Embattled airline Swissair said today it was speeding up asset sales and cutting 1,250 jobs as charges for its German charter subsidiary LTU further eroded a wafer-thin equity base.
It reported a first-half net loss of $140.5 million against a profit of $1.8 million a year earlier. Swissair said it would sell stakes in airport retail and ground-handling businesses that would allow it to pay off some unsecured bank loans in case banks wanted early repayment.
The group, struggling to cut costs and a mountain of debt after a record loss in 2000, also announced it was cutting some 250 management positions and 1,000 other jobs from the 72,450 people employed.
Swissair said it would use the proceeds of the rationalisation programme for early repayment of unsecured loans from banks that no longer wanted to support the group.
In the future, it will work with a small number of banks that support the group and its strategy, it said.
Swissair said the economic slowdown in the US - which was hitting Europe - in addition to high fuel prices and a strong dollar had affected the whole sector and hurt industry profitability. US and European airlines have been reporting significant declines in six-month results.
The company said in a statement: "The Swissair group has started on the road to recovery. Tangible progress has been made and management is fully committed to turning the group around. However, the pace of change needs to be accelerated further".