SWISS Board of Directors disappointed at lack of progress in CLA negotiations with flying personnel

19 May 2005

The SWISS Board of Directors today reviewed the status of contract negotiations with cabin and cockpit personnel, which began back in January. It was ascertained that virtually no progress has been made in negotiations with Kapers, Unia or Swiss Pilots. Intensive negotiations are taking place with Aeropers but no binding results have yet been achieved.

The Board of Directors has expressed clearly its disappointment at the current status of the negotiations for a new Collective Labour Agreement. The airline can reach its goal of becoming a sustainably profitable company only if it has a cost structure that is in line with market conditions. To that end, SWISS must cut jobs in those areas of the company where overstaffing exists, increase productivity and implement a competitive salary structure. Without a substantial contribution from the unions, it will not be possible to complete the turnaround in the near future or experience future growth.

The Board of Directors urges the unions representing flying personnel to move away from their positions, some of which are being stubbornly adhered to, and to make a comprehensive contribution toward improving the company's cost structure. The Board regrets that Swiss Pilots has once again opted to seek legal arbitration rather than negotiate with the company. SWISS remains willing to find solutions at the bargaining table.

SWISS remains determined to find, together with its unions, sustainable and forward-looking solutions that safeguard jobs.

The Board of Directors acknowledged with satisfaction the conclusion of a new CLA with the unions representing ground staff, which became effective April 1, 2005.

Member of SWISS management and the Management Board are also making a contribution by foregoing 10% of their variable salary component and up to five days of vacation.