MIAMI – As a result of the Coronavirus pandemic and its impact on the aviation industry, Swiss Air Lines (LX) has announced that it has incurred an operating loss of US$87.4m (CHF84.1m) for Q1 2020.
With reduced capacity and demand for air travel, Swiss’ first-quarter total revenue declined to US$959.6m (CHF923m), a decrease of 20% compared to this time last year (Q1 revenue in 2019 was reported at US$1.2bn [CHF1.15bn]).
Swiss immediately responded to the loss of ticket revenue by putting in place a range of cost-reducing actions. These have included the companywide adoption of short-time working and a freeze on hiring.
The airline has also taken the decision to defer planned investments and the deliveries of short and medium-haul aircraft that are currently on order.
The carrier is also further considering withdrawing old aircraft earlier than planned. Additionally, LX sought government support to avoid the still-present threat of temporary insufficient liquidity.
Chief Financial Officer, Markus Binkert, said that once it was clear that the coronavirus pandemic is longer an issue, the airline will take “immediate action to reduce our costs”.
These measures, along with the financial support from the Lufthansa Group and the loan guarantees provided by the Swiss Confederation “will enable us to bridge any liquidity gap”.
Reduction in Passenger Numbers
Swiss’ passenger numbers for Q1 follow the same pattern as that of the financial report. LX reported having carried 2,991,974 passengers in the first three months of 2020, which is a 21.4% decline from the passenger numbers for the same period last year.
Also, a total of 27,270 flights were operated (19.2% fewer than in Q1 2019. LX’s systemwide production (measured in available seat kilometers) was down by 15.9% on its prior-year level.
finally, the total traffic volume (measured in revenue passenger-kilometers) showed a 21.5% decline while the systemwide seat load factor fell 5.3% points to 73.3%.
Gradual Reintroduction of Services
From 23 March to 31 May, LX operated a severely reduced timetable of services which comprised of selected routes within Europe from Zurich and Geneva and a thrice-weekly service between Zurich and New York.
Following the gradual easing of lockdown restrictions across Europe, LX will be gradually expanding its range of services from 15% to 20% of its original planned program from June onwards.
Swiss Chief Executive Officer, Thomas Klühr, said that the airline will be steadily expanding its services from Zurich and Geneva with the aim of restoring direct intercontinental connections.
These connections are “so vital to Switzerland’s economy, politics, society, and tourism sector” and described the reintroduction of services as a “step-by-step” process that will “take two to three years.” said the CEO.
Mr. Klühr added that the airline would be doing its “utmost to offer the best possible passenger and cargo services under the current circumstances.”
Further schedule expansion is planned over the summer months, with a constant eye on all developments in the various travel restrictions and on the air travel needs of the people of Switzerland.
Cargo Charter Business Expanded
The carrier has also expanded its air cargo services through its Swiss WorldCargo division in response to the newly created high demand for airfreight services.
The airline stated that some 375 cargo-only flights have been operated since the end of March and that three of LX’s Boeing 777 aircraft have had their economy class seating removed to provide more main-deck cargo capacity.
In addition, LX has also conducted various repatriation flights in March and April on behalf of the Swiss Federal Department of Foreign Affairs.
The flights brought Swiss nationals and other Swiss residents back to their home country from regions all over the world.