2023-08-03 08:54:50
Swiss overcomes the crisis with a record half year
In the first half of the year, Swiss posted one of the strongest results in its history.
Swiss has left the pandemic behind: its flights are better utilized again.
Photo: Valentin Flauraud (Keystone/Archive)
Not a trace of flight shame: After the corona pandemic, the Swiss have a lot of catching up to do after vacation trips. Swiss feels that too. Revenue in the first half of the year was back to the pre-crisis level, not least because of high ticket prices. Thanks to lower costs at the same time, the airline posted the highest half-year profit in its history.
Compared to the previous year, sales rose by almost 40 percent to CHF 2.5 billion. If you compare the last pandemic-free first half of 2019, sales remained practically constant. The airline has thus returned to the level it was before the corona pandemic. With the same turnover, however, she was able to significantly increase her profit. Operating profit rose to 338.3 million. That is almost 40 percent more than before the pandemic. Compared to the previous year, the operating profit even quintupled.
The ticket price thing
The reason for the higher turnover was not least the higher ticket prices that Swiss demanded. “Like the entire industry, we have also benefited from the fact that people’s demand for air travel continued to be significantly greater than the supply,” explained CFO Markus Binkert at a virtual media conference. This market constellation meant that fewer tickets were available at low prices, which in turn resulted in rising average revenues. The prices were an “important part” of the good result, he said.
In addition to the higher-priced tickets, lower costs also helped to ensure that more money remained in the cash register from this turnover. The airline saved on personnel costs, for example, and took restructuring measures.
It is the first half of the year since the beginning of the Corona crisis in which Swiss has been able to return to its usual level or even significantly exceeded it. With the onset of the pandemic, sales plummeted from one day to the next, and the company posted hefty losses quarter after quarter.
According to the announcement, those responsible expect “the positive trend from the second quarter to continue”. The airline should therefore also be heading for one of its strongest results for the year as a whole.
Even if people are now flying on vacation almost as often as before the pandemic, Corona is still leaving its mark on business trips. This segment is still far from the old level, Binkert explained. Swiss currently only achieves around 60 to 70 percent of the pre-crisis level for business flights. The chief financial officer does not expect this to change fundamentally in the foreseeable future. “In the short term, we won’t get to 100 percent,” he said.
“On the other hand, we see a lot of demand for vacation trips,” said Binkert. The planes are well utilized. However, flight operations remain a challenge on the passenger side, he said. A high level of flight stability was achieved in the first half of the year. In other words: 98 percent of the planned flights were carried out on the planned day. “But when it comes to issues like punctuality, we’re not where we want to be,” said the chief financial officer.
However, this is a problem in the entire industry and has to do to a large extent with the weather and air traffic control, for example in France or Germany, where there are sometimes capacity bottlenecks. “Half of all delays are due to problems with air traffic control,” he said.
Strikes cost a mid double-digit million sum
This also affects the costs at Swiss, because if passengers miss their connecting flights, for example, or flights are canceled or heavily delayed, the airline has to pay compensation or take on hotel stays.
Strikes – these have recently occurred in Italy, France and also at Geneva Airport – have also led to delays, said Binkert. In addition, strikes would have cost Swiss a mid double-digit million sum, i.e. between 40 and 60 million francs. “The result could have been even better if it hadn’t been for these costs.”
Flights better utilized
According to Swiss, 7.5 million passengers were transported in the first half of the year. That is 41 percent more than in the previous year. The company also carried out 30 percent more flights to a total of 61,000. The so-called available seat kilometers increased by 36 percent, while Swiss sold 54 percent more seat kilometers.
As a result, passenger numbers rose faster than flights, which led to higher aircraft occupancy rates. According to the announcement, the average seat load factor was 83.3 percent, which is 9.6 percentage points more than in the previous year.
For the year as a whole, Swiss wants to continue to offer 85 percent of the flight capacity (measured in terms of available seat kilometers) that it offered before the pandemic. This number is expected to increase further in the coming year.
SDA/fal
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