Swiss moves to establish new regional subsidiary

 - October 18, 2006, 11:01 AM

Swiss International Air Lines will once again segregate its regional operations under the auspices of a new subsidiary, the company announced last month. Named Swiss European Air Lines, the wholly owned operating unit will take possession of Swiss’ remaining Embraer ERJ 145 and Avro RJ85/100 fleet before year-end. Plans call for all seven Embraers to leave the fleet and six Avro RJ100s to join the current complement of four RJ85s and 14 RJ100s by March.

The new regional will not operate as an independent airline but will wet lease its entire fleet to Swiss International Air Lines, which will market available seats under its own code numbers. The arrangement follows the general practice of Swiss International’s new owner, Lufthansa, whose own regional subsidiary now consists of the remnants of Lufthansa City Line, Eurowings, Air Dolomiti, Augsburg Airways and Contact Air.

The goal, of course, is to lower costs and, above all, to remove redundant regional (ex-Crossair) pilots from the Swiss payroll. The new subsidiary will rehire them as needed, at a lower salary. Swiss currently employs 450 regional pilots, but Swiss European Air Lines will need only 240.

The general employment contract Swiss negotiated with the former Crossair pilots expired on October 31. Management expects resistance from employees, but Swiss hopes to implement the transition without major disruptions.

Former Swissair Airbus line pilot and Swiss Embraer ERJ 145 chief pilot Peter Koch will head Swiss European Air Lines, while Manfred Brennwald, COO of Swiss, will serve as chairman of the board.