SWISSAIR HAS HANDED over its regional-jet operations to its Crossair subsidiary. In a second strategic move, Swissair and Crossair will absorb the loss-making charter flights of Balair/CTA - effectively ending the latter's operations. Both moves are aimed at cutting costs and restoring group profitability.
By the end of the year, Crossair will be operating all Swissair services involving aircraft of up to 100 seats. Swissair wants a single aircraft type for this segment and, if a group management recommendation is accepted at a Swissair board meeting on 29 March, the company will withdraw its fleet of ten Fokker 100s over the next 18 months and replace them with 12 new British Aerospace Avro RJ 100s.
Crossair already operates four RJ 85s and two BAe 146s - the latter will be returned when their lease expires in 1996.
Fokker claims that a package consisting of ten new Fokker 100s and six Fokker 70s for Crossair will also be considered at the 29 March meeting.While not directly contradicting Fokker, Swissair says: "In our opinion, a decision in favour of the RJ has already been taken." The airline however, declines to comment on whether it would consider any new bid from the Dutch aircraft maker.
Swissair says that the Fokker 100 fleet "...had accounted for a disproportionately high share of the losses we have sustained on our European routes over the last few years". Fokker points out, however, that it was unlikely that any regional jet could have generated profits, given Swissair's high cost structure and the three-class configuration, which cut capacity to 85 seats.
If the Avro deal goes according to plan, the company will deliver four RJs this year and a further eight in 1996. An option of 12 more RJs is also a possibility. Swissair hopes that, with the substantially lower cost base of Crossair, the regional operations will help Swissair take a step towards its goal of improving its group annual result by SFr500 million ($396 million) by 1997.
Balair/CTA's long- and short-haul charter routes will be handed over to Swissair and Crossair respectively. Swissair will take over two of the charter company's Airbus A310s - with the third being sold or deployed on Swissair scheduled routes. Crossair will take over Balair/CTA's eight McDonnell Douglas MD-82s and -83s.
According to Crossair executive vice-president commercial and finance Thomas Hofmann, Balair/CTA "...will probably still exist after the restructuring, but not as an operating airline". Hofmann says that the take-over of Balair/CTA operations will raise Crossair's charter income, from some 6%, to as much as 30% of turnover.
Crossair cockpit personnel receive salaries some 40% lower than those of Balair/CTA, says Hofmann, and the difference is even greater compared with Swissair salaries. He adds that cockpit salaries play a particularly significant role in operating costs of smaller aircraft and that Crossair pilots are more productive, flying some 750h per year against Swissair's 400h.
Source: Flight International
