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Swiss International Air Lines to re-position itself

Travel News Asia 24 June 2003

Headed firmly for a turnaround, SWISS has said it is to take drastic action to cut costs: 34 aircraft are to be withdrawn from services and around 3000 jobs will be lost.

The new and massively reduced SWISS is reacting to far-reaching changes in the airline market: on intercontinental routes SWISS will offer its usual premium quality in three classes, whilst on European routes, passengers will in future be able to choose between alternative price and comfort levels themselves. In a meeting held on 23 June, the Board of Directors of Swiss International Air Lines approved the cornerstones of the new Business Plan. The essentials of the plan involve reducing the long-haul fleet to 18 aircraft, the medium-haul fleet to 21 and the regional fleet to 35. All in all, the number of seat-kilometres is to be cut by 35%. The changes will become effective on the 2003 winter timetable.

Premium on long-haul routes efficient and cost-effective in Europe

SWISS plans to offer both a Premium Business Class and an extremely competitively priced Economy Class on European routes. This in order to meet customer demands for competitive cost levels. By doing so, SWISS aims to allow its customers to select which  level of price-performance suits their individual requirements. The customer makes his or her choice, and pays only for what he or she actually wants. In the future, those who book Economy Class will have to pay for food and drinks. In Business Class, however, passengers can look forward to usual service.

This new European concept will supersede both the previous pricing structure and temporary promotions (e.g. Swiss Europe Savers) within Europe. All European flights will be sold at transparent prices with clearly defined services. Outward and inward flights may be mixed as desired (e.g. Economy Class outward, Business Class back) depending on departure times, time of booking, availability and the customers personal preferences. All European flights will be operated either by SWISS or by Swiss Express.

Measures on the way

The benchmark figures set out in the Business Plan provide for a reduction in costs totalling CHF 1.6 billion.

Network and fleet

 The airlines network will be trimmed by up to 35%. In line with this, there will  also be a substantial reduction in the number of destinations served from all SWISS locations in Switzerland. On the precise number and choice of destinations to be eliminated SWISS said it is informing first its partners but that the key markets will be maintained.

This reduction in destinations and frequencies will allow the airline to reduce its fleet to 74 aircraft (excl. Charter), retaining 18 aircraft in the long-haul sector (MD-11, A340, A330), 21 in the medium-haul sector (A320 family) and 35 in the regional sector (Saab, Embraer, Avro).

Job losses

SWISS said that the reductions in its network and fleet will inevitably mean corresponding job cuts, totalling around 3,000 redundancies. Around 700 cockpit jobs, around 850 cabin jobs and up to 1500 jobs on the ground are affected.

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