SAIRGROUP REPORTS NET LOSS FOR 2000, CHANGE OF STRATEGY
SAirGroup said it suffered its worth financial year in company history in 2000, due to a substantial loss by its aviation group.
Mario A. Corti, who was named group chairman and chief executive officer on March 15, vowed to realign its overall business strategy, including concentrating on core strengths and unloading its hotel chain.
Success in the group's airline-related divisions, including SAirLogistics and Swisscargo, failed to offset the aviation losses.
Zurich-based SAirGroup reported a net loss of CHF 2.89 billion ($1.66 billion) compared to net profit of CHF273 million in 1999. Revenues rose 24.8-percent to CHF 16.23 billion ($9.36 billion), due largely to acquisitions and organic growth. However, SAir saw an operating loss of CHF 16 million ($9 million).
The combined SAirLines division reported earnings before interest and taxes of CHF 24.8 million ($20 million) on operating revenue of CHF 7.17 billion ($4.13 billion), up 11.7 percent.
Losses from airline investments, value adjustments to loans and provisions established for restructuring costs, asset impairments and contractual obligations impacted SAir's bottom line by CHF 3.73 billion. Steeply rising fuel costs and surplus capacity exacerbated the problem, SAir said.
Swissair recorded a loss of CHF 195 million ($112 million) on operating revenue of CHF 5.79 billion ($3.34 billion).
Corti said the company would make a decision on its role in French airlines Air Littoral, AOM and Air Liberte, which together accounted for losses of CHF 600 million ($344 million). SAir holds a 49-percent stake in each of those airlines.
SAir said it would restructure Belgian airline Sabena, in which it owns a 49.5-percent stake and the Belgium government holds 50.5 percent. Sabena lost euro 325 million ($284 million) in 2000.
LTU, which lost $196 million, and SAir's 10-percent stake in Austrian Airlines are also under review, the company said.
Those results overshadowed SAirLogistics, which posted operating revenue of CHF 1.71 billion ($987 million), up 27.2 percent, and earnings before interest and taxes of CHF 99 million ($57 million). Swisscargo, with earnings before interest and taxes of CHF 69 million ($40 million), made the largest contribution to the results.
Corti, formerly chief financial officer of Nestl', replaced Eric Honegger as chairman and Philppe Bruggisser as CEO. Bruggisser, who was dismissed in January, sought to acquire smaller international airlines in an attempt to patchwork a Swissair alliance.