Swissair cuts 1,250 jobs

Swissair's ground handling business is up for sale

Swiss aviation group Swissair will speed up its asset disposal programme to pay off creditors and cut 1,250 jobs, it said on Thursday as it reported a smaller than expected first-half net loss.

The company reported a first half net loss of 234m Swiss francs ($140.3m), compared with a profit of three million francs in the first half of last year.

It said it would lay off 250 of its managers by the end of the year and cut another 1,000 jobs through restructuring its network and fleet composition at Swissair and its regional Crossair subsidiary.

Stakes in the Swissport ground handling activities and the Nuance Group airport retail business, have been put up for sale.

Swissair made a record 2.9bn francs loss in 2000 after taking 2.7bn francs in charges for loss-making Belgian airline Sabena, France's AOM/Air Liberte and LTU of Germany.

Air turbulence

Swissair is in the middle of a restructuring programme after running into financial difficulties following an ambitious expansion programme.

The company has pulled out of France and struck a deal with the Belgian government that allows it to escape from commitments at Sabena, where it is a minority shareholder.

Swissair plans to cut costs by 500m francs before the end of the year.

Revenues rose 8% to 8.1bn francs, above analyst expectations, while profit before interest and tax (EBIT) was 177m francs before losses at affiliates and a 251m francs provision at German subsidiary LTU. After these factors, EBIT was negative 43m francs.