Such a decision would have been unthinkable a few years ago. But today’s airline business is more hard-nosed than ever and weekend reports in the Sonntagszeitung suggest that Zurich-based Swiss may withdraw from Geneva in 2018.
Why? It is because national airline Swiss continues to lose money on its Geneva short-haul operations. And Swiss, which is a member of the Lufthansa Group, is under pressure to save money wherever it can.
According to the airline’s staff in French-speaking Geneva, a business plan is being drawn up which would see its operations being taken over by Lufthansa’s subsidiary Eurowings with its lower [than Swiss] operating costs.
Lorenzo Stoll, the local Swiss chief [for the Geneva region] is quoted as saying, “Our goal to be profitable on the short-range [routes] has not been achieved despite extensive efforts.”
The problem that Swiss faces in Geneva is that its market share is small compared to its budget rival Easyjet. And Geneva is Easyjet’s base in Switzerland.
Rts.ch claims that Swiss holds only 15 per cent of the Geneva market compared to Easyjet’s 40 per cent share.
Easyjet’s low fares mean that Swiss is under considerable pricing pressure in the Geneva market.
Indeed, as we reported on this website in 2013, it was Geneva where Swiss first trialled cheaper HBO (hand baggage only) tariffs in a bid to compete (on price) with Easyjet.
But if Eurowings (with its standard fleet) were to take over short-haul routes from Swiss then what would happen to the latter’s services to London City which require specialised aircraft ?
And would Swiss continue to maintain its sole long-haul route between Geneva and New York?
In a press office statement, Swiss says “We are very confident that we can continue with the current set-up in Geneva.”
Lufthansa’s Eurowings faces long-haul headwinds. Lufthansa now finds that long-haul, low-cost is not as easy to achieve as it once might have thought.
Its Cologne-Boston route (which started only on May 30) will come to an end on August 28, some two months earlier than planned. While another route, one linking Cologne with Dubai, planned for December 15 will not now go ahead.