SWISS posts CHF 137m operating profit for the third quarter

Swiss International Air Lines achieved an operating profit of CHF 209 million for the first nine months of 2013, a 13% improvement on the same period last year. For the third quarter of 2013 SWISS posted an operating profit of CHF 137 million, a 10.5% increase on the prior-year period.

SWISS generated total income from operating activities of CHF 3,905 million in the first nine months of 2013, a 2.4% increase on the CHF 3,814 million of the prior-year period. Nine-month operating profit amounted to CHF 209 million, a 13% improvement on the CHF 185 million of January-to-September 2012.

For the third quarter of 2013 SWISS reports an operating profit of CHF 137 million, a 10.5% increase on the CHF 124 million of the same period last year. The result was achieved on total third-quarter income from operating activities of CHF 1,389 million, which was up 2% from the CHF 1,363 million of Q3 2012.

“Our overall business parameters and the general market situation remained challenging throughout the third quarter,” says SWISS CEO Harry Hohmeister, commenting on the results. “These latest financial figures do reflect our endeavours on both the cost and the revenue front; but we haven’t achieved the turnaround yet.”

The third-quarter period was characterized in particular by continuing adversities on the currency front, especially in Asia. The situation was further exacerbated by a weakening in demand in both the business travel and the air cargo sectors.

Various further factors also put greater pressure on SWISS’s 2013 third-quarter results than had been felt in the same period last year. These included strike actions within Europe and the present political tensions in the Middle East. After renewed increases in the wake of the Syria crisis, fuel prices declined slightly again in the course of the third-quarter period.

On a regional basis, SWISS’s North Atlantic business showed particularly encouraging trends. Business in Asia, by contrast, was weaker than expected owing to currency and competition factors.

New Geneva business model well received by the market
The new and more flexible one-way fare structure which was adopted on 1 September for services from Geneva has been welcomed by the market. SWISS has already seen a substantial improvement in the corresponding business: seat load factors have been rising, and the region has witnessed double-digit-percentage passenger volume growth over the past few months. Mid-October saw the commencement of the first training course for new locally-based flight attendants, whose attendees will begin their duties in November. A total of 150 new cabin crew members are due to be recruited and trained for service from Geneva between now and September 2014.

Passenger numbers stable; load factors continue to rise
SWISS transported a total of 12.2 million travellers in the first nine months of 2013, 1.1% more than in the same period last year (Q1-3 2012: 12.06 million). The period saw a 2.9% reduction in total flights performed, from the 114,103 of the prior-year period to 110,831. Nine-month systemwide seat load factor showed a slight improvement, from 83.5% to 84.4%. Cargo load factor (by volume) declined 0.7 percentage points to 78%, while total cargo sales for the period were a 2.9% improvement in revenue-tonne-kilometre terms.

In the third-quarter period SWISS carried 4.43 million passengers, up 1.6% on the 4.36 million of July-to-September 2012. The 37,932 flights performed were 2.3% down on the 38,834 of Q3 2012. Systemwide seat load factor was improved 0.2 percentage points from 87.7% to 87.9%. Cargo load factor (by volume) slipped 0.9 percentage points, while total cargo sales were raised 3.6%.

Fleet, product and route network
The new Bombardier CS100 aircraft which SWISS has on order completed its first flight in Montreal, Canada on 16 September. SWISS is launching customer for the new CSeries, which will gradually replace its current Avro RJ100 fleet from early 2015 onwards. 2016 will bring the delivery of six new Boeing 777-300ERs to begin the replacement of SWISS’s present Airbus A340 fleet.

The first quarter of 2016 will see the delivery of a fifteenth Airbus A330-300 to complete the A330 fleet and a further Airbus 321. Any fleet expansion beyond the renewals already planned will be contingent on future market trends.

SWISS added the Ukrainian capital of Kiev to its network on 27 October, served by a new daily service from and to Zurich. Service was also introduced on the Geneva-St. Petersburg route at the end of July; and the 2013/14 winter schedules see six further destinations including Stockholm, Oslo and London (Gatwick) added to the SWISS Geneva-based network.

SWISS was named “Europe’s Leading Airline Business Class” once again at the end of August in this year’s World Travel Awards. This is the third year in succession and the fourth time since 2005 that SWISS has earned this distinction.

Personnel
SWISS employed 8,184 personnel at the end of September (Q3 2012: 8,037) or 6,941 in full-time-equivalent terms (Q3 2012: 6,776 FTEs). The company created some 150 new jobs in the first nine months of the current year.

SWISS’s management and its cockpit staff associations brought their negotiations on future working structures and a combined pilot corps to a conclusion at the end of October. The talks had been centred on integrating the Swiss European and Swiss International pilot corps, introducing the new Bombardier CS100s and Boeing 777-300ER, safeguarding SWISS’s competitive edge and securing jobs in the longer term and establishing the new Geneva cockpit crew base.

On the basis of this accord modifications to the collective labour agreements will be devised from now on until the end of the year. These will then be submitted to the associations’ members for approval. The current aim is to have the company’s collaboration with its entire pilot corps subject to the new long-term working provisions from next April onwards.

Outlook
SWISS expects to achieve an operating result for 2013 as a whole that is a slight improvement on last year’s in Swiss-franc terms. This will, however, depend on further developments in fuel prices and the political situation in the Middle East.