Bernd Bauer, Edelweiss CEO, tells Graham Newton that sustainability also means having a sharp social focus.

Are you positive about leisure travel given rises in the cost of living and lack of disposable income?

We are positive. It’s true that there is uncertainty in the market due to geopolitical unrest and economic turmoil and this does impact demand. But our pre-booking period is getting longer, which is a good sign of strong demand. And worldwide, COVID travel restrictions are basically gone—and certainly not affecting Swiss travel at all.

Also, Switzerland is not experiencing the same rises in the cost of living index that are being seen elsewhere in Europe and the world. Inflation here is just around 2.5% compared with double-digit inflation elsewhere. That’s a big difference. Moreover, the Swiss are frequent travelers. So, overall, we are not too worried.

The one concern I do have is the fuel price. If fuel costs rise further, then that will affect our airfares. But because of competition and the fact that many trips are discretionary, there is a limit to the amount we can charge.


You serve long-haul destinations as well as popular tourist spots so how do you approach the customer experience?

Edelweiss is in the premium leisure segment. But our product is driven by our collaboration with Swiss International Air Lines, especially from the Zurich hub. Swiss offer more than 100 destinations and Edelweiss have in excess of 80. Yet we only have one destination to which both of us fly—Palma de Mallorca. This is due to the above-average demand from Switzerland.

It means we share customers. Passengers that fly with Edelweiss also fly with Swiss. And that means we have to match the quality of the Swiss product. You can’t let it drop or both airlines would suffer.

But we have match that quality in a unique way because we are a leisure airline and that calls for a different kind of experience. Generally, our offer is less formal, there is more onboard interaction, the entertainment is more focused, and there is a different style to the cabin service. On short-haul flights within Europe, it isn’t really an issue, but on our long-haul flights maintaining quality while remembering we are a leisure brand is crucial to success.

Of course, we always have to be aware of our seat costs when considering what to include in our offer and the configuration of the aircraft is vital. Our Airbus A340s have 314 seats. Divided into Business Class with 27 lie-flat seats, Economy with 211 seats, and Economy Max with 76 seats. In Economy Max, we offer our passengers more legroom and recline angle and other amenities.

The end result is a quality product that is cost-effective from the airline point of view.


How does the relationship with Swiss and the Lufthansa Group work? Do you make independent decisions or is everything decided at Group level?

It is a mixture. Fleet decisions are taken at group level, for example. And Edelweiss benefits from that because bigger aircraft orders basically mean a better price.

But we decide where to fly the aircraft. After all, Edelweiss has to think of its profit and loss and so we need the flexibility to make the right decisions for us. Our planning team constantly monitors the market and proposes destinations and the right aircraft fit.

We do involve Swiss in these decisions, but the leisure market has a life of its own and we need to move swiftly.


Will contactless travel help the customer experience or is there are a danger that airlines are disengaging from the customer?

No, contactless travel will help. Our customers basically have the same needs as a business traveler. They want travel to be easy and enjoyable. And once customers have used contactless travel, they want that option available every time they fly—no matter the airline or where they are in the world.

And though it may be contactless for the passenger, as an airline we learn more about the customer than we ever knew before. That means we can offer a better service and improve the relationship.

All the technologies in this area are of interest to me. Biometrics is the way to go. It is safe and secure and makes travel easier for customers. Automation is another great tool that will help to improve the product.


Can aviation be carbon neutral by 2050?

It is a big challenge. The key is sustainable aviation fuels (SAF). Without SAF in large enough quantities, net zero will be hard to achieve. Governments should incentivize SAF production. At the group level, we are in a good position though, and we are working with suppliers to produce SAF and promote this innovation.

Hydrogen and electric are interesting developments, but these will take a long time to be useful to commercial aviation. All technologies should be supported of course but the focus must be on SAF. It works and the only issue these days is reduced availability.

But, as an industry, we must never forget to focus on our overall responsibility. We must minimise emissions through fuel management and better flying procedures. And there is a lot to do in other sectors, such as waste management and the use of plastic.

Sustainability is not just about the environment. Aviation’s social impact must also be considered. Again, at the group level, we are funding projects around the world, including supporting schools in South Africa and Sri Lanka and various initiatives in the Dominican Republic.

As a leisure airline, we generate a lot of revenue for less developed countries through tourism, but we try to make sure the benefits of aviation extend beyond those involved in serving tourists.


Do you think the regulatory environment in Europe is supportive of aviation?

The European Union (EU) must be careful with regulations. Too often, their regulations add to costs for everybody, including the customer.

Take passenger compensation, EU261. The aviation eco-system is complex. and one player cannot control all the parts. But airlines are held responsible, even for situations beyond our control, and we have to pay out compensation. We need a much better solution where the costs of delays and cancellations are properly allocated. Otherwise, airlines will need to start increasing prices.

And we still have a problem with air traffic management. The Single European Sky would be a big step forward, but we all know that it is far from being achieved.


What have you learned about being an airline CEO and is being a CEO in 2023 different from your first day in 2014?

In many ways, it is still the same. We must expect the unexpected. That has always been true and always will be.

But the pandemic has changed the way we work. We had never seen anything on that scale, and this forced us to be closer to our finances than we were before. Profit and loss were always important, of course, but the pandemic took this to a different level. You really have to drill down into your costs and revenues and make sure you have good cash flow. Everything is scrutinized.

The pandemic also highlighted the responsibility we have to staff. At Edelweiss, we kept all staff on board and did not make a single dismissal due to the pandemic.  We know how important our people are to our success.


Credit | Edelweiss