Lufthansa subsidiary Swiss International Air Lines' operating profits slumped by 87% to Swfr18 million ($19.4 million) in the fourth quarter of 2011, compared with Swfr135 million in the same period the year before.
Operating profit for the full year declined by 17% Swfr306 million.
"Our operating results for 2011 clearly reflect the crisis in Japan and the upheavals in North Africa in the course of the year," says Swiss's CEO, Harry Hohmeister. "But they are also the product of a far-from-easy market, especially in the fourth-quarter period."
In the period October-December 2011, Swiss's passenger numbers rose by 4.1% year-on-year to 3.75 million against a capacity increase of 3.2%, leading to a load factor for the period of 80.9%, down 1.3 percentage points.
Capacity at Swiss WorldCargo was raised 7%, leading to a load factor of 79.4%, down 3.5 percentage points.
"While our load factors remain high, the yield situation is giving us sizeable cause for concern," says Hohmeister. "We see little prospect of any improvement at present and these difficulties are being exacerbated by very high oil prices and the strength of the Swiss franc."
Swiss says it is attempting to stabilise and improve its earnings for 2012 by introducing a hiring freeze for overhead functions and reducing the cost of using external consultants, among other things. It hopes these measures will improve its operating results by some Swfr100 million.
Posting its group financial results today, Lufthansa said Swiss had performed well compared with some of its other subsidiaries.