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Swiss Int'l Air posts $725m loss
ZURICH, Switzerland (Reuters) -- Swiss International Air Lines fell to a larger-than-expected 2002 loss and declined to give an outlook for 2003, but its thinly-traded shares jumped on Friday as some investors applauded its comfortable capital position. Swiss said it had a net loss of 980 million Swiss francs ($725 million) in its first year of operations, or 658 million excluding one-offs such as start-up costs and write-offs on its fleet. The flag-carrier, hurt by the slump in global travel as it struggles to avoid the fate of its bankrupt predecessor Swissair, gave no outlook for 2003. But the airline noted it had acted last month to reduce its fleet of aircraft and modify its route network amid the global economic downturn and "the radical crisis afflicting the world airline industry." Swiss last month cut its fleet by 20 aircraft and slashed 700 jobs, abandoning its goal of breaking even this year. Despite the grim news, Swiss shares -- around 90 percent of which are held by the government and large Swiss companies -- jumped by a quarter on Friday as some investors zoomed in on the carrier's better-than-feared capital situation. Having lost around 80 percent so far this year, Swiss shares were 22.5 percent higher at 4.90 francs at 1109 GMT. Swiss said shareholder equity stood at 1.7 billion francs at year-end and that it had liquid funds of 1.26 billion francs. "Some people may have been surprised by those capital figures," said Zuercher Kantonalbank analyst Patrik Schwendimann. But despite the relatively comfortable capital position, "the air is quickly getting thinner because of the continued high losses and the financing of new aircraft," added Schwendimann, who reiterated his "sell" rating on the stock. Swiss has ordered a total of around 60 Embraer jets but now wants to delay delivery of the smaller-sized aircraft. Analyst Matthias Egger at Pictet & Cie, who cut his price target on Swiss to four francs from six, said the break-even for the carrier was still far away. "We do not expect the recently announced measures will bring Swiss back to profit. More drastic actions will have to be taken," he said. Swiss had a 2002 operating loss of 909 million on revenue of 4.28 billion. Swiss, created by grafting two-thirds of the Swissair fleet onto Europe's largest regional carrier Crossair with the help of a 2.7 billion franc injection by the government and a host of local companies, is due to detail its results on March 25. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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