Swiss International Airlines - Another victim of the ridicolously strong CHF

Breaking news from Swiss TV:

http://www.tagesschau.sf.tv/

LX profit 53 % down to 61 million CHF.

Signs that Switzerland as a country is economically in danger and that LX will have good reasosn to cut service quality.

It is not the strong Swiss Franc, but rather the weak Euro caused by the past financial tricks and sky high debt and social goodies piled up by the governments in the "garlic belt " aka "Club Med".

The Japanese Yen has the same problem. Yes, the Swiss exporting industry ( with the exception of watch and jewellery ) is facing some serious challenges currently.

Hm... LH reports in €, so some figures are skewed by the currency factor... if you factor in the goods that LX buys in USD, the CHF/USD has gone from 1.10 to nearly 1 since Mar 31. So cost of fuel and other things have gone up.

The full text of the LX section in the H12012 report is rather nice:


http://investor-relations.lufthansa.com/fileadmin/downloads/en/financial-reports/interims-reports/LH-QR-2012-2-e.pdf (page13)

The challenging market environment curbed business developments
at SWISS. Following a difficult start to the year, business
developments remained muted in the second quarter. Despite
posting higher revenue of EUR 2.0bn (previous year: EUR 1.9bn),
SWISS generated an operating profit of EUR 48m, – 53.8 per cent
less than a year earlier. This was due to the persistently strong
Swiss franc and high fuel prices.
Passenger numbers increased by 4.1 per cent to 8.1 million.
SWISS upped its sales by 6.5 per cent and took its passenger
load factor up to 80.5 per cent (+ 1.2 percentage points).
SWISS currently serves 70 destinations in 37 countries with a fleet
of 97 aircraft. Two new Airbus A330-300s and two A320s were
added to the fleet. Starting in 2014, SWISS will also replace its
entire regional fleet of Avro RJs with newly developed aircraft
from the Bombardier C-Series, which have lower emissions and
a reduced noise footprint.
SWISS’s ground product is also being refined. For instance, a new
arrivals lounge was officially opened at the Zurich hub in April.
Since July, SWISS has also been offering its passengers a home
collecting service for luggage.
SWISS increased both fuel surcharges and ticket prices on intercontinental
and European routes. Since the beginning of the year,
SWISS has also initiated extensive measures to safeguard earnings,
such as a hiring freeze for administrative staff. As part of the
Group programme SCORE, local traffic is also being optimised
and fuel management is being stepped up. Decisions will be made
on additional structural measures over the coming months.
Considering the challenging market environment SWISS expects
business to remain difficult for the remainder of 2012. It therefore
still looks unlikely that the company will match last year’s operating
result, despite the anticipated growth in sales.

Its good the sales & pax volume are up. I think margins are thin for everybody.
But if they manage to provide the same excellent service in these tough times & hold on to the loyal customers, then they will rewards in better times.

Its good the sales & pax volume are up. I think margins are thin for everybody.
But if they manage to provide the same excellent service in these tough times & hold on to the loyal customers, then they will rewards in better times.

The problem is that Swiss was forced into the mother Lufti's M&M program, which is now turned by Lufthansa inton a one sided illoyality program with constant enhancements into unattractiveness. Nearly every HON I talked to in the past 6 months has reduced the number of big revenue long haul flights and diverted its business to the other alliances or the big middle east carriers. Have you tried out TK in C or F ? They are getting close to Swiss nowadays. Unfortunately there is still the military managing IST airport, which must emerge from the CDG or Hellrow ligue.

The problem is that Swiss was forced into the mother Lufti's M&M program, which is now turned by Lufthansa inton a one sided illoyality program with constant enhancements into unattractiveness. Nearly every HON I talked to in the past 6 months has reduced the number of big revenue long haul flights and diverted its business to the other alliances or the big middle east carriers.

+1:this is an issue. At least the HON I know are flying a lot more with other carriers- something they never used to do (OK well at least I and my colleauges never used to).

TK in C or F ?

No more F on TK (since B777's leased from 9W are gone);)

But yes - new C is great (with slow service, though).

Breaking news from Swiss TV:

http://www.tagesschau.sf.tv/

LX profit 53 % down to 61 million CHF.

Signs that Switzerland as a country is economically in danger and that LX will have good reasosn to cut service quality.

I see your point and I agree that the Swiss export industry is suffering from a strong CHF. But we also know that the Swiss National Bank is buying heaps of foreign currency - in July it was CHF 40 billion! - to keep the CHF artificially low.

So shall we ask the Swiss National Bank to build even higher foreign currency reserves so that LX can upkeep its service standards?

The problem is that Swiss was forced into the mother Lufti's M&M program, which is now turned by Lufthansa inton a one sided illoyality program with constant enhancements into unattractiveness. Nearly every HON I talked to in the past 6 months has reduced the number of big revenue long haul flights and diverted its business to the other alliances or the big middle east carriers. Have you tried out TK in C or F ? They are getting close to Swiss nowadays. Unfortunately there is still the military managing IST airport, which must emerge from the CDG or Hellrow ligue.

+1. Whilst the service level, the written and unwritten benefits and the level of attention I am getting especially from the Swiss Customer Care team are matched by no other airline or their FFP, I have indeed been quite upset by the signal sent out by M&M which is that loyalty apparently is worth less than in the past. If you look at the number of FFPs on the left just under my username and the status I have on them, six months ago there was only Flying Blue (not because I love that airline but because I travel a lot from/to France). But the Gold status on EK, EY and QR are all recently earned. Granted, it is fairly easy to get status with them, but still, all of that revenue would previously have gone to LX and bit to LH. A pity.

I do not believe that tough economic times are an excuse for dropping service quality. In fact, I believe that the airlines that provide excellent service in tough times are more likely to survive than ones that don't, because they are more likely to have customers. I don't believe Swiss provides excellent service but I do believe it is better than many. If anything here is a reason for them to 'up their game'.

I see your point and I agree that the Swiss export industry is suffering from a strong CHF. But we also know that the Swiss National Bank is buying heaps of foreign currency - in July it was CHF 40 billion! - to keep the CHF artificially low.

So shall we ask the Swiss National Bank to build even higher foreign currency reserves so that LX can upkeep its service standards?


In less than 5 years virtually everybody in Switzerland will regret that the country missed the opportunity to join the EU and the EUR from the beginning. We could be a very powerful member of this community and our industry would be very competitive.

That LX despite all this is still so good shows its excellence and I know for many of us it is by far the preferred carrier.

In less than 5 years virtually everybody in Switzerland will regret that the country missed the opportunity to join the EU and the EUR from the beginning. We could be a very powerful member of this community and our industry would be very competitive.


That will be debatable in 5 years. But the same opinions have been around since the beginning of teh EU and our economy is still very strong. Despite all the naysayers. Unemployment of less then 3%? Top that, any country in the EU Zone.

Swiss is a great airline and provide good and appropriate service. Might not be over the top, but they offer a good all around product. Keep that up and minimize Irrops and keep the customer complaint respond time low and Swiss will keep getting stronger.
W

Swiss is a great airline and provide good and appropriate service.


I'm not sure this comment is completely accurate.

But it is timely; I phoned up this evening to request a seat after I booked online. For some reason Swiss is one of the few remaining 'full service' airlines not to enable online seat requests. Got Sth Africa Call Centre. They were unable to request a seat for me (*G in C) because of a technical glitch. Of course it's up to me to phone back until they can resolve it, how can one expect a full service airline to take ownership of a situation like this :)

So an hour later I receive an email from info.ch@swiss.com telling me to "contact Swiss urgently" on 0848 700 700 to rebook my flight and quoting the booking reference. I duly phoned the number and after 10 minutes waiting for the operator to speak to someone, I was told it was not possible I had been sent this email since everything was ok and my flight did not need rebooking. It simply was not possible that I had been sent this. Inconceivable even.

Now mistakes do happen - we're all human - but how they should send this email and then deny it... and how they should expect me to phone back and phone back until their technical issue is fixed... not to mention of course the confidence hit a customer takes from receiving an email saying they urgently need to rebook.

I'm not seeing 'good and appropriate' anywhere here. Step it up, Swiss. We're paying for better than this.

I'm not sure this comment is completely accurate.

But it is timely; [personal story of somethign not 100% perfect deleted]

I knew the moment I typed my previous post that someone will be posting an encounter about or with Swiss that either went wrong or did not meet subjective expectation.

Yes, the more you fly the higher is the chance the something goes wrong *and* that the airline did not respond well (or makes it worse...). Not defending any airline and also not Swiss, they have room for improvment. My point, however, is still valid. Swiss provides an accurante and excellent service. However not 100% perfect for the howmany millions of travelers each year.
But please, please. Fly other airlines, they are perfect and have perfectly educated people on all timezones 24/7. More room for me on LX.
W

I knew the moment I typed my previous post that someone will be posting an encounter about or with Swiss that either went wrong or did not meet subjective expectation.

Yes, the more you fly the higher is the chance the something goes wrong *and* that the airline did not respond well (or makes it worse...). Not defending any airline and also not Swiss, they have room for improvment. My point, however, is still valid. Swiss provides an accurante and excellent service. However not 100% perfect for the howmany millions of travelers each year.
But please, please. Fly other airlines, they are perfect and have perfectly educated people on all timezones 24/7. More room for me on LX.
W

I am not sure that stooping to tell me to fly another airline is necessary. To provide some context, the OP said "LX will have good reasosn to cut service quality." I disagreed, stating I thought that LX should take the opportunity to improve service quality and therefore better enable itself to weather the economic storm.

I also disagreed with the use of the words excellent, good and appropriate in your post. On reflection perhaps you are right, but in my view, only to the extent of 'good'. Excellence is such a strong status that in my view few airlines will ever reach it. As I said in my post, mistakes happen - we're human - but it's how these situations are recovered that really show me how good a company is. Swiss is an airline that while it is good, and while it is better than many, it still has a long way to go before it reaches excellence.

That is my view, and it is just as valid as yours. So I will happily take my seat alongside you on board Swiss, knowing that I am flying one of the 'good' ones. That is fortunate, because if everyone who spoke up when something went wrong on Swiss was told to fly another airline, there wouldn't be much of Swiss left to fly on.

The strong CHF got a mention again in todays Q3 presentation... :rolleyes:

The strong CHF got a mention again in todays Q3 presentation... :rolleyes:

A bit much really. The strategic assumptions relative to the CHF have been quite easy to predict for 3 years now.....

LX Q1 came out today and just reading it hurts the eyes:

http://www.swiss.com/web/EN/about_swiss/financial_information/Pages/financial_information.aspx?1367496129810&Country=CH

A little better loads, a little more revenue, but worse results :eek:

No more CHF talk though ^

Has this affected their ticket pricing at all? I have noticed that my LON-ZRH tickets have jumped enormously in price: between 50-100% compared to the same time last year.

At this rate, Swiss are going to be more expensive than BA. If Easyjet offered better timed flights, I'd seriously think about switching.