Swiss scythes fleet, jobs; blames “structural market change”

Swiss (LX, Zurich) has announced sweeping restructuring plans in response to what it called “structural changes in its markets”, cutting its fleet by a projected 15% and potentially also entailing “forced dismissals for up to 780 ground and flying personnel,” it said in a statement on May 6. Despite receiving loan guarantees from the Swiss government worth CHF1.275 billion Swiss francs (USD1.4 billion) last year to help it cope with the impact of Covid-19 on demand for air travel, the Lufthansa subsidiary said it now had to align itself with a 20% decline in demand over the medium term. Last week, the airline admitted that passenger numbers were down 90.4% in the first quarter of 2021 year-on-year, with 83.8% fewer flights, resulting in a CHF201 million (USD221 million) operating loss. “It has grown increasingly clear that our market is undergoing structural change, and that despite the actions which we were swift to take in response, a restructuring of our company now sadly seems unavoidable,” said chief executive Dieter Vranckx. Adding that the corporate resizing should achieve “sustainable overall cost savings” of around CHF500 million (USD550 million), Vranckx stressed: “Our aim is to repay our bank loans as promptly as possible and to sustainably retain our competitive credentials and regain our ability to invest.” Swiss clarified that it was likely to retrench its fleet by 15% from its size in 2019, so that its short-haul and medium-haul fleet will be downsized from 69 to 59 aircraft through the withdrawal of Airbus A320 Family equipment and through a reduction in the number of E190-E2s it wet-leases in from of Helvetic Airways (2L, Zurich). On the long-haul front, it plans to reduce its fleet from 31 to 26 aircraft by “withdrawing five of its long-haul Airbuses.” According to the ch-aviation fleets advanced module, Swiss currently operates 98 aircraft including seven Helvetic Airways Embraer jets. Its widebodies consist of fourteen A330-300s and five A340-300s plus twelve B777-300(ER)s. The remainder encompasses nine A220-100s, twenty A220-300s (with one to be delivered), eighteen A320-200s, three A320-200Ns (with fourteen to be delivered), five A321-100s, three A321-200s, and two A321-200NXs (with six to be delivered). Frequencies will be cut from their 2019 levels, while “services may not yet be restored at all on a few direct intercontinental routes.” Swiss had already planned to cut its 9,500-strong workforce by 1,000 by the end of 2021 through staff turnover and voluntary redundancies. The cuts of up to 780 employees are additional to these numbers.