SWISS generated total revenue of CHF 3 134 million for the first nine months of 2002 and posted a CHF 582 million net loss for the period.  Total revenue for the third quarter amounted to CHF 1 380 million, while the company sustained a CHF 135 million net loss over the same three-month period.  The third-quarter result includes non-recurring costs associated with the establishment of the new airline, along with an exceptional value adjustment to the aircraft fleet.  The third-quarter result is a substantial improvement on the net losses sustained for the first two quarters, but is still less than wholly satisfactory, given that the third quarter is traditionally the most profitable in earnings terms.   

Revenue from scheduled services amounted to CHF 2 678 million for the first nine months of the year.  Some CHF 1 158 million of this amount was generated in the third-quarter period.  A total of 3.48 million passengers were transported on scheduled services in the July-to-September period, generating a seat load factor of 77.3 per cent.  Gross third-quarter yield per revenue seat-kilometre amounted to 15.4 centimes, slightly down on the 15.7 centimes posted for the second quarter.  The decline can be attributed to tickets sold at low fares earlier in the year, the traditionally high proportion of leisure travellers in the third quarter, the redemption of award tickets from the company’s frequent flyer programme and a higher proportion of transfer passengers.  Raising yields remains one of SWISS’s top priorities. 

Cargo services produced total revenue of CHF 281 million for the first nine months, as SWISS’s airfreight division continued to focus on the niche-product segment.  Third-quarter cargo revenue amounted to CHF 134 million, broadly in line with the division’s second-quarter performance.

Year-to-date revenue from charter flights totalled CHF 141 million.  More than half of this amount - CHF 75 million - was generated in the third quarter alone.  The result was still below prior-year levels, however, reflecting the travel sector’s present difficulties, though the decline is also partly attributable to adverse currency movements. 

Third-quarter revenue from other operations - which largely derived from third-party aircraft maintenance activities - amounted to CHF 13 million.  Year-to-date revenue from other operations totalled CHF 34 million.

Total revenue for the third quarter amounted to CHF 1 380 million, an eight-per-cent improvement on the second-quarter result.  Total revenue for the first nine months stood at CHF 3 134 million.  A further CHF 79 million was generated in other operating income, through the leasing-out of aircraft and simulators, the rental of office premises and commissions on ticket sales for other air carriers.

The cost of materials totalled CHF 910 million for the first three quarters of 2002.  The position includes the costs of inflight catering and fuel.  The increased price of kerosene on the world’s fuel markets was felt only slightly, thanks to hedging activities.  The cost of services totalled CHF 1 283 million for the year to date.  Personnel expenses amounted to CHF 703 million, while depreciation and amortisation costs totalled CHF 214 million.  The last figure includes an exceptional value adjustment of CHF 60 million to the aircraft fleet, which was brought forward for inclusion in the third-quarter accounts.  The CHF 651 million in other operating expenses includes administration, advertising, IT and insurance costs.

Non-recurring costs of some CHF 165 million were incurred in the first three quarters through the company’s transformation from a regional air carrier to an airline with an intercontinental route network.  CHF 15 million of this was incurred in the third quarter.  These costs are steadily declining, and will not occur from next year onwards. 
Securing a competitive cost base is a top priority for SWISS and, with the air transport arena remaining as fiercely contested as ever, remains a paramount concern.

The year-to-date profit/loss from operating activities amounted to a loss of CHF 548 million.  After deduction of a CHF 32 million negative financial result, income taxes and minority interests, the company posted a net loss of CHF 582 million for the first nine months.  CHF 135 million of this loss was sustained in the third-quarter period.  The July-to-September result is thus an improvement on the first two quarters of 2002, which produced net losses of CHF 190 million and CHF 257 million respectively.  Excluding the non-recurring costs of CHF 15 million to establish the new airline and the exceptional value adjustment of CHF 60 million, the third quarter produced a net loss of CHF 60 million.  The similarly-revised net loss for the second quarter (in which an identical route network was operated) amounted to CHF 157 million - a clear indication of an improvement in earnings in the third-quarter period. 

The balance sheet at the end of September 2002 showed cash & cash equivalents and short-term investments of CHF 982 million.  The value of the aircraft fleet declined from mid-year levels following the exceptional value adjustment effected on these assets.  The value of property, plant and equipment was CHF 20 million higher than at the end of June, reflecting progress on the new administrative offices, car park and hangar facilities at the company’s Basel head office.  Non-current assets accounted for 55.3 per cent of the balance sheet total at the end of September. 

Share capital increased from CHF 2 619 million to CHF 2 625 million in the course of the third quarter, through the acquisition of SWISS shareholdings by a number of cantons.  After deduction of the net loss, shareholders’ equity amounted to CHF 2 125 million at the end of September, giving a balance sheet equity ratio of 44.9 per cent. 

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