Swiss boasts it has reached “cruising altitude”

Swiss's operating profit more than doubled in 2007 Oberhauser

Swiss International Air Lines reported on Wednesday that it more than doubled its operating profit in 2007.

But a leading aviation analyst told swissinfo that a lack of detailed information meant it was hard to draw any firm conclusions about the financial health of Switzerland’s former national carrier.

Swiss’s earnings before interest and taxes (EBIT) rose from SFr231 million ($225 million) in 2006 to SFr571 million last year. Total income from operating activities in 2007 totalled SFr4.895 billion, a 17.9 per cent increase.

“Because [Swiss] doesn’t provide the level of detail it used to when it was a separate airline and not part of Lufthansa, it’s quite difficult to see exactly where it is getting cost savings and whether its yield is going up and so on,” Peter Morrell, an aviation economist at Cranfield University in Britain, told swissinfo.

Morrell suspected this was because now Swiss was part of German Lufthansa and that there was no requirement to break the figures down to reveal the “bottom line” net profit.

Nevertheless, he said at the operational level Swiss appeared to be flying in the right direction.

“They’ve got their cost base under control, which was always one of their problems in the past. They’ve also got some good premium business markets as Switzerland is the base for many big multinational companies. In cooperation with Lufthansa Swiss have managed to exploit those extremely well and keep costs under control.”

He added: “The fuel cost impact was probably greater in the past two years than recently, although it’s gone up very recently. The weak dollar is another factor that would have helped in terms of moderating their costs – and quite a lot of costs in the airline industry are in dollars.”

“Encouraging performance”

In a statement on Wednesday, Swiss CEO Christoph Franz said the company had secured its “competitive position”.

“Swiss reached its cruising altitude in 2007 and continued its course of profitable organic growth that is carefully tailored to market demand,” he said.

“This encouraging business performance is attributable primarily to our high revenue levels, from both our passenger transport activities and our Swiss WorldCargo operations.”

Swiss said it had carried 12.2 million passengers in 2007, up 13.2 per cent on 2006.

It also created just under 700 new jobs. At the end of 2007 the Swiss workforce totalled 6,022 full-time employees, 12.8 per cent more than at the end of 2006.

swissinfo, Thomas Stephens

In brief

Swiss International Air Lines was born in 2002 from the remains of bankrupt Swissair and the regional carrier Crossair.

The struggling Swiss was in turn taken over by Germany’s Lufthansa in 2005.

Lufthansa initially bought an 11% stake in Swiss in March 2005 and increased this share to 49% in 2006 once regulatory approval had been granted. It took over all the shares in July 2007.