capacity and generate additional revenues. 

Action has already been taken on the pricing front, too, in the form of slight increases to intercontinental fares. SWISS has also responded to the rising fuel prices by adjusting its fuel surcharges accordingly. 

Still-favourable load factors and on-time performance 
Some 3.61 million customers travelled on SWISS in the first quarter of 2012, a 5.1% increase on the 3.43 million of the prior-year period. The 37,391 flights operated were 1.2% more than the 36,956 of January-to-March 2011. Systemwide seat load factor for the quarter stood at 77.8%, an improvement of 1.4 percentage points on the 76.4% recorded for same period a year ago. 

Total capacity (in available seat-kilometres) systemwide for the first quarter of 2012 was a 2.6% increase on the 2011 period. Total traffic volume for the quarter (in revenue passenger-kilometres) was a year-on-year improvement of 4.5%. 

Despite the higher volumes of flights operated and passengers carried, SWISS again delivered a favourable performance for the quarter in punctuality terms. Some 82.7% of all flights left on time (i.e. within 15 minutes of their scheduled time of departure), which compares to 85.9% for the same period last year. The slight decline can be attributed to the impact on flight operations of a spell of prolonged cold weather in February 2012. 

The airfreight business of SWISS’s Swiss WorldCargo division saw a slight 0.6% year-on-year increase in its operating income for the period. Cargo load factor (by volume) slipped slightly, from the 81.1% of January-to-March 2011 to 80.5%. 
Tables with detailed figures are available in the attached PDF document. 

Fleet, product and network 
SWISS continues to invest in its product and aircraft fleet. The eleventh and twelfth of 15 new Airbus A330-300s were delivered in January and February, and a further A330 will follow in October. Two new Airbus A320s have also entered service since this spring. 
Network-wise, SWISS opened its 25th intercontinental destination, Beijing, in February, served non-stop from and to Zurich. Further recent network developments have included a new Geneva-Nice service and increased frequencies to London, Moscow and Madrid. 
On the product front, premium customers can now take advantage of a new SWISS Arrival Lounge at Zurich Airport which opened in April. The spacious and luxurious 700-square-metre lounge offers inbound travellers a wide range of services and facilities to relax, freshen up or work immediately after arriving at SWISS’s Zurich hub. 
Outlook 
The SWISS Management Board expects the air transport sector to remain volatile throughout 2012. “We see no sign at present of any imminent market recovery,” says CEO Harry Hohmeister. “And fuel prices and currency movements, too, are unlikely to offer us any better prospects any time soon.” 

Source: Swiss International Air Lines