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Published on : Thursday, March 17, 2016
Swiss International Air Lines (SWISS) achieved an operating profit of CHF 453 million for 2015, a 34% improvement on the previous year and the third-best operating result in the company’s history. With market conditions still challenging and fares continuing to fall, total annual income from operating activities suffered a 3.5% decline to CHF 5,035 million . Operating profit for the fourth quarter of 2015 amounted to CHF 52 million, 39% down on the prior-year period. The decline is primarily attributable to non-recurring items which had boosted fourth-quarter operating profit in 2014. Total fourth-quarter income from operating activities amounted to CHF 1,212 million, a 6% decline .
SWISS performed well in its markets in 2015 and raised its annual operating profit (adjusted EBIT) by 34% to CHF 453 million , the third-best operating result in the company’s history. Key contributors to the favourable operating result included the vigorous pursuit of the “Next-Generation Airline of Switzerland” strategy, under which SWISS continued to invest in its fleet, product and services, particularly in its Business Class product, whose quality was substantially further enhanced. The company’s consistently load-factor-driven capacity management and its continued actions under the Lufthansa Group’s broader SCORE results enhancement programme also impacted positively on earnings, as of course did the low oil price.
Total annual income from operating activities, by contrast, suffered a 3.5% decline, standing at CHF 5,035 million for the year (2014: CHF 5,219 million). Operating income was depressed by the still-high competitive pressures and the resulting yield declines. And revenues were further eroded by the Swiss National Bank’s abolition in January of its previous minimum Swiss franc/euro exchange rate.
“SWISS is well positioned and equipped, and this enabled us to respond successfully to the high competitive pressures,” says CEO Thomas Klühr. “But the challenges of last year will also accompany us throughout the year ahead. This is why we will align ourselves even more closely with our partners within the Lufthansa Group, to even better meet our customers’ needs and tap further synergic potential.”
Operating profit down for the fourth-quarter period
Total income from operating activities for the fourth quarter of 2015 amounted to CHF 1,212 million, 6% down on the prior-year period (Q4 2014: CHF 1,296 million). Fourth-quarter operating profit fell 39% to CHF 52 million (Q4 2014: CHF 86 million). The lower operating profit is largely attributable to the non-recurring effect of the release of provisions and a change to mileage valuations in the fourth quarter of 2014, both of which had a positive impact on the period’s earnings results.
SWISS is well positioned and equipped, and will continue to realign its organization and processes as part of the broader drive to sustainably enhance the competitive credentials of the Lufthansa Group. The competitive environment will remain extremely challenging. And SWISS is also strongly affected by oil price trends and currency movements. In view of this and of Swiss-franc exchange rates in particular, SWISS expects to report an operating profit for 2016 that is slightly below its prior-year level.
Source:-Swiss International Air Lines