Low-cost airlines circle for Swiss cast-offs

Low-cost airlines such as Intersky are expanding their Swiss operations. Intersky

A leading aviation entrepreneur has announced plans to launch a new domestic airline, just days after the national carrier Swiss said it would ditch most of its internal routes.

Moritz Suter, well known in Switzerland as the founder of Crossair, said he would start with regular services between Geneva and Lugano.

The new airline will begin offering three flights per day from October 28 on a Saab 2000.

The move follows last week’s announcement by Swiss that it will reduce its number of destinations by 25 per cent, in order cut costs and stem daily losses of more than SFr2million ($1.46 million).

As part of wide-ranging cuts to its European and intercontinental services, Swiss said it would also drop loss-making services to Geneva, Lugano, Basel and Bern.

Experts are now debating whether Swiss has opened the door to a new generation of low-cost carriers.

Suter is the first to stake a direct claim on what was a traditional domestic route for the country’s national carrier.

Tax break

However, he will only launch the airline if he wins tax concessions from the Ticino cantonal government – including landing fees in Lugano of only SFr1 per flight, rather than the current SFr450 rate.

“We need very, very low costs, otherwise we can’t do it,” Suter said on Thursday.

In return, the airline could offer return tickets between Lugano and Geneva for as low as SFr195. The current price for a seat on Swiss is SFr640.

Guido Broschi, the Lugano transport minister, welcomed the move but said any tax exemptions would need to be cleared by the canton. He said a decision on Sutter’s request would be made within days.

Suter also hinted that he might expand the new airline to other Swiss cities.

“You always start with one route,” he said.

Hunt for alternatives

Faced with losing Swiss, many of Switzerland’s smaller airports are now battling to find new business.

On Tuesday, the city of Geneva called for a nation-wide solution to the loss of Swiss on domestic routes.

One of the hardest hit airports, outside the capital Bern, will no longer have any Swiss flights after autumn.

However, there are signs that alternative business-models could yield profits.

Intersky, a low-cost Austrian carrier recently established a “hub” in Bern for flights to Germany.

Renate Moser, who heads the fledgling airline, has been generating a steady profit by offering fast, no-frills services.

Another low-cost upstart, Germanwings, has plans to expand its presence in Switzerland.

Starting in autumn, the airline will create a “second hub” in Zurich – after Cologne in Germany – from where it will fly to 18 European destinations.

Germanwings hopes to draw former Swiss customers by offering flexible flights between key cities – such as Zurich and Cologne – for fares as low as €19 (SFr29).

Finding new passengers

Oliver Sutton, from the Geneva-based aviation publication Interavia, said the jury was still out on whether low-cost carriers would succeed in Switzerland.

“It’s a question of passenger flows,” Sutton told swissinfo.

“Up to now, people have been shovelled through big hubs, but if you can identify 30,000 passengers between Basel and Kiel (in northern Germany), then it could take off.”

Sutton said airports around Europe were busy working on building “city pairs”, links between what were once considered un-profitable routes.

One example is the popularity of Easyjet’s services into Geneva from eight different cities, most of them on routes long ignored by traditional network carriers.

Aircraft builders such as Boeing are also tapping into the low-cost, “short-hop” business model.

The company predicts substantial sales growth for its fleet of smaller, regional-style planes.

swissinfo, Jacob Greber in Zurich

In brief

Moritz Suter, an aviation entrepreneur, wants to launch a new domestic airline.

The airline will use a Saab 2000 between Geneva and Lugano.

He hopes to take off on October 28, offering three flights per day for around SFr195.

Suter has asked the canton of Ticino for tax relief, such as SFr1 landing fees in Lugano.

The move follows a decision by the national airline Swiss to ditch most of its domestic services.