SWISSAIR IS TO shed 1,600 jobs over the next 18 months in an effort to pull its flight operations back into profit. The Swiss carrier says it also plans to renegotiate pilot contracts.
The airline hopes that the majority of the job losses, which represent around 10% of the airline's workforce, will come through natural wastage, but it will make provisions for up to 400 early retirements and 300 redundancies. The cuts will come from the parent Swissair airline and its Balair/CTA holiday charter subsidiary.
Provision has also been made to help redundant employees in finding new work and to pay them a reduced salary during the transition period.
The job losses are just part of a group-wide "re-engineering" designed to add up to SFr700 million ($350 million) to the bottom line from 1997 onwards. The improvement, based on the 1993 financial performance, will be through a mix of cost cutting and revenue growth says Swissair.
The group has already announced a major shake-up of its fleet as part of the restructuring effort, under which Crossair is to take over 100-seat jet operations based around the Avro RJ while Swissair standardises on an Airbus narrow body fleet for its European operations. Swissair adds that while it cuts jobs, Crossair will be adding around 500 staff.
Among other measures, Swissair promises new promotional fare sales, slicker ramp maintenance and the hiving off of its information systems division into a separate company.
The restructuring plan was announced as the group revealed that its net losses had worsened to SFr86 million for the first half of 1995. Swissair has traditionally shown losses at the half-way mark, but warns that the full year result is expected to be no better than the modest SFr23 million profits reported for 1994.
The group blames much of the poor performance on the strength of the Swiss franc, which ravaged the airline's foreign currency sales and pushed up costs.
As a result, yields plummetted by 11%, leaving air-transport operations showing a slump in revenue, despite a 9% growth in traffic. Unit costs were cut by only 6%.
Source: Flight International
