Swiss is back to square one in its search for a global alliance, as it warns that its target of break-even for the current financial year will be missed.
The carrier decided to end its relationship with British Airways, drawn up by former chief executive Andre Dose, after deciding that the financial and commercial consequences of the plan to merge the Swiss frequent flyer programme with BA's was too much to bear. BA will, however, keep hold of the Swiss slots at London Heathrow that were a key part of the original deal for cash-strapped Swiss.
The impasse over the search for an alliance partner is clearly causing boardroom friction, with the carrier making it clear that the resignation of board member Andre Kudelski was due to disagreements over alliance strategy.
The carrier's chairman Pieter Bouw has said that "membership of an alliance remains a priority", but that no talks with Lufthansa have taken place. Lufthansa tried to tempt Swiss into the Star Alliance camp before the Zurich-based carrier decided to throw in its lot with BA in September last year. Commenting on the situation with Swiss, Lufthansa chairman Wolfgang Mayrhuber said: "Swiss closed the door, but the door is not locked." The new Swiss chief executive, Christoph Franz, is a former Lufthansa manager.
The urgency of the Swiss situation was underlined by a warning that it would fail to meet its target of breaking even this year, citing higher fuel costs and a failure to reach agreement on a cost-saving deal with maintenance firm SR Technics. Swiss sold its fuel hedges earlier this year to boost its cash reserves.
Swiss has so far failed to persuade shareholders, which include major Swiss banks and the Swiss government, to provide more cash. The carrier says that its cash reserves stand at "substantially above" SFr250 million ($200 million).
Source: Airline Business
