Fresh capital sets stage for Swisswings’ recovery
The management of Swiss regional airline Swisswings (formerly Air Engiadina) has announced the successful completion of a refinancing program that provided SFr8 million ($5 million) in fresh capital before the subscription deadline of Aug. 30, 2001. The company previously reduced share capital by 60 percent to liquidate accumulated debt. The new capital comes mostly from investors and companies within the region of Bern, where the airline maintains its headquarters.
Swisswings carried 75,000 passengers (up 2 percent) and achieved sales of more than $12 million (up 7 percent) in the first half of 2000, both above expectations. Revenue per passenger increased by 1.8 percent and the company’s extensive charter flight program established this summer proved a financial success. Swisswings operates regular flights, seasonal liaisons during holidays and charter flights on behalf of different tour operators. The company owns a fleet of five Fairchild Dornier 328 turboprops, one of which it wet leases to a third party.
Swisswings operates regular flights from Bern to Amsterdam under code shares with KLM and Northwest Airlines, as well as to London City and Munich. The regional airline also flies from Geneva to Florence, Venice, Stuttgart, Toulouse and Marseilles; and from Zurich to the Italian resort island of Elba. Popular charter destinations include Figari, Tortoli and Naples from Bern, and Biarritz and Corsica from Geneva.
Major Restructuring Effort
Until March 28 known as Air Engiadina, Swisswings’ name change coincided with the start of a major restructuring program that saw it relinquish its 49-percent stake in Air Alps Aviation and loosen ties with Dutch major carrier KLM. Spurred by a $4 million operating loss last year, managing director Leon Vonlanthen, an experienced airline executive in charge of operations since September of last year, enacted a new policy centered on exploiting niche markets, rather than seeking growth at any price.
The airline had counted on a planned code-sharing agreement between KLM and Italian flagcarrier Alitalia to improve its revenues with new opportunities between Switzerland and Italy. When the agreement failed to materialize, Swisswings chose
instead to enter new code-share agreements with fellow Swiss regional Crossair in
markets better suited to its fleet of Dornier 328 turboprops.