Swiss Eyes No Frills Market - Report

May 2, 2003

Switzerland's national carrier, Swiss, which is facing major financial problems, is reported today to be entering the crowded European budget market.

According to the Financial Times, the airline is preparing to convert its regional operations into a new, low cost off-shoot which will launch later this year.

The struggling company, which was created from the ashes of failed Swissair, is quoted by the newspaper as saying that the step is being taken in response to "new market conditions to offer low-cost air connections, especially within Europe."

In its first full year of operations Swiss posted losses of CHF980 million (USD$729 million) and said it suffered from a price war among airlines and the challenge of no-frills competitors in Europe.

It is understood that the Swiss government, the largest investor in Swiss, has refused to pump any more money into the airline.

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