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Published on : Thursday, July 30, 2015
Swiss International Air Lines (SWISS) generated total income from operating activities of CHF 2,441 million in the first six months of 2015, some 3% down from the CHF 2,523 million of the same period last year. The fall was due largely to continuing competitive pressures – especially in the Swiss home market and throughout Europe – and the associated yield declines. First-half revenues were also depressed by the strength of the Swiss franc against other currencies.
On a brighter note, fuel procurement activities felt the strong benefit of lower oil prices in the first-half period. And earnings were further boosted by the 360-odd actions that have now been launched on both the cost and the revenue side within the Lufthansa Group’s SCORE earnings enhancement programme. A total of 167 such actions had been adopted and concluded by the end of June, of which those designed to raise fuel efficiency and to expand Geneva market share remain some of the most important.
Thanks to these and further factors, SWISS reported first-half earnings before interest and taxes (EBIT) of CHF 214 million for the first half of 2015, a substantial improvement on the CHF 114 million of the same period last year.
Second-quarter EBIT raised to CHF 163 million
Market conditions remained challenging in the second-quarter period. At CHF 1,247 million, total operating income for the period was 6% down on the CHF 1,332 million of April-to-June 2014. Second-quarter EBIT was improved, however, from CHF 115 million to CHF 163 million. “These earnings results confirm to us that we are on the right track,” says SWISS CEO Harry Hohmeister. “But we still need to make our organization and our processes even more efficient, both within SWISS and throughout the Lufthansa Group, to make ourselves even more dynamic and responsive for the months and the years ahead.”
Stable load factors and passenger volumes
SWISS transported a total of 7.778 million travellers in the first six months of 2015, which was 0.6% more than the 7.735 million of the prior-year period. Some 0.9% fewer flights were operated: 70,870, compared to 71,518 in January-to-June 2014. But systemwide capacity was still raised by 1.4% in available seat-kilometre (ASK) terms.
Total traffic volume (measured in revenue passenger-kilometres or RPKs) was up 0.9%. Systemwide seat load factor declined accordingly, falling 0.4 percentage points from 81.7% to 81.3%. Airfreight division Swiss WorldCargo saw a 1.7% decline in its revenue tonne-kilometre sales and a 3.1-percentage-point fall in its cargo load factor (by volume).
For the second-quarter period, systemwide ASK capacity was raised 0.8% year-on-year while total RPK traffic volume suffered a slight 0.1% decline. Systemwide seat load factor saw a corresponding 0.8-percentage-point decline to 83.6%. Cargo sales for the quarter fell 5.0%, while cargo load factor was 4.4 percentage points below its prior-year level.