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ZURICH, Aug 16: Loss-making Swiss International Air Lines will have made up its mind on its strategic options including joining a global airline alliance by month-end, a board member told Swiss radio on Saturday.
“We should not lose much more time and have a decision by month-end,” Swiss Air Lines director Walter Bosch said.
It was “absolutely realistic” for Swiss to remain on its own. He said he had not made up its mind yet, but it could well be that the board would vote for joining an alliance, widely expected to be the Oneworld grouping led by British Airways.
Bosch said in the radio interview that it was unlikely that the board would come to a decision at Monday’s meeting ahead of news due on Tuesday of first-half results.
“We are not in the black yet, but we are moving in that direction. You cannot expect us to suddenly have a profit, but you will see positive developments,” he said of the interim results.
Bosch reiterated Swiss’ denial of recent media reports that the carrier would seek protection from creditors, noting that, for now, it had adequate cash, but he did not comment on future financing.
The airline, which has said it must find 500 million Swiss francs ($365 million) to keep flying into 2004, is expected to detail on Tuesday how it plans to tackle losses of millions of francs and survive in the gruelling airline industry.
Analysts say it must show progress on capacity reduction and cost-cutting measures to stand a chance of getting fresh cash.
Ever since its launch thanks to a 2.7 billion-franc rescue drive by public and private investors, Swiss has wanted a berth in the oneworld alliance, but BA in the past has kept Swiss out, seeking to protect its own competitive position.
Separately, Swiss, which rose from the ashes of collapsed Swissair and regional carrier Crossair in April 2002, has been in cooperation talks with Germany’s Lufthansa.
ECONOMY TO SHRINK: The Swiss economy is expected to contract by 0.3 per cent in 2003, its worst result in nine years, owing to weak conditions hitting its neighbours, the state secretariat for the economy (Seco) said on Friday.
In May, Seco had predicted the economy would be flat for the full year.
In 2002 the economy advanced by a sluggish 0.1 per cent, and in 2001 did only slightly better, at 0.9 per cent.
With its economy already slowing down late last year, Switzerland suffered further from sharp drops in domestic consumption and exports of goods and services.
Its gross domestic product contracted by 0.7 per cent in the fourth quarter of 2002, and by 1.0 per cent in the first three months of this year, meaning the economy was already in recession in April.
Figures for the second quarter are to be released on September 4.
Until recently, the business climate and order books were “bad in almost every sector”, Seco said in a statement.—Agencies
