24/06/2003 14:42
Swiss International Air Lines is expected to announce on Tuesday the cutting of about 3,000 jobs and one third of its fleet as part of a fresh restructuring plan.
The airline, born last year out of collapsed carrier Swissair and regional subsidiary Crossair, has been struggling to contain losses of about 2 million Swiss francs ($1.5m; £900,000) a day.
Like most international airlines, the Swiss carrier has been hit by the combination of the global economic slowdown and the slump in air travel relating to the Sars virus and war in Iraq.
It has also suffered particularly badly from increased competition from low-cost airlines.
Knock-on effect
The likely job cuts would represent about one third of the company's workforce while the fleet reduction is expected to result in 35-40 planes being grounded.
Management jobs will be cut by about half while most of the job losses will be among the airline's ground staff, Swiss newspapers said.
There is also expected to be an unwelcome knock-on effect for Swiss's suppliers.
"Apart from the 3,000 redundancies at Swiss, we also fear the loss of 2,000 peripheral jobs," said Daniel Vischer, secretary general of VPOD union.
Most aviation analysts believe Swiss needs large scale job cuts to turn the airline's fortunes around: "They've got to reduce capacity," Ernst & Young analyst Lloyd Brown told BBC Radio.
Trading in Swiss's shares, which have lost more than 60% of their value this year, was suspended on Monday pending the restructuring announcement.
Details are expected to be unveiled at about 1200 GMT.
The airline, born last year out of collapsed carrier Swissair and regional subsidiary Crossair, has been struggling to contain losses of about 2 million Swiss francs ($1.5m; £900,000) a day.
Like most international airlines, the Swiss carrier has been hit by the combination of the global economic slowdown and the slump in air travel relating to the Sars virus and war in Iraq.
It has also suffered particularly badly from increased competition from low-cost airlines.
Knock-on effect
The likely job cuts would represent about one third of the company's workforce while the fleet reduction is expected to result in 35-40 planes being grounded.
Management jobs will be cut by about half while most of the job losses will be among the airline's ground staff, Swiss newspapers said.
There is also expected to be an unwelcome knock-on effect for Swiss's suppliers.
"Apart from the 3,000 redundancies at Swiss, we also fear the loss of 2,000 peripheral jobs," said Daniel Vischer, secretary general of VPOD union.
Most aviation analysts believe Swiss needs large scale job cuts to turn the airline's fortunes around: "They've got to reduce capacity," Ernst & Young analyst Lloyd Brown told BBC Radio.
Trading in Swiss's shares, which have lost more than 60% of their value this year, was suspended on Monday pending the restructuring announcement.
Details are expected to be unveiled at about 1200 GMT.
Related Articles
