Swiss International Air Lines will halt its cash haemorrhage within the next three months and plans to break even this year, says interim chief executive Pieter Bouw. The airline made a SFr498 million ($394 million) operating loss in 2003, although interest payments, taxes and reconstruction costs pushed this up to a SFr687 million net loss.
Over the past year, Swiss has spent SFr753 million of its SFr1.26 billion reserve, ending the year with only SFr503 million in cash and equivalents. By June, the airline says this will have fallen to near SFr250 million.
"We will start to break even in the summer," says Bouw. The airline has also drawn all of a SFr50 million loan backed by a credit guarantee from British Airways, earlier this month.
However, Swiss is still trying to close a deal on a SFr500 million credit facility, which it has been negotiating since June 2003. The problem, Bouw says, is that the aircraft it plans to use as collateral for the loan are already involved as collateral in another deal, and Swiss has nothing to offer as a substitute. The loan is no longer essential for Swiss's successful restructuring and Bouw says "the same time pressure does not exist as it did last year" but it is still important to the airline for flexibility against external shocks.
Source: Flight International