SWISS CEO Harry Hohmeister expects the airline’s daily direct Singapore-Zurich service which took off yesterday (TTG Asia e-Daily, May 13, 2013) to break even in the first year and return a profit in the third year.
Hohmeister is so upbeat on the route’s prospects that, despite investing CHF300 million (US$315 million) to launch it, SWISS will continue its existing Singapore-Zurich codeshare with Singapore Airlines (SIA).
“We believe the market is big enough for two frequencies. The Airbus A340-300 does not offer too much capacity, just 219 seats. So what we are doing actually is developing the market with a new frequency and timing, which also increases the attractiveness of the schedule for both airlines. Therefore it makes sense to keep the codeshare. Customers will have a choice of using the best service he needs,” he explained.
So far, the service has been well accepted, with a “promising booking development” in both economy and business, Hohmeister said. “We are lucky our intercontinental services are well booked throughout the year with a load factor of around 90 per cent. In the beginning, I don’t expect this service will have a 90 per cent load factor; I expect in the 80s in the first 24 months, then 87-88 per cent in the long run,” he said.
SWISS did not intend to dump prices, rather take the position of a premium airline offering “a genuine Swiss product”, he said.
Asked what would make the flight viable today compared with the Singapore-Bangkok-Zurich service, which was discontinued four years ago, Hohmeister said: “We learnt one-stop is not attractive enough for business travellers, especially in a competitive environment to Asia. Secondly, we have renewed our premium product, with lie-flat beds and innovative concepts such as top cuisine. Thirdly, the Singapore market in the last four years has grown more than 40 per cent. And last but not least, the cargo business is sustainable.”
SWISS has ordered a fleet of Boeing 777-300ERs. “We expect the Singapore market to grow further. The city is dynamic and therefore the market to Switzerland will grow and, with that, the B777 could be the aircraft (in 2016 or 2017),” he said.
– Read the View from the Top in TTG Asia soon
