SWISS reports earnings before interest and taxes (EBIT) of CHF 460 million for the first nine months of 2017, a 32.0% increase on the same period last year. The EBIT was achieved on total income from operating activities of CHF 3.71 billion, a 4.0% year-on-year improvement. The substantial earnings increase is attributable to consistent cost management, the comprehensive fleet renewal and the company’s successful management of its aircraft loadings, which was reflected in the very high load factors recorded on both the passenger and the cargo front. A generally sound economic climate further buoyed results. SWISS expects to post an EBIT for 2017 as a whole that is an improvement on its prior-year level.
Swiss International Air Lines (SWISS) achieved earnings before interest and taxes of CHF 460 million for the first nine months of 2017, a 32.0% improvement on the CHF 348 million of the prior-year period. EBIT for the third-quarter period amounted to CHF 260 million, up 34.0% from the CHF 194 million of the same quarter last year.
SWISS reports an upward trend in its revenues, too. Total income from operating activities for the first nine months amounted to CHF 3.71 billion, a 4.0% improvement on the CHF 3.57 billion of January-to-September 2016. Third-quarter total operating income was up 5.0%, from the CHF 1.29 billion of 2016 to CHF 1.36 billion.
Fleet renewal and cost management improve economic efficiency
The positive trends are attributable to a number of factors including consistent cost management and efficiency gains from the modernization of the aircraft fleet. SWISS now has eight Boeing 777-300ERs on its long-haul network which have replaced Airbus A340-300 equipment, and eight Bombardier CS100s and four CS300s that have superseded its Avro RJ100s. The last Avro RJ left the SWISS fleet in August of this year.
The new aircraft have substantially enhanced the economic efficiency of the SWISS fleet, and this in turn has had a positive impact on operating costs. Earnings have been further improved by realigning the company’s maintenance infrastructure. With effect from April of this year, SWISS now performs all its A-Checks – routine maintenance inspections conducted every 800 to 1,000 flight hours – on its Airbus fleets in-house in Zurich or Geneva. The new maintenance policy has both increased flexibility and delivered corresponding cost benefits. “We have continued this year to consistently conduct the biggest fleet renewal programme in our history,” says SWISS CEO Thomas Klühr. “And in doing so, we have further strengthened our premium positioning within the airline sector.”
Load factors optimized
Results also benefited from a volume-driven increase in operating income on both the passenger and the cargo front. Thanks to a combination of stronger market demand and optimum capacity management, load factor on passenger flights was raised 1.7 percentage points for the January-to-September period, to 83.0% on average.
In view of its substantial efficiency gains and the sound economic environment, SWISS expects the present positive business trends to continue to the end of this year. And despite the fourth-quarter period being traditionally weaker in business terms, SWISS expects to report an annual EBIT for 2017 that is above its prior-year level.
Further product investments
SWISS intends to consistently further strengthen its premium-carrier positioning through continued investments. A new First Class Lounge with its own security checkpoint will open at Zurich Airport in the first quarter of 2018; and the second quarter of next year will see the opening of redesigned Business and Senator Lounges in the airport’s Terminal A.
The SWISS fleet will see further development, too. Two more Boeing 777-300ERs will arrive in the first half of 2018. The five remaining Airbus A340-300s will be provided with new cabin interiors next year. SWISS also plans to conclude the integration of its new Bombardier C Series fleet of ten CS100s and twenty CS300s by the end of 2018, by which time it will operate one of Europe’s youngest aircraft fleets.
SWISS also plans to introduce new products in Geneva in the fourth quarter of this year, to further enhance the travel experience for its customers on the ground. The new products form a key part of the airline’s “Geneva Reloaded” programme, which is designed to sustainably strengthen its competitive credentials in the Western Swiss market.