Last turboprop at Swiss marks end of an era

 - October 23, 2006, 11:09 AM

The company that launched the Saab 340 into prominence in Europe will soon bow out of the turboprop flying business altogether, when Swiss International Airlines bids adieu to the last of its 50-seat Saab 2000s this month and embarks on a restructuring of its regional jet fleet that will also banish all nine of the carrier’s Embraer 145s by March. During that period, the airline will add another six Avro RJ100s, resulting in a regional fleet of 20 Avro RJ100s and four RJ85s.

Despite the reduction of Swiss’ regional fleet from 35 to 24 airplanes, capacity will fall by only 300 seats, to 2,268, due to the increased focus on larger aircraft. The company’s Avro RJ85s carry 82 passengers and its RJ100s hold 97. According to Swiss, the new strategy will allow it to better control its unit costs, while preserving access to regional and steep-approach airports, such as London City and Lugano.

Swiss will offer no direct replacement for the Saab 2000 service from Basel, but as the airline now sells all its flights to Germany in partnership with Lufthansa, most passengers will find the connections they need in formerly competing flights within Lufthansa’s network. Lufthansa Regional consists of five airlines–Lufthansa City Line, Eurowings, Contact Air, Augsburg Airways and Air Dolomiti–with a combined fleet of 156 regional aircraft serving 150 city pairs in Europe. The group carries some 10.5 million passengers per year.

Swiss has not renewed its contract with Cirrus Airlines for the Zurich-Lugano link, opting instead for Lugano-based Darwin Airlines. Starting October 30, Darwin’s Saab 2000s will replace Cirrus de Havilland Dash 8-300s on the route.
Swiss said it will maintain “appropriate” service from its headquarters at Basel Airport, built by Swiss promoters on French territory after World War II and rechristened EuroAirport to reflect the fact that it supports the nearby towns of Basel, Switzerland; Moulhouse, France; and Freiburg, Germany.

Swiss plans to furlough some pilots and cabin crew, while others get retrained for newly acquired Avros. At press time Swiss’ payroll included 250 “redundant” pilots, who have threatened legal action based on earlier contractual job guarantees if the company follows through.

One alternative might involve the establishment of a new regional subsidiary called Swiss European Airlines, for which the company has requested an operating certificate from the Swiss authorities. CEO Christoph Franz stressed that the filing does not necessarily mean the airline will ever come into existence, however. In fact, he said, it represents just one of many possible avenues toward a negotiated settlement. Franz emphasized that the sides need to find a solution quickly, and that the company can no longer afford to act as an “employment agency.”

Meanwhile, the airline’s maintenance facilities at EuroAirport will remain in operation while Swiss fulfills a long-term Saab 2000 maintenance contract with Finland’s Blue1 for five Saab 2000s, and Darwin maintains three of its own 50-seat Swedish turboprops on the grounds. Swiss has also recently taken responsibility for heavy maintenance of Lufthansa CityLine’s 18 Avro RJ85s and plans to hire up to 50 more technical specialists.

During the first half of the year Swiss again failed to reach profitability, posting a pre-tax loss of SFr88 million ($71 million), compared with a loss of SFr32 million ($26 million) during the same period last year. The company blamed the high cost of jet fuel for an erosion of SFr104 million ($84 million) in earnings.

On a positive note, available liquid cash reserves increased from SFr481 million ($389 million) at the end of last year to SFr497 million ($402 million) as of June 30. With a leaner fleet and more maintenance work, Swiss hopes to reach profitability next year in spite of rising fuel costs.