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Topic: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-17 03:36:42 and read 4649 times.

SWISS International Airlines has made 152% more profit in 2010 than the year before. This means a net profit of 368 mi CHF (app 368 mi USD). The load factor was 82.3 %.
With the short-haul flights there are still some problems whereas the recently (June 2010) opened route to SFO performed much better than predicted.
http://www.nzz.ch/nachrichten/wirtsc...368_mio_fr_verdient_1.9925952.html (in German).

I find it amazing that SWISS contributed about 1/4 to the LH profit of 1.1 bi EURO.

Topic: RE: Swiss With 152% More Profit
Username: Stratofish
Posted 2011-03-17 04:27:16 and read 4544 times.

Quoting ZRH (Thread starter):
With the short-haul flights there are still some problems...

Interesting since I just paid 190% of what I paid when I last flew them in 2008 on the very same route...

Topic: RE: Swiss With 152% More Profit
Username: sofianec
Posted 2011-03-17 04:52:39 and read 4462 times.

Quoting ZRH (Thread starter):
SWISS International Airlines has made 152% more profit in 2010 than the year before. This means a net profit of 368 mi CHF (app 368 mi USD). The load factor was 82.3 %.

Wow. That brings back memories of Swissair, which were THE VIP carrier. I have to say that when they first unveiled their premium focus with 3-class service on all long-haul I was sceptical they can fill the cabin but obviously the gamble paid-off.

---

Topic: RE: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-17 04:53:15 and read 4467 times.

Quoting Stratofish (Reply 1):
Interesting since I just paid 190% of what I paid when I last flew them in 2008 on the very same route...

I think all legacy carriers have problems with short-haul, because of the competition of airlines like EZY, FR etc. The network carriers mostly need their short-haul to feed the long-haul flights.

Topic: RE: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-17 04:58:23 and read 4440 times.

Here the press release in English:
http://www.swiss.com/web/EN/about_sw...lease%20Business%20Report%20Q4.pdf

Topic: RE: Swiss With 152% More Profit
Username: sofianec
Posted 2011-03-17 04:58:38 and read 4440 times.

oops / edited for double posting

[Edited 2011-03-17 05:00:49]

Topic: RE: Swiss With 152% More Profit
Username: aquila3
Posted 2011-03-17 05:02:01 and read 4430 times.

My compliments to Swiss!
Sounds like giving ALWAYS the best possible service (in the good and in the bad times) pays back.
At least this is my experience with them in the last 25 years. Full stop.

Topic: RE: Swiss With 152% More Profit
Username: runway23
Posted 2011-03-17 05:12:57 and read 4374 times.

Am I the only one who continues to be amazed at how LX has turned around from being highly unprofitable at its start to now contributing a large percentage of LH Group's annual profit.

I'm somewhat weary of how LX manages to get such large margins compared to LH. Makes you wonder if there isn't some creative accounting formulae in pushing LH revenue or profit to LX, in order to benefit from Swiss taxation. I'm not saying it is being done, but it is certainly what pops up in my head.

Topic: RE: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-17 05:18:34 and read 4332 times.

Quoting runway23 (Reply 7):
Am I the only one who continues to be amazed at how LX has turned around from being highly unprofitable at its start to now contributing a large percentage of LH Group's annual profit.

I'm somewhat weary of how LX manages to get such large margins compared to LH. Makes you wonder if there isn't some creative accounting formulae in pushing LH revenue or profit to LX, in order to benefit from Swiss taxation. I'm not saying it is being done, but it is certainly what pops up in my head.

It is amazing. You have to be aware that Christoph Franz (former CEO, actual LH CEO) introduced a very draconic cost management with the turn-around. It is to say that the employes earn much less than those of LH.

Topic: RE: Swiss With 152% More Profit
Username: sofianec
Posted 2011-03-17 05:25:32 and read 4290 times.

Quoting ZRH (Reply 8):
It is amazing. You have to be aware that Christoph Franz (former CEO, actual LH CEO) introduced a very draconic cost management with the turn-around. It is to say that the employes earn much less than those of LH.

That's definitely the case but we should also note that LX/LH employees make less than AF employees. Go figure.

Topic: RE: Swiss With 152% More Profit
Username: SR4ever
Posted 2011-03-17 12:43:01 and read 3910 times.

Congrats LX, great news, I hope they will invest part of these profits. More flights, more aircrafts, more service...

Topic: RE: Swiss With 152% More Profit
Username: sandroZRH
Posted 2011-03-17 12:45:30 and read 3909 times.

Quoting SR4ever (Reply 10):
I hope they will invest part of these profits. More flights, more aircrafts, more service...

Or finally pay their employees the salary that they deserve.

Topic: RE: Swiss With 152% More Profit
Username: oa260
Posted 2011-03-17 12:47:33 and read 3901 times.

Great news as a regular on LX services Im glad its returned a healthy profit. The European J class is the best IMHO.

Quoting Stratofish (Reply 1):
Interesting since I just paid 190% of what I paid when I last flew them in 2008 on the very same route...

True im paying EUR150 more than I did in previous years but I guess thats life .

Topic: RE: Swiss With 152% More Profit
Username: AirNZ
Posted 2011-03-17 13:00:02 and read 3841 times.

Quoting runway23 (Reply 7):
I'm somewhat weary of how LX manages to get such large margins compared to LH. Makes you wonder if there isn't some creative accounting formulae in pushing LH revenue or profit to LX, in order to benefit from Swiss taxation. I'm not saying it is being done, but it is certainly what pops up in my head.

I'm actually not trying to be rude, but could anyone please explain to me why it is that when a non-US carrier is profitable it is so often immediately voiced by members with US flags that 'creative accounting' must be involved?
I would stress that I am NOTrelating it to any specific persons....but to what appears to be collective responses and I simply cannot get my head around this seemingly prevalent 'unbeliveability/fear' that certain US aspects cannot compete. If such is thought to be much involved, are those objectors trying to say US airlines are too 'pure' to do it?

Topic: RE: Swiss With 152% More Profit
Username: SR4ever
Posted 2011-03-17 13:28:18 and read 3756 times.

Quoting sandroZRH (Reply 11):
Or finally pay their employees the salary that they deserve.

A good bonus would indeed be in line with decency, but more investment would be welcome, such as going for a full upgrade of the 343 fleet  

Topic: RE: Swiss With 152% More Profit
Username: Stratofish
Posted 2011-03-17 16:29:48 and read 3543 times.

Quoting ZRH (Reply 3):
I think all legacy carriers have problems with short-haul, because of the competition of airlines like EZY, FR etc. The network carriers mostly need their short-haul to feed the long-haul flights.

That's of course true but it's not only the legacy carriers, some LCCs do have similar problems as well. And even figuring in the so called German "green tax" and fuel I don't really see an explanation of the 90% hike. (I shall note that I even fly the same booking class) But prices have risen all throughout LH group and since I boycott AB...

Quoting sandroZRH (Reply 11):
Or finally pay their employees the salary that they deserve.

I must admit I really don't know about the Swiss system of employees rights and contracts. Do unions and/or workers councils etc. exist at Swiss (in Switzerland)?
I always thought since it's LH in can't be as bad as for example AB, after all, the reason behind me boycotting AB is because of their horrendous pay structure and (until half recently) absence of unionized workers (and their -to my liking - "less than pleasant" CEO). I for one am willing to pay a little premium knowing people get decent pay.

If the long haul is LX's cash cow we might expect some more investments (than already announced) by LH indeed.

Topic: RE: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-18 02:49:54 and read 3333 times.

Quoting Stratofish (Reply 15):
I must admit I really don't know about the Swiss system of employees rights and contracts. Do unions and/or workers councils etc. exist at Swiss (in Switzerland)?
I always thought since it's LH in can't be as bad as for example AB, after all, the reason behind me boycotting AB is because of their horrendous pay structure and (until half recently) absence of unionized workers (and their -to my liking - "less than pleasant" CEO). I for one am willing to pay a little premium knowing people get decent pay.

If the long haul is LX's cash cow we might expect some more investments (than already announced) by LH indeed.

Of course there are labor unions. The SWISS pilots have quite a strong one (Aeropers). But they are more reasonable than for example those from Italy. The Swiss prefer to have a strong company and keep the jobs than to strike all the time. I think (but I am not sure, Sandro has to tell) that the salaries at SWISS are nevertheless much better than with AB.

Topic: RE: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-18 06:30:37 and read 3131 times.

Quoting Stratofish (Reply 15):
if the long haul is LX's cash cow we might expect some more investments (than already announced) by LH indeed.

Actually 5 new A 333 by 2012 is already quite a lot. SWISS will then fly 30 long-haul aircrafts (15 A 343 and 15 A 333). Not many airlines in Europe, besides the big boys, have such a number. Considering that in the beginning the plan was for 26 long-haul frames. Then they reduced it to about 18. And now after LH bought the company they are again with 30. I could see more investments into the long-haul fleet with a few (up to five?) bigger aircrafts. For example A 340-600 or in the future A 350-1000.

Topic: RE: Swiss With 152% More Profit
Username: SQuared
Posted 2011-03-18 07:26:07 and read 3057 times.

Quoting AirNZ (Reply 13):
I'm actually not trying to be rude, but could anyone please explain to me why it is that when a non-US carrier is profitable it is so often immediately voiced by members with US flags that 'creative accounting' must be involved?

"Creative accounting" in this case shouldn't necessarily be viewed as a negative. Often that phrase is used against the likes of EK, EY, and QR, but it certainly has a different connotation for members of LH Group. "Creative accounting" here, is just the use of transfer pricing - a means to take advantage of different tax regimes to reduce taxation. If taxes are generally lower in Switzerland than in Germany, then when there are internal services provided to members of the group, there is an opportunity to shift profits to the less tax-heavy regime. For instance, when LH "sells" services to LX, it might sell them for a loss, and if LX "sells" services to LH, it might sell them at a higher profit margin. In effect, this increases LX's profits while diminishing LH's for taxation purposes. These are legitimate business practices, and any well-managed multinational will take advantage of these opportunities.

That said, financial statements released to the public are not generally the ones used for taxation purposes. And as there are generally different attribution rules for revenues/costs under the tax codes as compared to IFRS/GAAP, I would suggest that the financial statements (applying IFRS, I would hazard) probably paint an accurate picture of LX's overall contribution of profits to LH Group.

[Edited 2011-03-18 07:29:18]

Topic: RE: Swiss With 152% More Profit
Username: ka
Posted 2011-03-18 10:24:40 and read 2929 times.

BTW: Do these numbers include LX' subsidery Edelweiss? I didn't find a hint to that...

Ka.

Topic: RE: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-18 11:16:41 and read 2874 times.

Quoting ka (Reply 19):
BTW: Do these numbers include LX' subsidery Edelweiss? I didn't find a hint to that...

I think so. These are consolidated numbers which include all subsidiaries.
As the LH numbers include SWISS and other 100% subsidiaries.

Topic: RE: Swiss With 152% More Profit
Username: LXA340
Posted 2011-03-18 14:45:08 and read 2714 times.

Quoting runway23 (Reply 7):
I'm somewhat weary of how LX manages to get such large margins compared to LH. Makes you wonder if there isn't some creative accounting formulae in pushing LH revenue or profit to LX, in order to benefit from Swiss taxation. I'm not saying it is being done, but it is certainly what pops up in my head.

Or is it because LH serves their customers Caviar in F and LX Veal Sausage with Rösti potatoes 

Topic: RE: Swiss With 152% More Profit
Username: Stratofish
Posted 2011-03-18 20:57:33 and read 2590 times.

Quoting ZRH (Reply 16):
Of course there are labor unions. The SWISS pilots have quite a strong one (Aeropers). But they are more reasonable than for example those from Italy. The Swiss prefer to have a strong company and keep the jobs than to strike all the time. I think (but I am not sure, Sandro has to tell) that the salaries at SWISS are nevertheless much better than with AB.

Thanx for the info. Well, Sandro better keep those figures to himself (knowing the kind of contracts of LH) but I doubt they are worse than AB.

As much as I 'd like to see the A346 in LX I doubt it will happen...

Topic: RE: Swiss With 152% More Profit
Username: ZRH
Posted 2011-03-19 01:15:49 and read 2477 times.

Quoting Stratofish (Reply 22):
As much as I 'd like to see the A346 in LX I doubt it will happen...

I am not sure. Not long ago there was a rumor about this.

Topic: RE: Swiss With 152% More Profit
Username: BrianDromey
Posted 2011-03-19 03:47:24 and read 2361 times.

Quoting runway23 (Reply 7):

Indeed, the profit and turnaround is truly amazing. Long may it continue. I really hope LH can bring this kind of turnaround to BD, still lost about 150million last year.

Quoting AirNZ (Reply 13):

I don't think this is a legitimate argument. I honestly do believe that there is an element of is going on. It is a sensible and ligitimate business practice. LH may "sell" ground handling and maintenance, catering, etc to LX for nominal amounts and buy these, or other services, at quite a high price from LX. There are so many ways of splitting revenue, especially on complicated multiple-carrier fares. As with any merger/takeover there are synergy benefits It may be that all of these have credited to the SWISS side. Who knows how that is done inside the group. Interesting to se what the OS figures look like?

Topic: RE: Swiss With 152% More Profit
Username: Viscount724
Posted 2011-03-19 19:26:53 and read 2135 times.

Quoting oa260 (Reply 12):
The European J class is the best IMHO.

But not worth the fare difference considering the only significant difference is the empty middle seat.

Topic: RE: Swiss With 152% More Profit
Username: bojangles
Posted 2011-03-20 05:09:55 and read 1950 times.

Quoting Viscount724 (Reply 25):
Quoting oa260 (Reply 12):
The European J class is the best IMHO.

But not worth the fare difference considering the only significant difference is the empty middle seat.

Perhaps it's not worth it to you. Clearly is to thousands of others. IM(H)O is your friend  

Topic: RE: Swiss With 152% More Profit
Username: swissy
Posted 2011-03-20 05:38:48 and read 1920 times.

Quoting sandroZRH (Reply 11):
Or finally pay their employees the salary that they deserve.

Hey Sandro  please pass on my gratitude to all Swiss employees for making it happen, turning LX around with sacrifice on the employee side but still giving 110% dedication to the employer/customers...

Base salaries should be within reasons as labour fixed cost is a big part of the budget regardless of profit or losses...however the sky is the limit for performance bonuses, I think it is time for LX management to give a big thank you back to you dedicated guys...

Cheerios,

Topic: RE: Swiss With 152% More Profit
Username: SR4ever
Posted 2011-03-20 15:21:15 and read 1692 times.

Quoting ZRH (Reply 17):
Actually 5 new A 333 by 2012 is already quite a lot.

It's a lot, but as LX is now LH Crown Jewel, a bit more ambition wouldn't hurt.

PEK, ICN, SIN, IAH,EWR, DKR, LOS all deserve a LX Airbus  


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