Swiss International Air Lines (SWISS) generated total revenue of CHF 2.36 billion for the first six months of 2017, a 3% increase on the same period last year (H1 2016: CHF 2.28 billion). First-half earnings before interest and taxes or EBIT amounted to CHF 200 million, a 31% improvement on the prior-year period (H1 2016: CHF 153 million). The substantial EBIT increase is attributable in particular to efficiency gains deriving from the current fleet renewals. First-half earnings were further boosted by larger traffic volumes and resulting higher revenues on both the passenger and the cargo front. SWISS expects to report a full-year EBIT for 2017 that is an improvement on the prior-year result.
SWISS has posted strong 2017 first-half results. Earnings before interest and taxes (EBIT) for the period were raised 31% to CHF 200 million (H1 2016: CHF 153 million). The improvement was achieved on total revenue of CHF 2.36 billion, a 3% increase on the prior-year period (H1 2016: CHF 2.28 billion).
Advanced new aircraft enhance efficiency levels
The positive results trends are attributable above all to efficiency gains deriving from the current modernization of the SWISS aircraft fleet. The company has now received and deployed nine Boeing 777-300ERs to replace Airbus A340-300s on its long-haul services, and has ten Bombardier C Series aircraft – eight CS100s and two CS300s – in service on its short-haul network, where they have replaced the Avro RJ100.
With their state-of-the-art engine, systems and materials technologies, the two new aircraft types offer substantially-improved operating economics, which are having a correspondingly positive impact on cost structures. SWISS’s first-half earnings were also boosted by higher traffic volumes, and thus increased revenues, in both its passenger and its cargo business. Systemwide seat load factor for the first six months of 2017 stood at 80.6%, a 2.1-percentage-point improvement on the prior-year period.
A successful second quarter
SWISS saw a continuation of the positive earnings trends of the first quarter of 2017 in the second three months of the year. Second-quarter EBIT amounted to CHF 163 million, a 24% improvement on the prior-year period (Q2 2016: CHF 131 million). Second-quarter revenue was also up 4% at CHF 1.26 billion (Q2 2016: CHF 1.21 billion).
“We can be very satisfied with our first-half business performance, which shows that our investments in our fleet are really reaping their rewards,” says SWISS CEO Thomas Klühr. “To further strengthen our market position,” he continues, “we will continue to consistently develop and refine our products and services both in the air and on the ground, together with our partners in the Lufthansa Group. And we will be working harder than ever to offer our customers the added value they seek from us a premium carrier.”
Outlook
The market environment is set to remain challenging, primarily in view of the strength of the Swiss franc and projected oil price trends. But SWISS is confident of offsetting the negative impact of these factors on its earnings results, and expects to report an annual EBIT for 2017 that is an improvement on the previous year.
Present strategy to be further pursued
SWISS will continue to invest in its premium air travel product, both in the air and on the ground. Coming enhancements here include a new First Class Lounge in Zurich with its own security checkpoint and the modernization of its top-customer lounges in the airport’s Terminal A.
The current fleet renewal will remain a prime focus, too. Two further Boeing 777-300ERs will be delivered next year, while the five remaining Airbus A340-300s will be provided with a new cabin product in all three seating classes.
The first SWISS Bombardier CS300 entered service from its Geneva operating base in May, and was joined by a further CS300 in July. All 30 of the new Bombardier C Series aircraft – ten CS100s and twenty CS300s – will be delivered and in service by the end of next year, giving SWISS one of Europe’s most advanced aircraft fleets.