SWISS International Air Lines, successor to bankrupt Swissair; sustained during 2.002, it's first year of operation a loss of 980 million Swiss francs (U$D 725 million) for the year. The overall annual results were better than originally envisaged.

The result was affected by exceptional expenditure totalling Swiss francs 322 million. Net of these one-time charges, the loss for the year amounted to 658 million Swiss francs ( U$D 483 million ) in its first year of operations .

SWISS's full financial statements for the 2002 business year will be published on March 25, 2003.

The company incurred some Swiss francs 180 million in one-off costs deriving from its expansion from a European regional airline into an air carrier operating an intercontinental route network and its introduction of the new SWISS brand. The depressed economic climate and deep crisis in the global aviation industry are having a serious negative impact on business development at SWISS and have forced the executive management to take swift action. Despite a higher market share, revenues and passenger numbers are in sharp decline on the European network, Swiss International Air Lines believes it is essential to react to the worsening economic situation by adjusting its route network and reducing its fleet. The changes will come into effect with the summer timetable from 30 March 2003.

SWISS is to take 20 aircraft out of operation. The aircraft involved are one Airbus A321, two Boeing MD-83s and 17 regional jets. This means the SWISS European fleet, including the Airbus A320s, will total maximum 84 aircraft.

Capacity adjustments will be developed in Zurich, Geneva, Basel, Bern and Lugano affecting various destinations. Frequencies from Zurich to London City, Graz, Hanover, Cologne, Nuremberg, Prague, Bucharest, Nice, Munich, Madrid and Barcelona will be reduced. Connections to Salzburg, Sarajevo, Tirana, Toulouse, Jersey, Guernsey, Dresden, Bremen, Turin, Bilbao and Göteborg will be discontinued. From Geneva, connections to Alicante, Seville and Berlin are to be discontinued.

Up to 700 jobs will be affected: around 200 amongst cockpit crews, 200 amongst cabin crews and 300 amongst managers and ground staff. SWISS will work in consultation with the unions to find the best possible solutions.

SWISS is expanding its offer by means of codeshare agreements. A few days ago, agreements were signed with Japan Airlines for the Zurich - Tokyo route and with Qantas for the Zurich - Sydney route. Both will enter into force with the introduction of the Summer timetable. The codeshare with Qantas of Australia allows SWISS to offer now flights to all five continents. SWISS and Qantas have also aligned their frequent flyer programmes. This enables their members to collect frequent flyer miles over a major part of the networks of both airlines.

Back in December last year a far-reaching codeshare agreement was reached with Finnair, following a similar agreement with Iberia in November. This all means that SWISS now has codeshare agreements with six of the Oneworld alliance partners (including American Airlines, British Airways and Aer Lingus). Swiss WorldCargo, the cargo unit announced the package of emergency measures announced by SWISS, will have a very little impact on their services, as current cuts on route and network will not affect the cargo division. Swiss WorldCargo will therefore continue timebeing to serve its existing customers and destinations.