Swiss benefits from higher ticket prices and lower costs
Published: Thursday, Nov 2nd 2023, 14:00
Updated At: Friday, Nov 3rd 2023, 00:54
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The airline Swiss was again able to increase both revenue and profit in the third quarter. Swiss owes the highest-ever operating profit in the company's history for the period from January to September to higher ticket prices and its lower cost base.
The Lufthansa subsidiary flew in an operating profit of 277.6 million francs from July to September - traditionally the busiest months of the year for travel. Last year, an operating plus of only 220.5 million francs was achieved in the same period. This year's profit was therefore around a quarter higher, while sales rose by almost 11 percent to 1.5 billion Swiss francs.
From the beginning of the year, Swiss revenue was 4.0 billion Swiss francs, according to a Thursday communiqué. Nine-month revenue is thus back at about the same level as in the year before the pandemic. Year-to-date operating profit climbed even more sharply, reaching 615.9 million francs. In 2022, Swiss had only posted a surplus of 287.5 million francs, less than half that amount; before the pandemic, nine-month profit was 490 million.
"We benefited from our competitive cost structures as a result of the restructuring in connection with the Corona pandemic," Chief Financial Officer Markus Binkert is quoted as saying in the Swiss media release. In other words, Swiss has ensured that some of the costs it had to save due to the slump in air traffic during the pandemic phase were not incurred again in the first place.
Lufthansa also posts record result
However, higher ticket prices also played into Swiss' hands. A look at the figures for the German parent company Lufthansa in particular reveals this. Its average revenue per ticket in the third quarter was 25 percent higher than in summer 2019 - and thus higher than ever before. Demand from private travelers remained high, Lufthansa wrote, especially for premium ticket classes.
Accordingly, not only Swiss achieved a record result, but also the Lufthansa Group, which, in addition to Lufthansa itself and Swiss, also includes Austrian Airlines, Eurowings and Brussels, for example. In the months from July to September, it generated revenue of just under 10.3 billion euros. Compared with the previous year, this represents an increase of around 8 percent. Operating profit even rose by almost a third, reaching almost 1.5 billion euros. Only around the time of the Air Berlin bankruptcy in late summer 2017 had the Group earned more in day-to-day business than in recent months.
Positive trend likely to continue
For the time being, neither the bubbling revenues nor the profits are likely to change much. Lufthansa CEO Carsten Spohr still sees his Group on track to achieve an operating profit of at least 2.6 billion euros this year, as planned. The subsidiary Swiss is also optimistic about the rest of the year. Here, they say they expect "a very good result.
For the time being, there is unlikely to be any change in the higher ticket prices compared to previous years - at least as long as the still scarce supply of flights cannot keep up with demand. In any case, Swiss Chief Financial Officer Markus Binkert expects prices to remain higher overall than before the pandemic, as he explained in a conference call with journalists. "The time of bargain prices is over," he said, adding that flying will remain more expensive in the medium term than it was before the crisis.
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