Swiss “gratified” at speed of job cuts

Swiss said its restructuring plans are on the right track (Swiss) Source: Swiss

Switzerland’s national airline, Swiss, has hit back at its critics by issuing an upbeat assessment of its efforts to cut losses and shed thousands of jobs.

The carrier has also denied widely publicised claims that it is considering the possibility of bankruptcy protection.

Swiss is in the middle of a restructuring plan that includes the sacking of a third of its 9,000-strong workforce as well as a drastic reduction in its fleet.

“The implementation of the measures which Swiss announced on June 24 are proceeding more efficiently and faster than planned,” a company statement said.

“This progress will create new trust in the employees and above all, in the Swiss clients,” it added.

Swiss has struggled to maintain investor and consumer confidence ever since launching last year following the collapse of Swissair in late 2001.

Analysts believe the airline is losing at least SFr2 million ($1.46 million) per day, mostly on unprofitable routes hit by the slump in global aviation.

In search of friends

Swiss recently won backing for its plan, dubbed by management as the “Foundation for Winning”, from key unions representing sacked staff.

By shedding staff and cutting costs, Swiss hopes to recast itself as a leaner airline capable of tackling competition from low-cost carriers such as easyJet.

Markets have reacted positively to Swiss’s new business plan, which was finalised by the carrier’s board on Monday. Shares in the company have surged to around SFr12 from a 12-month low of SFr2.55.

The airline has also appointed the British bank Barclays to help it raise SFr500 million in cash to keep flying.

Last week, Barclays issued a hopeful assessment of Swiss’s chances of raising the funds, which are urgently needed if the airline is to avoid insolvency under Switzerland’s corporate laws.

The airline’s management has also been stepping up efforts to secure an alliance with either Lufthansa or British Airways.

In recent days, Swiss newspapers published unconfirmed claims that the airline could be sold to the German carrier, Lufthansa.

The airline is also at the centre of speculation that it may be close to achieving its long-held ambition of joining the Oneworld airline alliance, which includes British Airways.

On Monday, Swiss newspapers reported that CEO André Dosé travelled to London last week where he received a “verbal invitation” from BA to join.

Spinning hope

Analysts believe an alliance with a larger partner would help Swiss survive by allowing it to fly profitable routes that link it to a bigger network.

However Sepp Moser, an aviation expert, told swissinfo that neither airline would join with Swiss unless it cut its own intercontinental network.

“These two airlines have both communicated clearly that they are not interested in Swiss,” he said.

Moser said Swiss’s claims of being “on the right track” had to be taken with a pinch of salt.

“Whatever Swiss disseminates is decided upon not by facts but by spin doctors,” Moser said.

Moser said the carrier’s recovery depends on the precarious global economy.

“What we can say is that they don’t have enough money to stay alive for more than a couple of months,” he said.

Bankruptcy claim

Swiss was last week hit by a flurry of newspaper reports that suggested its management was considering the prospect of bankruptcy.

The airline’s board on Monday dismissed the claims.

“The rumours spread by some media on the possible bankruptcy did not form a part of the scenarios examined [by the board on Monday],” the Swiss statement said.

swissinfo, Jacob Greber in Zurich