SWISS reports solid first-half earnings of CHF 264 million

SWISS achieved an operating result of CHF 264.2 million on total revenues of CHF 2.7 billion for the first six months of 2024 – a solid earnings performance given the challenging market conditions. SWISS’s 2024 first-half operating result is slightly below last year’s record level, for two prime reasons. The market situation is now closer to normality, with the capacity shortages which had still substantially restricted the airline industry’s production in 2023 now significantly eased; and costs have risen, owing in particular to salary increases, higher charges and fees and the increased expense of servicing and maintaining the SWISS aircraft fleet. On top of this, SWISS has also been specifically investing in further enhancing its product and service offer. SWISS transported some 8.5 million passengers in the 2024 first-half period.

Swiss International Air Lines (SWISS) reports a solid operating result (Adjusted EBIT) of CHF 264.2 million for the first six months of 2024. The result represents a decline of some 22 per cent from the record CHF 338.3 million achieved for the same period last year. Total revenues for January to June 2024 amounted to CHF 2.7 billion, a 5.5-per-cent increase on the CHF 2.5 billion of the prior-year period.

“The market trend back to more normal conditions that we saw in the first quarter of this year has continued faster than we originally expected,” says SWISS Chief Financial Officer Dennis Weber. “People’s desire to travel remains high, which we are very pleased about. But a number of airlines have now restored their production capacities to pre-corona volumes, and in some cases even higher. This has tangibly intensified competition; and this in turn has depressed yields below their prior-year levels.”

Alongside this changed market situation, rising costs also reduced SWISS’s earnings for the 2024 first-half period. In addition to the higher expense incurred through expanding its flight operations, the salary and other compensation increases incorporated in various new collective labour agreements, higher charges and fees and high inflation in the maintenance services field were all particularly instrumental in raising costs for the period. SWISS also invested substantially in further enhancing its customer experience, to deliver even more comprehensively on its premium promise.

“The present market and operating conditions pose us some major challenges,” CFO Weber continues. “Geopolitical developments, extreme weather and shortages of resources in Europe’s air navigation services all tangibly affect our flight operations. Added to this, the return of our industry’s production to more normal levels has coincided with a phase of higher cost inflation. Given this broader background, we can be satisfied with our 2024 first-half earnings performance. Our consistent cost discipline while simultaneously raising our productivity and our efficiency has helped us achieve this solid operating result. We aim to continue along this same path. So I look forward with confidence to our seasonally stronger second half-year.”

SWISS’s airfreight business, which traditionally makes a substantial contribution to the company’s overall earnings results, benefited from strong e-commerce activity in the first-half period which helped to offset cyclically weaker general demand in the European and US air cargo markets. The contribution to earnings from SWISS’s airfreight business is now broadly back at its pre-corona levels.

“Our 2024 first-half earnings confirm to us that we have set the right course to deliver a good full-year operating result,” says Heike Birlenbach, SWISS’s Interim Chief Executive Officer. “It’s investing in our future that has put us on this track. In doing so, though, we are well aware that our customers’ needs and the general market situation have changed over the past few years. And it’s with this in mind that we continue to work intensively to further enhance the SWISS travel experience. At the same time, maintaining stable flight operations and offering an attractive network of routes and schedules remain further key priorities.”

A solid second-quarter result

SWISS’s first-half business performance was also reflected in its results for the busier second-quarter period. Adjusted EBIT for April to June 2024 amounted to CHF 233.4 million, a slight decline of some 10 per cent on the prior-year period (Q2 2023: CHF 259.9 million). Second-quarter revenues were raised 3.5 per cent to around CHF 1.5 billion (Q2 2023: CHF 1.4 billion). 

Further year-on-year increase in passenger numbers

SWISS transported some 8.5 million passengers in the first six months of 2024, a 12.3-per-cent increase on the prior-year period. Over 69,000 flights were performed in the period, 13 per cent more than in January-to-June 2023. Systemwide first-half production was raised 12.4 per cent year-on-year in available seat-kilometre terms, while total first-half traffic volume, measured in revenue passenger-kilometres, was up 10.5 per cent on the prior-year period. Systemwide seat load factor for the first half of 2024 amounted to 81.9 per cent, a decline of 1.4 percentage points from its prior-year level.

For the full year of 2024 SWISS expects to report a year-on-year increase of just under 10 per cent in its available seat-kilometre production. This will bring capacity back to around 95 per cent of its 2019 pre-corona level. Production for this year’s summer season is expected to be almost back to its 2019 level.

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