New Swiss airline still struggling

Swiss International Air Lines saw losses narrow in 2003 after the airline formerly known as Swissair said it faced daunting challenges in 2004.

Restructuring, which has included reducing the size of its network and fleet and cutting 3,000 jobs, had helped trim operating losses to CHF497m (€315m) from CHF909m (€577.43m) during the same period in 2002.

SIAL has reportedly been in talks with banks in an effort to secure up to CHF500m (€317m) of additional financing needed to cover any operational difficulties.

Speculation is rife that lenders may be looking to the Swiss government to underwrite additional loans.

After CHF205m (€130m) of restructuring charges, Swiss reported a net loss of CHF687m (€436.50m) down from a loss of CHF980m (€623m) the year before.

Sales were recorded at CHF4.13bn (€2.62bn) down from CHF4.4bn (€2.80bn).

Analysts believe the results indicate that SIAL is not yet ready to compete with its European rivals.

The International Air Transport Association has already stated that the airline industry should return to profit this year for the first time since September 11, 2001.