Why is Swissair in a Climb?

To understand Swissair you need to be able to understand Switzerland, a nation that considers a 3% unemployment rate catastrophic and5% inflation verging on economic collapse. Most of the international recession has escaped this relatively tiny nation which relies upon tourism as one of its primary income earners. In this arena Swissair is a major contributor to the economic well-being of the nation, it not only provides direct employment for 16,000 people but returns hundreds of millions of dollars annually to the national coffers in the form of foreign exchange. As an airline Swissair is in the big league. Its 50 or so aircraft service98 ports in66 countries while Swissair representation is maintained in more than200 cities in every corner of the globe. In fact, Australia is the only continent they do not directly fly to!

In 1982 the airline made a net profit of $18 million, several million down on its 1981 results, but still a profit in an era noted for combined ICAO losses calculated in the billions. In 1982 the carrier flew 7,168,567 passengers (more than the entire population of Switzerland) on 73,635 flights over a route network extending over 309,930 kilometres.

How then in a recession does Swissair make a profit?

Essentially Swissair has several factors in its favour. Firstly, it is by tradition a businessman’s airline (like Lufthansa and JAL) and therefore it enjoys a strong demand for its first class and full-fare economy service. Swissair carries a higher proportion of full-fare passengers per flight than most other airlines. This is particularly so on all routes except those to the Far East where cutthroat competition with the Asian carriers has resulted in a degree of discounting that has lowered yield well below typical Swissair levels. Yield is indeed the magic word and Swissair pins its economic well-being on the pursuit of the high-yield customer. To this end Swissair has maintained a two-class system; first and economy, or Swiss- Class. Despite the marketing euphemism Swiss Class is certainly better than the economy standards found on most international carriers. A high standard of service and an excellent track record for on-time scheduling makes this the businessman’s choice.

The second point in the profit conundrum is that by being Swiss, the carrier can by virtue of its neutral standing operate in ports considered taboo by many countries. Our own situation with Qantas and South Africa says it all – Swissair operates into most of the major African ports just as it does into China, Russia, Eastern Europe, the United States, throughout the Middle East, Asia and South America. This ensures a higher degree of on-carriage and provides a reliable link with a reliable and efficient airline in many parts of the world where it is nice to have a friend. In ports such as Tripoli, Libreville or Dar es Saleem it must be very nice to know that the airline you came in on remembers your name when it’s time to depart. Swissair is also often the first carrier to be politically able to resume active use of an air corridor over previously restricted airspace. Typical examples here would be the routing nowadays from Hong Kong to Karachi where Swissair is amongst a handful of carriers allowed to direct track across China; taking the once traditional southern route via Thailand adds hours to the sector and in a discount environment can only spell deficit regardless of load factor.

A third reason Swissair is a money spinner is that it operates, and has always operated, on a traditionally strong financial basis. Switzerland of course is the world’s banker in one way or another and her national carrier has consistently operated on the same monetary formula. The fleet is depreciated over twelve years to 10% residual value at which time it is generally sold and replaced with more efficient aircraft offering a higher overall level of operational reliability, passenger comfort and fuel efficiency. The average age at present of the 50-odd aircraft is around six years, while specific aircraft types are replaced on a type-by-type basis taking into account the routes they service. In this situation, Swissair utilises a fleet mix of five different types with the newly acquired Airbus A310 replacing the DC-8s through the current financial year. In more detail, the fleet comprises:

Boeing 747-300

Swissair entered the jumbo era in 1971 when it introduced two Boeing 747-257 aircraft specifically for its North Atlantic services. The type is now being replaced in turn by the 747-300 Extended Upper Deck aircraft. Five of these giants have been ordered, two Combis and three all-passenger aircraft which will be able to carry 272 and 386 passengers respectively. Combined with the latest technology Pratt & Whitney JT9D-7R4G2 engines and the extra seat capacity the EUD is recording fuel burn savings per seat mile in the order of 15% over the early series 747. The original 200 Series aircraft were sold in 1982 to a Scandinavian group and leased back by Swissair to augment the new EUDs. The two early Series aircraft finally retired at the end of 1983 by which time Swissair will operate two EUDS on the North Atlantic and Far East routes.

McDonnell Douglas DC-10

The much-maligned DC-10 is a well-respected and highly reliable aircraft according to Swissair. Landing the aircraft on a runway crowded with construction equipment, flying them into mountains, sloppy maintenance and leaving cargo doors unlatched are not the basic fault of the design, claim Swissair. Indeed the carrier made headlines when it decided to fly in the face of the US FAA DC-10 grounding in 1979 following the American Airlines Chicago crash which itself was initiated by Inappropriate maintenance procedures. Swissair believes that few in the FAA even realised that overseas carriers operated the type, did not take into account the overall safety record of the aircraft or the specific circumstances of the accident. A scapegoat was required and the Ten was it. Swissair did however have to concede to international pressure and so along with dozens of other carriers had to see earnings erode while perfectly safe aircraft were parked against the fence.

Swissair received the first of 12 DC-10-30 aircraft in 1972. Configured for 235 passengers the Series 30s have provided a highly reliable service over the past decade into routes where 747 operations would not be justified. It is not in the scope of this article of course, but one wonders how much money Qantas (as an all 747 operator) could have saved over the past decade with a number of similar aircraft. The carrier set another launch record when it took delivery of two DC-10-30ER (Extended Range) trijets in 1982, again being the launch customer for the type. The DC-10fleet will be progressively replaced by a new technology aircraft of similar sizing later this decade. Swissair are making no secret of the fact that the proposed McDonnell Douglas MD-100 trijet is high on their list of contenders for this twelve to sixteen aircraft order.

McDonnell Douglas DC-9

Swissair are what one might call a good customer of the firm of Douglas Aircraft. Over the decades they have operated the DC-2, DC-3, DC-4, DC-6B, DC-7C, DC-8, DC-10 and several marques of the DC-9 including being the launch airline for the successful Super 80 series. Swissair currently operates 15 of the Super 81 variant, 12 of the -51, 5 -32 and a lone -33F freighter which is a sister ship of sorts to IPEC’s VH-IPF. Swissair replaced its initial brace of DC-9-15 and DC-9-32 aircraft during the early eighties with first-of-type Super 81s, an aircraft that has a long queue of pilots wanting to fly it due to its excellent handling characteristics. The airline is also enthusiastic about the Super 80 family and are content that they have ‘their 150-seater’ now and not in six years’ time at twice the price. In fact Swissair points out that the Super 81s have the same per-seat fuel burn as the Airbus A310s just entering service! The DC-9 fleet is used largely in Europe though the 81s can range down as far as North Africa with maximum passenger uplift. Swissair plan to entirely phase out the sole remaining -33F freighter early next year though the remaining five -32s will continue in service through to 1988. Swissair would not be looking at introducing a DC-9-81 replacement till at least 1995 while the Series 51s will successively be replaced by additional Super 80 variants (probably 83s) through the latter half of this decade.

McDonnell Douglas DC-8

This aircraft provided the backbone of the Swissair expansion programme throughout the nineteen sixties. Taking up where the ill-fated Convair jet left off, the Swissair livery has been worn successively by the DC-8-32, DC-8-53 and currently by the DC-8-62. The four surviving -62 aircraft are in immaculate condition and yet will be withdrawn from service by mid-84. Sadly today their operating economies are just not good enough despite the thousands of cycles remaining in their airframes. These are the only aircraft that Swissair will have trouble selling. Swissair aircraft, like Australian registered marques, are highly desirable products on the used aircraft market and Swissair often receives more (not accounting for inflation) for used aircraft after twelve years’ service than what they originally paid for them. The DC-8s though, like hundreds of 707s and DC-8s around the world, will most probably be used for ad-hoc freight or simply broken up for salvage. The DC-8 routes will be taken over by the A310 in due course.

Airbus lndustrie A310

Swisssair again was the launch customer for this aircraft along with Lufthansa, though the former was the first to operate the type commercially. Swissair has 10 A310s on order while the final four of the order will be the -300 variant which is capable of operating a maximum payload uplift out to 4000 nautical miles. By year end Swissair will operate four A310-200 aircraft with their immediate traffic emphasis being on the high-density European sectors.

Like carriers round the world, Swissair is dedicated to saving money. The wholesale acquisition of the latest technology fuel efficient airliners plus the development of traditional high-yield markets will ensure that this carrier continues to make a profit in the years ahead. On time performance is a must for the Swiss carrier which claims, tongue in cheek, that its scheduling runs like clockwork. On-time departures and on time arrivals are a must for the business traveller and to this end Swissair is aided by the Category Ill capability now operational on the majority of its fleet. Primarily used in Europe, which has winters that we Australians cannot conceive, the Cat Ill facility allows fully automatic landings down to a minima of 200 m visibility in the horizontal plane and only 15 m decision height in the vertical. Since the system has become operational the results have been quite revealing. For instance, in the period between October 10, 1982 and the end of the year, some 6000 DC-9-81 passengers in a total of 76 Cat Ill landings reached their planned destination on schedule despite adverse weather conditions. The record of the DC-10 is still more impressive: in over 283 Cat Ill landings since 1978, no less than 43,000 passengers have escaped the loss of time and sheer inconvenience that used to be associated with airport fog.

Not all of Swissair’s revenue comes from its airline operations though. Around 20% of the total is derived from its extensive forays into the tourism and accommodation industry within Switzerland and its 57% ownership of subsidiary airlines Balair and CTA. Balair operates one DC-10-30, one DC-8-63, two DC-9-30 Series and a DC-9-81 leased till 1987 from Swissair. Balair is an international charter operator attending to charter traffic not usually fitting into the market area of a regular scheduled operator such as Swissair. Balair’s daily utilisation is somewhat less than Swissair’s while much of the traditional European linked charter market is seasonal, obviating the need to purchase outright new aircraft. In this manner, Balair saves money and retains profitability by operating with used Swissair aircraft.

Swissair’s other airline interest is CTA, a Geneva-based regional charter operator employing four Caravelle jets. CTA operates charters as far away as the Mediterranean while Swissair maintenance looks after the Pratt & Whitney JT8 engines and the manufacturer performs airframe maintenance at Bordeaux, France. CTA also achieves much high-yield specialist charter work with the Caravelles in first-class configuration for special industry groups. CTA will probably replace the low-utilisation Caravelles with ex-Swissair DC-9-50s in due course.

Pilot training is a story in itself at Swissair as most of the aircrew under the age of forty are also operational with the Swiss Air Force, flying Hunters, Alouettes, Tigers or Mirages when not punting 747s across the Atlantic.

Training is conducted at the Swissair-operated, but government-sponsored, Swiss Civil Aviation School (SLS). Here ab initio student and military pilot alike learn to become future line pilots. The school operates a sophisticated training centre using state-of-the-art audio-visual training aids and has a very high pass rate. A flight training base is operated by SLS at Hausen, central Switzerland where SIAT 223, Piaggio P-149 and Pilatus PC-7 aircraft are used in addition to a facility at Vero Beach, Florida where Flight Safety conducts training under contract using Piper Aztec twins. Successful students then return to Europe where they carry on their training programme at Bremen in West Germany on the Beech Super King Air in what equates to a fairly typical European civil operating environment in regards to local traffic and weather conditions. The trainee then returns to Swissair’s Zurich training base for work-up to Cat Il standards on the applicable simulator. The trainee usually commences as a right seater on DC-9s, thence onto DC-10s and usually back to the DC-9 as Captain before tackling the left seat in the wide bodies.

Simulators play a leading role in Swissair planning these days. Usual type transition takes from ten to fourteen three-and-a-half Swissair will withdraw the last of its DC-8 Series 62 jets early next year. Majority of DC-8 routes will be taken over by the Airbus A310. hour sessions on the simulator then two to three hours’ flight time for full type endorsement. Swissair is hoping to be able to transition completely using only the simulator for the A310 programme. The current inventory of simulators at the Zurich base is six with two more due to be delivered by year’s end. Swissair operates one DC-8 simulator, which they will probably retain and lease the time out to existing DC-8 operators much as they kept their Convair 880/990 simulator running till the late seventies to support Spantax. They also operate a DC-9-32 and a-51 simulator plus two Super 81s. A 747-300 and A310 simulator will be operational shortly. The simulators cost about one-tenth the cost per operating hour compared with training in an aircraft while the fleet typically averages over 4000 hours per simulator per annum. Simulators are run six days a week, eighteen hours a day except the Super 81s which perform round the clock seven days a week!

It is interesting to note that Swissair has just accepted its final course of Flight Engineers. There are about 190 FEs in Swissair for nearly 900 pilots. The two man Forward Facing Crew Compart- ment (FFCC) on the A310 has been accepted enthusiastically at Swissair who did much of the pioneering development work with Airbus on the original concept. By next year the only Swissair three-crew aircraft will be DC-10s and 747s; as far as Swissair is concerned the FE has gone the way of the navigator and the wireless operator before him.

On the maintenance side Swissair has saved considerable investment by joining with KLM, SAS and UTA to form the KSSU maintenance consortium. The objective of KSSU is that the four carriers pool their resources with each specialising in a particular area of operation to reduce overall support costs and to gain a more equitable economy of scale. KLM and SAS, for instance, look after the General Electric CF-6 engines. Swissair overhauls the Pratt & Whitney JTB and JT9 engines and does heavy maintenance work on the DC-10s while SAS performs airframe work on DC-9s and A300/310 and UTA undertakes APU rebuilds and also specialises in landing gear overhauls.

The Zurich jet base also undertakes heavy maintenance for a large number of client operators. DC-10 jetliners from Philippine Air Lines, Garuda, MAS, Thai, Air Zaire, Nigeria Airways, Air Afrique, Viasa, SAS, KLM, Martinair and Balair all undergo their heavy maintenance D service by courtesy of Swissair. The D service is undertaken every four to five years routinely at around 15,000 to 20,000 hours of flight time. AD service takes two full weeks with a team of 300 specialists accumulating around 30,000 man-hours in an operation that virtually returns the entire aircraft to its original condition. An interesting sidelight was that during a D service, a DC-10 will typically take on some three tonnes of fresh paint in the rejuvenation process.

Swissair, in an age of struggling private airlines and heavily subsidised flag carriers, is a refreshing breath of reality. Sound planning, a diversified fleet and efficient service using a combination of the latest technology all help to reduce operating costs and produce one of the world’s most effective airlines. The DC-8 has been beaten by economics and the high cost of fuel.