SWISS to join Oneworld

right, just got this email forarded to me by my dad…

Swiss Travel Club Silver member newsletter

Dear Doctor Breckenridge

Once again I’d like to take this opportunity to inform you firsthand about the latest developments at SWISS. Our business plan is proceeding as planned, and in this context I’m happy to announce that the alliance question has been resolved and SWISS has reached an extensive agreement with British Airways and is joining the oneworld alliance. In doing this, SWISS has chosen the best out of various options on the table and the one which guarantees the most excellent customer benefits.

As I’m constantly striving to provide you, our valued and loyal customer, with direct and up-to-date information, please find attached below a copy of the detailed press release which is currently being circulated. You can rest assured that you will be regularly updated about the developments at SWISS and its new partners as more details are being worked out in the coming weeks and months.

Kind regards,

William L. Meaney

Managing Director
Chief Co mmercial Officer

SWISS to join oneworld

SWISS has accepted an invitation from the oneworld alliance to become a member of this global grouping of leading air carriers. SWISS’s customers will benefit from this development in the form of a substantially-expanded range of services. SWISS’s passengers will also enjoy the benefits of the frequent flyer programmes of all the oneworld partners and of better connections and easier transfer service. In a parallel move, SWISS and British Airways signed a memorandum of understanding which will lead the two airlines into a strategic alliance. Its membership of oneworld and its agreement with British Airways significantly enhance SWISS’s business prospects and perspectives. The oneworld members also aim to make greater use of Zurich Airport as a hub for the Central European market.

After intensive negotiations, SWISS has achieved one of its most important strategic objectives: membership of a leading global a irline alliance. SWISS becomes the ninth member of the oneworld partnership, joining reputed carriers American Airlines, British Airways, Qantas, Cathay Pacific, Iberia, LanChile, Finnair and Aer Lingus. SWISS’s customers will benefit from new connections and more frequencies: oneworld operates over 8 600 flights a day to more than 570 destinations in 136 countries. SWISS customers can earn and redeem frequent flyer miles on all oneworld services. They will also enjoy access to the 380 airport lounges on all six continents provided by oneworld’s members.

A new oneworld member

As a fully-fledged member of oneworld, SWISS can substantially enhance its existing collaborations with the various other members and expand these throughout the alliance. In extending their invitation to join the alliance, the current oneworld members have also confirmed their confidence in SWISS and its new business plan. SWISS expects its membership of oneworld to produce a d irect commercial benefit of some CHF 100 million a year. The existing oneworld members have jointly generated additional revenues of more than USD 2 billion over the past three years through their membership of the alliance.

SWISS’s oneworld membership will benefit Zurich Airport: the airport is set to become a new hub in the global alliance’s network. The oneworld members intend to direct more of their services via Zurich, to make full use of the airport’s available capacity and high comfort levels.

Alliance with British Airways

SWISS and British Airways have also concluded a memorandum of understanding which will lead to a fully-fledged strategic alliance between the two partners. The memorandum outlines the content of a series of commercial agreements, including an Alliance Agreement, which the carriers will formally sign by October 24.

The Swiss TravelClub, SWISS’s current frequent flyer programme, will be gradually integrated into Br itish Airways’ Executive Club. Miles already earned with SWISS will retain their current validity.

The parties will also establish joint-venture flight operations between Switzerland and the UK that will include extensive codesharing. British Airways will obtain the right to enter into slot-exchange agreements in respect of eight of the 14 daily slot pairs which SWISS currently holds at London’s Heathrow Airport.

SWISS to continue on its chosen business course

The membership of oneworld and the alliance with British Airways will enhance SWISS’s business prospects and perspectives in a number of key respects. This in turn will put the current SWISS business plan on an even firmer foundation.

While oneworld membership marks a key strategic milestone for the company, SWISS will continue its current programme towards sounder business health. These efforts will focus in particular on bringing cost down to (and maintaining them at) highly comp etitive levels.

SWISS has already successfully introduced a number of cost-cutting measures over the past few months. The implementation of the new business plan is well on track:

Some 80 per cent of the company’s “Foundation for Winning” restructuring programme has already been put into effect. SWISS expects the programme to generate total bottom-line improvements of CHF 1.6 billion a year.
The SWISS network and fleet have been resized, with capacity lowered by 35 per cent and fleet size reduced from 137 to 79 aircraft. The associated workforce downsizing will be completed by the end of the year.
Negations with supplier brought cost reductions over target.
The proportion of overhead has been sizably reduced.
The new “SWISS in Europe” product launched at the end of August has got off to a strong start. The concept of permanently low fares to all European destinations, improved online booking facilities and an enhanced inflight serv ice (for a fee) in Economy Class has been very well received, and bookings were up 50 per cent in the product’s first month.

SWISS will continue to maintain its successful premium product on its long-haul services, which will in future be performed by a fleet of nine Airbus A340 and nine Airbus A330 aircraft.

Provision of adequate liquidity reserves

SWISS has been conducting intensive and constructive discussions with the major banks and a number of its main shareholders (including the Swiss Confederation) over the last few days. These discussions have centred on SWISS’s desire to secure sufficient liquidity reserves to cushion the company against the impact of any unforeseen events.

In the course of these consultations, UBS and Credit Suisse have had the opportunity to examine the business plan presented by SWISS and the collateral which the company would be able to offer. On the strength of their current findings, both banks see possibilities o f financing part of the liquidity reserves desired on terms which are customary for such activities within the banking sector. They would be prepared, subject to certain conditions, to jointly assume a certain amount thereof against securities. SWISS is also in discussion with further possible sources of the credit facilities it requires, including certain major shareholders. In addition to this, British Airways, its new alliance partner, has agreed to provide a guarantee for CHF 50 million, secured against slots at London Heathrow. The Swiss Confederation is also considering possible means of enhancing certain framework conditions.

SWISS is confident of bringing its current negotiations with possible financing partners and the Swiss Confederation to a successful conclusion. And this, together with the contribution to its bottom-line results which is expected to derive from its membership of the oneworld alliance, should ensure that the company can retain adequate liquidity reserves in the longer term.

SWISS in Europe

Swiss Economy in Europe: food & beverage for purchase from October 1, 2003

On August 28, SWISS launched its new concept for European air travel. We are pleased to report that the results to date are even better than expected which indicates that the new product is in line with customer needs.

Besides permanently low fares for all of Europe and a flexible booking system on our http://www.swiss.com website with lowest fare guarantee, we have also revamped our inflight product.

Effective October 1, you can purchase food and beverages on most flights in Swiss Economy. We offer a wide selection of fresh sandwiches, salads and a range of snack items, along with an extensive bar service. This innovation allows us to offer you the greatest choice of high-quality food available in economy class on any European network carrier.

On particularly short flights, however, no inflight food and beverage ser vice is available. In such cases, we suggest you use the food services at the airport prior to departure. This policy is in effect for flights between Zurich and Frankfurt, Luxembourg, Milan-Malpensa, Munich, Nuremberg and Stuttgart, as well as flights within Switzerland.

If you’re travelling in Swiss Business, you can look forward to our proven, full-service product complete with tasty meals, fine wines and other beverages and attentive cabin crews.

Click here for a detailed overview of the inflight offer.

New: one-class Swiss Economy version on small regional aircraft

Most of our European fleet operates in two-class configuration, but from October 26 our Embraer 145 and Saab 2000 fleet will be in service in Swiss Economy configuration only.

Feedback

This e-mail is for your information only. If you have any questions or messages please visit us at http://www.swiss.com/contacts-reservation.

Anyway, about bloody time too, if you ask me.