Swiss goes back to the future

There is no bucking the trend it seems when it comes to regional operations at Europe's mainline carriers. Swiss is the latest major to hive its regional flying into a separate unit with the launch of Swiss "European" this week. It will put all of its fleet of 18 Avro RJs and seven Embraer ERJ-145s into the new subsidiary.

The carrier says it has wanted to make this move for a couple of years, and has tried before, but the project failed as unions failed to agree. Now, with crucial collective bargaining agreements expiring by the end of this year, Swiss is taking the plunge. Talks are underway with pilots and cabin crew to transfer to the new company. For the time being they will work on their current Swiss contracts until new deals are reached.

The aim is for Swiss European to achieve a lower cost structure compared to Swiss. It will not disclose how much it will save with this initiative, but it will contribute to the carrier's restructuring programme to improve its operating result by SFr300 million ($240 million) by 2007. Swiss hopes to breakeven next year and make a profit in 2007.

The launch of a new regional airline in Switzerland is a reminder of another successful regional from this country: Crossair. Now that was an interesting airline. It grew rapidly and became the benchmark for Europe's burgeoning regional sector in the 1990s. The slide started when it moved under the Swiss umbrella, and eventually took over its own parent. Now it is separated once again, although the Crossair name is still assigned to the history books.