Headed firmly for a turnaround, SWISS is to take drastic action to cut costs: 34 aircraft are to be withdrawn from services and around 3000 jobs will be lost. The new and massively reduced SWISS is reacting to far reaching changes in the airline market: on intercontinental routes SWISS will offer its usual premium quality in three classes, whilst on European routes, passengers will in future be able to choose between alternative price and comfort levels themselves. In a meeting held on 23 June, the Board of Directors of Swiss International Air Lines approved the new Business Plan. All in all, the number of seat-kilometres is to be cut by 35%. The changes will become effective on the 2003 winter timetable.

The enduring crisis in the airline industry points to sector-wide consolidation. Only healthy, well positioned companies will survive. The SWISS management has decided to take incisive action in response to this development. SWISS must reduce both its network and its fleet, continue to cut costs and shed a substantial number of staff. The SWISS Board of Directors announced they are convinced that the planed restructuring is an essential condition for the survival of SWISS.

Premium on long-haul routes - efficient and cost-effective in Europe SWISS plans to launch an innovative European concept this autumn, when it will become the first scheduled service airline to offer both a Premium Business Class and an extremely competitively priced Economy Class on European routes. This in order to meet customer demands for competitive cost levels. The benchmark figures set out in the Business Plan provide for a reduction in costs totalling CHF 1.6 billion. Necessary adjustments will be made to SWISS network. Focusing on profitable routes and destinations. The network must, therefore, be trimmed by up to 35%. In line with this, there will also be a substantial reduction in the number of destinations served from all SWISS locations in Switzerland. On the precise number and choice of destinations to be eliminated SWISS is informing first its partners. The key markets will be maintained in the network.

This reduction in destinations and frequencies will allow SWISS to reduce their fleet to 74 aircraft (excl. Charter). Will retain 18 aircraft in the long-haul sector (MD-11, A340, A330), 21 in the medium-haul sector (A320 family) and 35 in the regional sector (Saab, Embraer, Avro).

The reductions in the network and fleet will inevitably mean corresponding job cuts, i.e. around 3,000 redundancies. This is a painful measure, and SWISS is consulting with the unions to find the most partnerly solutions. Around 700 cockpit jobs, around 850 cabin jobs and up to 1500 jobs on the ground are affected.

Excellence on intercontinental routes and efficiency on European flights are where our future lies. The restructuring will also lead to a strengthening of the company's position in the alliance negotiations.