ALEXANDER CAMPBELL / ZURICH
American Airlines tie-up prepares the way for alliance membership and upgrade of long-haul fleet
Swiss, the new incarnation of the collapsed Swissair and its sister regional carrier Crossair, launched operations on 1 April with anew partnership with American Airlines as the first step towards joining the Oneworld alliance. It will also upgrade its long-haul fleet.
However, financial difficulties and labour disputes are still in evidence, and the industry's continuing downturn means that chief executive Andr‚ Dos‚ expects low yields for the next year at least.
The alliance with American Airlines is awaiting approval from the US Department of Transportation. However, Dos‚ expectscodesharing permission within the next few weeks, leading to a grant of antitrust immunity by the fourth quarter.
The partnership is intended to lead to Swiss full accession to the American and British Airways-led Oneworld alliance. However, before this can happen, the new airline will have to sign bilateral agreements with all the alliance members - Dos‚ says this is taking longer than expected. The need to win agreements with every Oneworld airline could well delay membership until after the start of the winter timetable, meaning that Swiss would not obtain the full benefits of alliance membership until spring 2003.
The airline inherited 52 aircraft from its now-defunct parent Swissair under the Phoenix Plan, including 13 of the airline's 19 Boeing MD-11s. These aircraft are on 18 month leases from the banks which own them, and will be replaced over 12 months by 13 new Airbus A340-300s from June 2003. Efforts to resurrect an earlier deal to sell the entire MD-11 fleet to FedEx Express continue.
Swiss turned down an offer from Boeing of ex-Singapore Airlines A340-300s, which would have cost around SFr6 million ($3.6 million) each to convert to Swiss standard, and also rejected the 777-200ER. The former Crossair Avro RJs and Saab 2000s will gradually be replaced by Embraer ERJ-145s, 170s and 195s over the next four years.
While Swiss has managed to get higher passenger numbers than it expected in its original business plan, this has been possible only by dramatic fare cuts. Yields, as a result, are 20% below 2000 levels, and likely to remain low for at least the next 12 months.
With other airlines adopting elements of the successful low-cost strategy, Swiss stands out. It plans to improve inflight services and increase seat-pitch in all classes; it still describes itself as "the highest-quality offer in Europe".
Offering this standard of service means that yields will have to increase correspondingly - and while the current downturn means that fleet expansion is unprecedentedly cheap, Swiss will be going against the trend if it can make a high-quality service profitable by its target of the end of next year.
Source: Flight International
