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Swiss stands strong

Swiss International Air Lines copes with rising competition from regional carriers with a new pricing strategy and an increased network
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With 22 destinations added to the Zurich hub of the SWISS network for the summer, commuters from the GCC to Europe have had a lot to smile about.

“SWISS is very strong in Europe,” says Mark Pey, head of Gulf and Pakistan at Swiss International Air Lines (SWISS). “We now offer about 80 destinations in Europe all in all.”

Some of these new points from the airline’s Zurich hub include Leipzig and Dresden in Germany, Toulouse in France and Graz in Austria. For Italy the seasonal service to Palermo introduced in 2014 becomes a year-round affair, while Bari, Naples and Brindisi are also added to the network.

Dubai and Muscat are the two exclusive destinations in the GCC served by SWISS, with a daily flight to/from Zurich.

Rising competition

SWISS enjoys a unique proposition wherein it flies from Muscat in Oman and stops to pick passengers from Dubai onwards to its hub in Zurich.

Says Pey: “We are based in the home turf of some of the biggest carriers in the Gulf like Etihad Airways and Emirates. We are facing tough competition in flights going to Switzerland.”

He continues: “Etihad started last July with operations from Abu Dhabi to Zurich, Emirates will be starting with a second daily A380 service to Zurich come October, adding about a 945 seats a week, and we will definitely feel that. But, we are holding our position and our market share and believe we will be doing that in the future as well. Our Business Class is doing extremely well in this market.

“We have to be realistic. We are playing in the turf of Gulf carriers and are perceived as a niche or a boutique carrier in this region. Our strategy is to position ourselves as a quality airline in Dubai and Oman, one that has a strong connection with its home market.”

Commenting on the sultante’s tourism potential, he says: “Oman is the best place to visit in the region – I have lived there for more than four years. It has a lot to offer – beautiful coasts and mountains and water bodies and lush greenery.”

Pricing strategy

As a response to the growing competition, SWISS has had new pricing strategy for the Middle East, whereby it is reducing its lower fares to align more realistically with Gulf carriers. The new options form part of a new fare concept for all the airline’s services within Europe that offers customers greater choice and flexibility.

The new concept features three Economy Class options alongside the Business Class fare. All four fares include the flight, one piece of carry-on baggage, an inflight snack and drinks, a firm seat assignment when checking in within 23 hours of departure and Miles & More award and status miles.

 All SWISS travellers will also continue to enjoy the airline’s reputed inflight service featuring SWISS regional products. All the fares and the services they include are available in any outward-and-return-travel combination.   

The new Economy Light fare is the low-price option for customers who will be travelling with hand baggage only and do not need any ticketing flexibility.

For an additional fee, Economy Light customers can also add a piece of registered baggage and/or a seat reservation to their booking.    

The Economy Classic fare entitles the customer to all the services they have previously enjoyed with a SWISS Economy ticket, such as one piece of registered baggage and a firm seat assignment. Economy Classic is available to any European destination for a supplement of CHF25 ($26.8) one-way or CHF50 ($53.7) round-trip on the Economy Light fare.

The new Economy Flex fare is aimed primarily at travellers who need total flexibility in their travel plans and are seeking a more comprehensive range of included services such as choosing the preferred seating zone at the front of Economy Class, and rebooking at no extra charge. The price difference compared to Economy Classic varies from route to route between CHF30 ($32.2) and CHF100 ($107.5) one-way.

The many benefits of Business Class now also extend to total rebooking flexibility and full refundability. Business Class is SWISS’s top European travel product, and is particularly suited to those flying on business and discerning leisure travellers.  
 
 Half-yearly results

The strong Swiss franc will continue to exert a negative influence on both revenues and business operations, says the half-yearly financial results report released by SWISS. But under present conditions, and in view of the currently low oil prices, SWISS expects to see a positive net impact on overall results for the year.

SWISS generated a total operating income of CHF 2.44 billion ($2.62 billion)in the first six months of the year, a 3 per cent decline on the same period last year. Still the airline posted first-half earnings before interest and taxes (EBIT) of CHF214 million ($230.2 million), a substantial increase on the CHF114 million ($122.6 million) of the prior-year period. The much-improved EBIT result is primarily attributable to low oil prices and the actions taken to reduce costs.

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