Swiss International Air Lines (SWISS) has reported an exceptionally strong earnings result for the seasonally weak first quarter of the year. For the first three months of 2023 the Swiss airline achieved an operating result of CHF 78.4 million (Q1 2022: CHF -47.4 million). Total revenues for the period amounted to CHF 1.1 billion, up some 55 per cent on the prior-year period (Q1 2022: CHF 712 million).
“Our lower cost base following our restructuring in 2021 and the high reliability of our flight schedules again served as key factors in this strong earnings performance,” says SWISS Chief Financial Officer Markus Binkert. “Our first-quarter result is a clear confirmation that SWISS is structurally sound and was able to take further full advantage of a favourable market environment. People’s keen desire to travel continues to generate a strong demand for flights, while our industry’s overall capacities remain reduced following the corona years.”
As it had in 2022, the particular constellation of supply and demand resulted in reduced availabilities of low-fare tickets. This in turn had a positive impact on yields. The strength of its home Swiss market also proved a particular benefit to SWISS.
SWISS’s cargo business made a further major contribution to overall earnings for the period, though no longer at the record levels seen in the past few years. This is partly because the company operated substantially fewer cargo-only flights in the first-quarter period.
SWISS debt-free again
With its first-quarter earnings result, SWISS has now regained the liquidity levels which it had maintained in pre-crisis times. The company had already prematurely repaid all its government-guaranteed bank loans at the end of May 2022 in favour of securing its loan financing on the capital markets via the Lufthansa Group. Thanks to its strong 2023 first-quarter performance, SWISS has been able to repay these loans, too, and can now unreservedly invest once again.
“If we are to continue to assert our position as one of Europe’s leading airlines, we must be able to invest in our company,” emphasizes SWISS CEO Dieter Vranckx. “Our customers have an ever-stronger need to pay due regard to the environment in their travel activities, too; and the desire for premium quality also continues to grow. So strong financial results are vital to our future, as they enable us to make our business more sustainable and to develop new quality products, while simultaneously remaining an attractive employer.”
Steep rise in passenger numbers
SWISS (excluding Edelweiss Air) transported over three million passengers in the first quarter of 2023, an increase of more than 70 per cent on the prior-year period. Over 27,000 flights were performed, some 47 per cent more than a year ago. Systemwide, SWISS offered 40.2 per cent more capacity for the period in available seat-kilometres (ASK), the airline industry’s standard production measure. Total first-quarter traffic volume, measured in revenue passenger-kilometres (RPK), was 80.4 per cent above its prior-year level. Systemwide first-quarter seat load factor amounted to a very high 81 per cent, an 18.1-percentage-point improvement on the prior-year period. SWISS still expects to report total ASK production for 2023 that is as high as 85 per cent of its 2019 level, and expects to raise this further in 2024.
One of the top priorities for the months ahead will be to continue to ensure maximum schedule stability. SWISS will continue to take every action it can to provide its customers with the highest possible reliability in its flight operations