Due to the coronavirus pandemic and its unprecedented impact on the aeronautical industry, SWISS recorded an operating loss of CHF 84.1 million in the 1 st quarter of 2020 (Q1 2019: + CHF 48.3 million ).
Revenues decreased by 20% year on year, from CHF 1.15 billion in the first quarter of 2019 to CHF 923 million. Still in annual comparison, SWISS carried 21.4% fewer passengers and its seat occupancy coefficient (COS) fell by 5.3 points to reach an average of 73.3%. As the evolution of the situation remains very uncertain, it is impossible to forecast results for the whole of 2020.
The coronavirus pandemic practically paralyzed global civil aviation in a matter of weeks. It also had a considerable impact on the results of Swiss International Air Lines (SWISS). SWISS closed the 1 st quarter of 2020 with a loss of CHF 84.1 million (Q1 2019: + 48.3 million CHF). Following the collapse in demand and the reduction in capacity, revenue decreased by 20% to CHF 923 million (Q1 2019: CHF 1.15 billion). As the evolution of the pandemic remains very uncertain, it is impossible to forecast results.
Deprived of revenues from the sale of airline tickets, SWISS immediately took various cost-cutting measures. In particular, she resorted to partial unemployment throughout the company, the hiring freeze and the postponement of planned investments. SWISS will also adapt the size of its fleet by delaying the delivery of short and medium-haul aircraft on order. It is also considering the early withdrawal of older aircraft. The company has also asked the government for help in dealing with the liquidity drain.
Markus Binkert, Chief Financial Officer (CFO) at SWISS: “The company took immediate steps to cut costs as soon as it became apparent that the coronavirus pandemic was to continue. Thanks to the financial support of the Lufthansa group and the government aid guaranteed by the Federal Council, we will be able to face our cash flow difficulties. We will obviously do everything in our power to repay the loans taken out, plus interest, as quickly as possible. ”
Significant decrease in the number of passengers
The financial result is reflected in the passenger figures: SWISS carried a total of 2,991,974 passengers in the first three months of the year, down 21.4% on an annual basis. It flew a total of 27,270 flights, 19.2% less than in the first quarter of 2019. Its offer, expressed in seat-kilometers offered (SKO), decreased by 15.9% overall of its network of lines. Traffic, expressed in passenger-kilometers transported (PKT), fell by 21.5%. The seat occupancy coefficient (COS) reached 73.3% on average. The filling of planes thus lost 5.3 points in annual comparison.
Gradual resumption of air links
SWISS has offered a minimum flight schedule between March 23 and May 31: it has served a handful of European cities from Zurich and Geneva and operated three weekly flights between Zurich and New York / Newark (United States). From June, it will gradually expand its services in response to the relaxation of travel restrictions in Europe. Its objective is to offer 15 to 20% of the initial program in June.
Thomas Klühr, CEO of SWISS, explains: “We are going to step up our flight program in Zurich and Geneva. Our aim is to restore the direct intercontinental connections which are so important for the Swiss economy, politics, society and tourism. The recovery will take place gradually and will take two to three years. However, we will do everything in our power to ensure that passenger and freight traffic can be handled as efficiently as possible, given the circumstances. ” SWISS plans to extend its services during the summer. It will closely monitor changes in entry conditions and adapt its services to the needs of the Swiss population.
Expansion of cargo charter flights
In response to the strong demand for cargo flights, SWISS has strengthened its range of services through its air cargo division, Swiss WorldCargo. It has carried out almost 375 cargo flights since the end of March, mainly to support the supply chains of humanitarian and medical goods to and from Switzerland.
It also dismantled the economy class seats on board 3 of its 12 Boeing 777s in order to also use this space for freight transport.
On behalf of the Federal Department of Foreign Affairs (FDFA), SWISS also carried out numerous repatriation flights in March and April to ensure the return of Swiss citizens from remote regions of the world.