Lufthansa Group subsidiary Swiss International Air Lines (SWISS) posted a record operating profit of CHF636 million ($645.9 million) for 2018, up 16% from CHF548 million in the previous year.

The carrier’s total annual revenue rose 7.1% to CHF5.3 billion, compared to CHF4.9 billion in 2017. The revenue gains were boosted by traffic growth and the introduction of more fuel-efficient aircraft into the fleet, the airline said.

SWISS carried 17.9 million passengers in 2018, a 6.2% year-over-year (YOY) increase and a record for the carrier. Traffic, measured in RPKs, was up 5.4% YOY as capacity increased 4.1%, resulting in load factor rising 1 point to 83.4%.

The airline added two Boeing 777-300ERs and 13 Bombardier CSeries aircraft (now the Airbus A220) to its fleet in 2018. The investment in new, more efficient aircraft is paying off, CFO Michael Niggemann said at a press conference in Zurich.

“For example, our Boeing 777s need 20% less fuel compared to the Airbus A340-300, but offer more seats,” he said.

“The largest cost driver for SWISS has been fuel price,” he added.

Two more 777s are scheduled to be delivered by the end of the year and will be used primarily on transatlantic and Asian services. Possible new long-haul destinations for SWISS include Seoul, Washington Dulles and Toronto.

SWISS also said it will introduce a premium economy class on the long-haul fleet from spring 2021. Initially, the new class will be available on the 777-300ER in a 24-seat, 2-4-2 configuration, and will eventually be extended across the entire long-haul fleet.

“Now is the right time for SWISS for premium economy class, because it works well on Austrian Airlines and Lufthansa,” CEO Thomas Klühr said.

Despite the record financial and passenger performance last year, Klühr said 2019 will be challenging. Fuel prices are increasing, and the airline also hopes to see more stabilization in European flight operations.

“We had to cancel 1,000 flights last summer, mainly caused by [air traffic control] delays,” Klühr said.

Kurt Hofmann, hofmann.aviation@netway.at