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ZURICH, Jan 17 (Reuters) - Swiss International Air Lines' board meets on Monday to discuss an overhaul of its struggling regional fleet, prompting the carrier to ask the Swiss bourse to suspend its shares until Tuesday.
"The meeting will include the presentation of a restructuring concept involving part of its regional aircraft fleet. A number of options will be discussed here," Swiss said in a statement on Monday.
The airline asked the Swiss stock exchange to suspend trading in its stock until 1100 GMT on Tuesday "to prevent any uncertainty on the capital markets", it said. Swiss did not comment further.
On Sunday, a newspaper reported Swiss was set to announce renewed restructuring measures this week, including putting its regional operations -- part of the European business, where passenger numbers are dwindling -- into a separate company.
It could then sell part of the regional aircraft fleet and renegotiate wage contracts with staff.
As recently as December, Swiss' Chief Executive Christoph Franz had argued the two units were linked and that it made no sense to separate European and intercontinental business.
OLD IDEA
Any move to put the regional operations into a separate unit would mark Swiss's second attempt to launch a separate cut-price, no-frills regional airline, after initial plans for such a concept -- dubbed Swiss Express -- failed in 2003 in the face of strong opposition from pilots' unions.
"The idea is as old as Swiss. What has changed now to make it work?," said Zuercher Kantonalbank analyst Patrik Schwendimann, who has an "underweight" rating on the stock.
"It is well possible that (Swiss is) aiming for this solution and that it will be announced tomorrow but the question is whether it can be executed and whether it can be turned into a substantial advantage," he added.
Passenger loads have been falling on Swiss' core European routes, where on average it fills just over half of its available seats amid fierce competition from low-cost carriers such as EasyJet Plc .
Faced by tough competition, high oil prices and talk that Swiss may still be too large for its small home market, the airline has slashed jobs, its route network and fleet.
Swiss, born in a public-private bailout from the ashes of predecessor Swissair, which collapsed in late 2001, has said it needs to cut costs further if it is to become profitable.
"Fact is that something has to be done and that Franz has been around for a while. People are waiting for a solution," Schwendimann said.
Reports over the weekend also said that Lufthansa had been in contact with Swiss shareholders about a possible partnership but the German carrier insisted on Monday it was not in talks with Swiss or its key shareholders, which are led by the government and banks UBS and Credit Suisse.
Speculation had been running high last year that Swiss could turn towards its larger German neighbour after it failed to join the oneworld alliance led by British Airways.
Swiss expects to report an operating loss for 2004 but has forecast its first-ever annual profit this year.
Its volatile, closely held shares closed at 9.40 francs on Friday.
REUTERS
"The meeting will include the presentation of a restructuring concept involving part of its regional aircraft fleet. A number of options will be discussed here," Swiss said in a statement on Monday.
The airline asked the Swiss stock exchange to suspend trading in its stock until 1100 GMT on Tuesday "to prevent any uncertainty on the capital markets", it said. Swiss did not comment further.
On Sunday, a newspaper reported Swiss was set to announce renewed restructuring measures this week, including putting its regional operations -- part of the European business, where passenger numbers are dwindling -- into a separate company.
It could then sell part of the regional aircraft fleet and renegotiate wage contracts with staff.
As recently as December, Swiss' Chief Executive Christoph Franz had argued the two units were linked and that it made no sense to separate European and intercontinental business.
OLD IDEA
Any move to put the regional operations into a separate unit would mark Swiss's second attempt to launch a separate cut-price, no-frills regional airline, after initial plans for such a concept -- dubbed Swiss Express -- failed in 2003 in the face of strong opposition from pilots' unions.
"The idea is as old as Swiss. What has changed now to make it work?," said Zuercher Kantonalbank analyst Patrik Schwendimann, who has an "underweight" rating on the stock.
"It is well possible that (Swiss is) aiming for this solution and that it will be announced tomorrow but the question is whether it can be executed and whether it can be turned into a substantial advantage," he added.
Passenger loads have been falling on Swiss' core European routes, where on average it fills just over half of its available seats amid fierce competition from low-cost carriers such as EasyJet Plc .
Faced by tough competition, high oil prices and talk that Swiss may still be too large for its small home market, the airline has slashed jobs, its route network and fleet.
Swiss, born in a public-private bailout from the ashes of predecessor Swissair, which collapsed in late 2001, has said it needs to cut costs further if it is to become profitable.
"Fact is that something has to be done and that Franz has been around for a while. People are waiting for a solution," Schwendimann said.
Reports over the weekend also said that Lufthansa had been in contact with Swiss shareholders about a possible partnership but the German carrier insisted on Monday it was not in talks with Swiss or its key shareholders, which are led by the government and banks UBS and Credit Suisse.
Speculation had been running high last year that Swiss could turn towards its larger German neighbour after it failed to join the oneworld alliance led by British Airways.
Swiss expects to report an operating loss for 2004 but has forecast its first-ever annual profit this year.
Its volatile, closely held shares closed at 9.40 francs on Friday.
REUTERS
