Swiss still stuck on the sidelines of Oneworld
Neue Zürcher Zeitung, april-16-2004
Switzerland’s loss-making national airline has been criticised for giving away too much to British Airways in its efforts to join the Oneworld alliance.
But in an interview with swissinfo, Swiss deputy chairman Walter Bosch defended the deal and said the carrier was on track to turn its financial fortunes around.
Bosch was appointed as right-hand man to chairman Pieter Bouw last month, following the resignation of CEO André Dosé.
In his capacity as deputy chairman Bosch is helping to head up the troubled carrier while it seeks a new boss.
Swiss has been burning money – at one stage at the rate of nearly SFr2 million per day – since it took to the skies in 2002 following the collapse of Swissair.
The carrier has spent the past two years cutting staff, taking aircraft out of service and ditching loss-making destinations.
Last September Swiss signed a preliminary agreement with British Airways (BA) to join the Oneworld alliance - which also includes Qantas, Cathay Pacific and American Airlines – and simultaneously entered into a “strategic partnership” with BA.
Swiss had been casting around for an alliance partner and hailed the deal as a turning point.
But critics say the airline had to buy its way into the alliance by offering BA some of its lucrative landing slots at London’s Heathrow airport as security for a SFr50 million credit facility.
swissinfo: Swiss accepted an invitation to join the Oneworld alliance last year but membership negotiations continue. What is holding things back?
Walter Bosch: We are talking about two things here: one is the Oneworld alliance and the other is the strategic partnership with BA. These two issues are linked but are not the same. For the time being we are working on entry to the alliance and we have some problems with our partnership with BA - on both a technical and business basis.
Take the technical side of things. Integrating the frequent flyer programmes of BA and Swiss is very complex and is taking more time than we thought. But there are also some misunderstandings about what we give and what we take, because we don’t want to give out all our client data and receive nothing in return. That’s under discussion right now, as is the issue that our frequent flyer programmes are different. BA, for example, only has 200 frequent flyer clients in its top tier, while at Swiss we have 1,200 at the highest level. So it’s very difficult to see how we can bring these two programmes together without hurting our passengers.
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>>> more: Read the answers to the following questions here:
http://www.nzz.ch/2004/04/16/english...nd4868636.html
* swissinfo: Some analysts have criticised Swiss for buying its way into Oneworld by, for example, offering some of its landing slots to BA as collateral. Isn’t the deal brokered by Swiss somewhat one-sided?
* swissinfo: On Tuesday Swiss announced that it had filled more seats in the first quarter of 2004 than during the same period last year. But since the fleet is now much smaller than a year ago, does this really mean that you are making any progress?
* swissinfo: When do you think the airline might break even?
* swissinfo: This week a new airline, Premium Air, announced it was planning to launch business flights on the lucrative transatlantic route between Switzerland and the United States. Are you worried by the threat of new competition?
* swissinfo: The German airline, Lufthansa, has made it clear it intends to increase its market share in Switzerland by poaching Swiss business passengers. How concerned are you about this?
* swissinfo: How far advanced are ongoing negotiations with the banks on securing an additional credit line for the airline?