Wikipedia

Swissair

(Redirected from SAirGroup)
This article is about the defunct airline in Switzerland. For the current airline, see Swiss International Air Lines. For the asteroid, see 2138 Swissair.

Swissair (German: Schweizerische Luftverkehr-AG; French: S.A. Suisse pour la Navigation Aérienne)[1] was the national airline of Switzerland between its founding in 1931 and bankruptcy in 2002.

Swissair
Schweizerische Luftverkehr-AG
S.A. Suisse pour la Navigation Aérienne
IATA ICAO Call sign
SR SWR SWISSAIR
Founded26 March 1931 (1931-03-26)
Ceased operations31 March 2002 (2002-03-31)
(operations transferred to Crossair, which later became Swiss International Air Lines)
Hubs
Frequent-flyer programQualiflyer
AllianceThe Qualiflyer Group
Subsidiaries
Parent company Swissair Group (SAirGroup)
HeadquartersKloten, Zürich, Switzerland
Key people

Swissair was formed from a merger between Balair and Ad Astra Aero.[2] For most of its 71 years, it was one of the major international airlines and known as the "Flying Bank" due to its financial stability, causing it to be regarded as a Swiss national symbol and icon[citation needed]. It was headquartered at Zurich Airport, Kloten.

In 1997, the Swissair Group was renamed SAirGroup (although it was again renamed Swissair Group in 2001), with four subdivisions: SAirLines (to which Swissair, regional subsidiaries Crossair and Balair, and leasing subsidiary FlightLease belonged), SAirServices, SAirLogistics, and SAirRelations.

Due to its so-called "Hunter Strategy" of expanding its market by acquiring smaller airlines, Swissair was suffering from over-expansion by the late 1990s. The crash of Swissair Flight 111 in 1998, which killed all 229 people on board, generated a costly lawsuit and negative publicity for the airline. After the economic downturn following the September 11 attacks, Swissair's assets dramatically lost value, grounding the already-troubled airline in October 2001.[3] The airline was later revived and kept alive until 31 March 2002 by the Swiss Federal Government. The final Swissair flight landed in Zürich from São Paulo on 1 April 2002.

On 1 April 2002, a former regional subsidiary Crossair renamed itself Swiss International Air Lines and took over most of Swissair's routes, planes, and staff. Swissair Group still exists and has since been liquidated.[clarification needed] Swiss International Air Lines was taken over by the German airline Lufthansa in 2005.[4]

History

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Swissair Fokker F.VIIb-3 m (CH-192) piloted by Walter Mittelholzer in Kassala (Sudan), February 1934.

Founding years

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On 26 March 1931, Swissair – Schweizerische Luftverkehr AG (English: Swissair – Swiss Air Transport) was founded through the fusion of the airlines Ad Astra Aero (founded in 1919) and Balair (1925). Balz Zimmermann and the Swiss aviation pioneer Walter Mittelholzer were the founding fathers. In contrast to other airlines, it did not receive support from the government. The name "Swissair" was the proposal of Dr Alphonse Ehinger, president of the directorial board of Balair, although "Swissair" was first deemed "un-Swiss". In the first operational year, 64 people were employed, including ten pilots, seven radio operators, and eight mechanics. Their planes offered 85 seats, and operation was maintained only from March to October. The route network had a length of 4,203 kilometres (2,612 mi).

 
The first Swissair logo

On 17 April 1932, Swissair bought two Lockheed Orions, making them the second European airline to use American planes after the Czechoslovak operator CSA purchased a Ford Trimotor in 1930. The Orion was the fastest commercial aeroplane of its time and was put to use on the "Express Line", Zürich-Munich-Vienna. This led Lufthansa to ask Heinkel for a model that could top Orion's speed, leading to the Heinkel He 70. The first trans-Alpine route was introduced in 1933: Zürich-Milan.

For the first time in Europe, flight attendants were employed aboard the Curtiss Condor beginning in 1934. Nelly Diener, the first flight attendant in Europe, became world-famous. She was killed after just 79 flights in a crash near Wurmlingen, Germany, on 27 July 1934. The cause of the crash was material fatigue.

In 1936, Douglas DC-2s were acquired, and London was added to the route network. In 1937, the bigger Douglas DC-3 was bought. In the same year, both founding fathers died: Walter Mittelholzer died while mountaineering in Steiermark, Austria, and Balz Zimmermann succumbed to an infectious disease.

 
A Swissair DC-2. They would become a very loyal customer of Douglas, buying most of their commercial aircraft models.

On 27 August 1939, days before World War II broke out, the airspace over Germany and France was closed. Swissair was forced to suspend service to Amsterdam, Paris, and London. Two days later, the Swissair service was closed completely. Of 180 employees, 131 had to serve in the army. Despite the war, some routes were later re-introduced, such as Munich, Berlin, Rome, and Barcelona. In 1940, an invasion of Switzerland was feared, and Swissair moved their operations to the Magadino Plains in Ticino. Operations were suspended in August 1944, when a Swissair DC-2 was destroyed in Stuttgart during an American bombing raid.

On 30 July 1945, Swissair was able to resume commercial aviation.[5]

Ascension

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Swissair share, issued 17 April 1947
 
A Swiss Air Lines Convair 240 at Manchester Airport, England, in March 1950.
 
A Swissair Douglas DC-3 in the 1950s.
 
A Douglas DC-6B at Manchester Airport in 1954.

In 1947, the rise of shareholder capital to SFr20 million (equivalent to SFr95.61 million or US$105.06 million in 2021)[6] enabled long-haul flights to New York, South Africa, and South America with Douglas DC-4s. The modern Convair 240, the first Swissair plane with a pressurised cabin, was used for short and medium-range flights starting in late 1948. The first Swissair DC-4 flight to New York was routed via Shannon, Ireland, and Stephenville, Newfoundland, on 2 May 1947. However, it ended in Washington, D.C., due to fog at New York's LaGuardia Airport. The total elapsed time was 20 hours and 55 minutes.

 
The former Swissair logo

The public, including the federal government, cantons, municipalities, the Swiss Federal Railways, and the Swiss postal services, took over 30.6% of the shares and enabled Swissair to get a credit of 15  million Swiss Francs to purchase the airline's first two Douglas DC-6B airliners for delivery in 1951. By that act, Swissair became Switzerland's national flag carrier. The new pressurised aircraft was to replace the DC-4 on transatlantic routes.

In 1948, the airport in Dübendorf, which had served as the base of Swissair, was relocated to Zürich-Kloten. Military aviation continued in Dübendorf. The next year, Swissair plunged into a financial crisis due to a sudden devaluation of the British pound because fares, except for traffic to the United States, were calculated in British currency. At that time, traffic to England made up 40 per cent of Swissair's revenue.

In June 1950, Walter Berchtold, manager of Swiss Federal Railways, was elected to the directorial board of Swissair and served as the director. In 1971, he created the corporate culture of Swissair. He grasped the importance of corporate image and corporate identity and after the example of BOAC's "Speedbird", he introduced the arrow-shaped Swissair logo. Giving flight personnel a distinct uniform was also an important move. At the time, flight attendants' uniforms resembled the grey-blue ones of the Swiss Women's Army Corps, so Berchtold introduced ones in a modish marine blue. Swissair initiated a veritable fashion competition among European airlines.

Revenue Passenger-Kilometers, scheduled flights only, in millions
Year Traffic
1950 147
1955 465
1960 1138
1965 2436
1971 5001
1975 7562
1980 10831
1985 12609
2000 34246
Source: ICAO Digest of Statistics for 1950–55, IATA World Air Transport Statistics 1960–2000
 
Douglas DC-7C (1957)

In 1952, the cabin layout on northern trans-Atlantic routes was changed to one with a first and a tourist (economy) class. The first-class cabin had comfortable chairs in which one could sleep, given the name "Slumberettes". Those sleeping chairs were soon succeeded by beds, modelled after the US Pullman railway cars. Two adjacent seats were moved towards each other and formed a lower berth. The wall panel could be folded downward, forming the upper berth in which the other person could sleep. A year later, a tourist class cabin was introduced on intra-European flights.

In 1953, Swissair, with the city of Basel, founded a charter company called Balair, reusing the name of one of its predecessors, a company that initially used older Swissair aircraft to fly to holiday destinations.

As the first European customer, Swissair bought the Douglas DC-7C which enabled the company to provide non-stop flights to the United States. For shorter-range routes, the Convair Metropolitan was used.

In 1957, the Far East was added to the route network. Direct flights to Tokyo had intermediate stops in Athens, Karachi, Bombay, Bangkok and Manila. That same year, Swissair helped Aristotle Onassis form the new Greek airline, Olympic Airways.

While competitors first looked at turboprop aeroplanes to replace their piston-engined craft, Swissair introduced jet aeroplanes. Together with SAS, Swissair bought Douglas DC-8s, which were delivered beginning in 1960. For medium and short-range routes, the Sud Aviation Caravelle was purchased. The aircraft were maintained in concert with SAS, and manuals for operation and maintenance were co-written.

 
Douglas DC-8-62 of Swissair at Zurich Airport in 1979. The DC-8 series served the airline from 1960.
 
Swissair Convair Coronado 990A (1962–1975)

Swissair was one of the few companies to order the Convair 990 Coronado for its medium and long-range routes. Although the aircraft did not initially fulfil contractual specifications, they were liked by employees and customers. They operated on the airline's routes to South America, West Africa, and the Middle and Far East.

1966 saw the introduction of the Douglas DC-9. That aircraft became the backbone of the short and medium-range routes, and, after convincing Douglas, which soon merged with McDonnell Aircraft to create McDonnell Douglas, ultimately merged with Boeing, offered a stretched variant: the DC-9-32. For the first time, Swissair was the launch customer of an aircraft type.

In 1971, Armin Baltensweiler took over as president of the directorial board and ran the enterprise for over two decades. In the same year, the first Boeing 747-200 jumbo jet was acquired, and in the next year, the first McDonnell Douglas DC-10-30 followed. Both types shaped the long-haul fleet until the 1990s. Again, the specifications of both aircraft were developed in collaboration with SAS. Also in 1972, Switzerland introduced a prohibition of night flights, which led to the cessation of cheaper night fares.

 
Swissair Boeing 747-200B (1971)
 
A Swissair McDonnell Douglas DC-10 in 1972.

In 1973, the company struggled with severe turbulence: a currency crisis, collective chaos, an air traffic controllers' strike, the October War and the first oil crisis were weathered without significant damage. In the same year, the regional representative of Swissair in Buenos Aires was kidnapped by the Montoneros. After 38 days in captivity, he was released after the payment of SFr12.35 million (equivalent to SFr29.69 million or US$32.63 million in 2021)[6] ransom.[7] The airline also phased out the CV-990s during that time.

Swissair was the second European airline to offer service to the People's Republic of China, introducing service to Beijing and Shanghai in 1975. In the same year, Swissair was the launch customer for the DC-9-51. In 1977, Swissair was the launch customer for the third DC-9 type, the DC-9-81 variant, now called the MD-80. Armin Baltensweiler had travelled to a meeting of the McDonnell-Douglas directorial board in St. Louis to convince them to further stretch the fuselage of the DC-9-51. Baltensweiler was called the "Father of the MD-80". In 1979, Swissair was the first company to order the Airbus A310 and the jumbo jet variant with a stretched upper deck, the Boeing 747-300. Later on, the Fokker 100 short-range aircraft and the three-engined MD-11 were aircraft for which Swissair was the launch customer. 1983 saw the replacement of the older DC-9s with MD-83s.

Since the 1960s, Swissair has been a world leader in the development of cargo reservation systems (CRS). PARS and CARIDO were examples of systems enabling the booking of passenger seats and freight space.[5]

"The flying bank"

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Sud Aviation Caravelle (1961)

After the 1960s, air traffic increased quickly and allowed many airlines—many of which were quasi-monopolists on their routes—to yield high revenues. Swissair profited from its well-established reputation as a quality airline and from the fact that the political neutrality of Switzerland allowed the company to fly to exotic and lucrative destinations in Africa, the Middle East, South America and the Far East. In geographic terms, the central position of Switzerland in Europe helped it generate revenue from transfer passengers. By the early 1970s, Swissair was becoming known as "the flying bank", appealing to the large hidden assets and the huge liquidity Swissair had. Second, "flying bank" was the designation for a corporate group that cared more about financial management than about flying aeroplanes.[5]

With the beginning of deregulation and liberalisation in the late 1970s, airlines felt growing financial pressure. In 1978, Moritz Suter founded a regional airline named Crossair, which put Swissair under additional stress. To counter these changes, Swissair invested their large financial reserves into takeovers and into flight-related trades like baggage handling, catering, aircraft maintenance, and duty-free stores. This strategy diversified economic risks at the expense of the core business of Swissair: commercial aviation.

Due to a 12-day global flight ban for the DC-10 imposed by the US Federal Aviation Administration after the crash of American Airlines Flight 191 on 25 May 1979, a sizable portion of the long-haul fleet was on the ground. On October 7, after landing in Athens, a DC-8 overran the runway and caught fire, killing 14 passengers. By the end of that year, kerosene prices had doubled, and fuel costs had increased from 12% to 16% of total costs. Swissair was the first to order the Airbus A310 designed with a two-man cockpit for more traffic-tight short distances and on shorter medium distances, and accepted options for 10 more units. Another Boeing 747 was ordered. Dublin was added to the route network as a new destination, but service to Beirut had to be discontinued in mid-July due to the political turmoil in Lebanon.

Swissair was able to outperform the competition in a year that experts deemed to be the worst in the history of civil aviation. In contrast to other airlines, which began to offer a second-tier executive class, the proven cabin division into first and economy classes was maintained. The short-haul fleet was renewed with the MD-81 (DC-9-81) introduction. This type of aircraft partially replaced the older and smaller DC-9. In addition, modern, fuel-saving aircraft, such as five new Boeing 747s with extended upper decks and two DC-10-30s with a longer range, were ordered. With the connection of Zurich Airport to the national railway network, bus delivery services from Zürich were discontinued. Air passengers were already able to check their luggage at the rail station. The route network was expanded with service to Jakarta, but flights to Tehran and Baghdad had to be suspended after the outbreak of the Iran-Iraq war. By the end of 1980, Swissair was represented in 196 cities. New representations or points of sale were opened in Luxembourg, Ulm, Ottawa, Raleigh, Westchester, Valparaíso, Jubil, Sanaa, and Salisbury/Harare. Under the name Swissôtel, the hotels Président in Geneva, International in Zürich, Drake in New York, and Bellevue Palace in Bern were administratively combined.

Concentration

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Boeing 747-300 (1985)
 
Airbus A310-200 (1983)
 
Airbus A321-100 (2001)
 
McDonnell Douglas MD-11 (2000)

Regarding further liberalisation of Europe's airline market, Swissair focused more on commercial aviation and extended its partnerships. As the first European airline to do so, Swissair signed in 1989 a cooperation treaty with Delta Air Lines and Singapore Airlines to create the alliance "Global Excellence". In 1990, together with SAS, Austrian Airlines and Finnair, the "European Quality Alliance" was founded. The last alliance was later renamed "The Qualiflyer Group".

Because of the weak economy, the Gulf War and its aftermath, and rising operational costs, many airlines lost money in 1990 and 1991. Additionally, the ongoing liberalisation of the industry strengthened competition. Consequently, Swissair lost 99 million Swiss Francs in the first half-year and could not pay dividends to its shareholders. In 1991 and 1992, Swissair had to utilise financial reserves to cushion significant losses from the commercial aviation sector.

On 1 January 1991, commercial aviation in Europe was completely liberalised, and existing capacities led to aggressive competition among airlines. In a national referendum held on 6 December 1992, Swiss citizens rejected taking part in the European Economic Area (EEA). This referendum was a significant disservice to Swissair, an airline with a tiny domestic market: its planes were not allowed to take up passengers during intermediate landings in EEA countries (e.g., Zürich-Frankfurt-New York), and Swissair was not allowed to offer tickets for sections that fully lie in EEA member countries (e.g., Zürich-Frankfurt-Paris).[8]

See also freedoms of the air.

Like other airlines based in smaller countries, Swissair was now under significant pressure. More and more national airlines have affiliated themselves with airline alliances to maintain a worldwide market presence. But to be interesting for American alliance partners, an airline must have a critical size in terms of passenger numbers. To meet that goal, in 1993, an alliance between Swissair, KLM, SAS, and Austrian Airlines was proposed. This project bore the name "Alcazar" to create a single Central European airline. However, in various countries, this project was criticised. In Switzerland itself, it was thought that the huge financial assets were too precious to sacrifice to merge Swissair with the other airlines.[5][8]

Hunter Strategy

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Logos of the firms belonging to the SAirGroup

In the late 1980s and early 1990s, Swissair tried to merge with Air France, Lufthansa, and British Airways to get access to a wider European market. Finally, after deregulation, Swissair tried to expand beyond its home market; after the Alcazar project was cancelled, Swissair aimed to be a major force in European aviation.

In the mid-1990s, Swissair initiated the disastrous "Hunter Strategy", a major expansion programme devised by the US consulting firm McKinsey & Co. Using this strategy, Swissair aimed to grow its market share by acquiring small airlines rather than entering into alliance agreements. Swissair decided to acquire 49.5 per cent of the very successful Italian charter airline Air Europe, the unprofitable Belgian flag carrier Sabena, and significant stakes in the carriers Air Liberté, AOM, Air Littoral, Volare, LOT, Turkish Airlines, South African Airways, Portugália and LTU, and planned to acquire stakes in Aer Lingus, Finnair, Malév, as well as Brazilian carriers TAM and Transbrasil.[9] By mid-2000, it was predicted that Swissair would lose between SFr3.25 billion (equivalent to SFr3.51 billion or US$3.86 billion in 2021)[6] and SFr4.45 billion (equivalent to SFr4.81 billion or US$5.29 billion in 2021)[6] over the next three fiscal years. The management, however, maintained classical restructuring,[clarification needed] and the Board approved the reorganisation of LTU for approximately SFr500 million (equivalent to SFr540.41 million or US$593.86 million in 2021)[6]. Also, there were plans to take over Alitalia.[10][8]

In October 1999, Delta Air Lines cancelled its transatlantic Atlantic Excellence alliance with Swissair and Sabena, citing the desire to partner with Air France instead. [11]

During the European airline deregulation transition, Jeffrey Katz served as CEO of Swissair from 1997 to 2000, a period of increased fuel prices and industry overcapacity.[12]

In the summer of 2000, SAir's CEO Philippe Bruggisser came under public pressure as the press published the group's financial situation. Swissair and Sabena were each losing one million francs per day, and another million were lost every day at LTU and the French investments. For the first time, the board began to consider scenarios for phasing out its existing participation in other airlines as Swissair looked to withdraw from its foreign investments.[13] In January 2001, Bruggisser was summarily dismissed. Moritz Suter, the founder of Crossair, was nominated as the new CEO of SAirLines and thus all Group airlines, including Swissair. After only 44 days in charge, Suter resigned.[13][8]

In March 2001, two studies by consultants were presented to the board, which showed the financial difficulties of SAirGroup. At this point, the directors resigned, with only Mario Corti, the former CFO of Nestlé, remaining. From April to August 2001, the group's Moody's credit rating was gradually downgraded from A3 to B1 (it was downgraded further to B2 on September 18th).[14] The buying spree created a major cash flow crisis for parent company SAirGroup and was exacerbated by the environment caused by the September 11 attacks. Unable to make payments to creditors on its large debt, and with the refusal of UBS to extend its line of credit, on 2 October 2001 the entire Swissair fleet was abruptly grounded.[15][8] Many blamed UBS for the fiasco, causing demonstrators to take to the streets with signs referring to UBS chairman Marcel Ospel as "Bin Ospel", quoting al-Qaeda leader Osama bin Laden, and redefining the bank's acronym, "UBS", as the United Bandits of Switzerland.[16]

Two large bridge loans from the Swiss government were required to finance the continuation of flight operations. This notwithstanding, with the resumption of flight service, it was necessary for flight crews to carry large sums of cash to purchase fuel at foreign airports.[17]

Grounding

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On 1 October 2001, Project "Phoenix" was announced, under which parts of the group sought a payment delay. The Swiss federal authorities were willing to pay back half of the loan, so they secured the continuation of service.

2 October 2001 saw an increased necessity for strong liquidity, as all suppliers insisted on cash payments of outstanding invoices following a request for payment delay announced the day before. The company's cash reserves filed on that day were barely sufficient to carry out the first morning flights. During the morning, fuel suppliers refused to fuel the waiting aircraft. At 15:45 CEST, CEO Mario Corti announced a cessation of flight operations due to the security risks caused by the crossing of the Flight Duty Regulations.[18][clarification needed] This led to the cancellation of over 230 flights, and thousands of passengers, as well as flight crews, were stranded around the world. Flight crew corporate credit cards were blocked by the banks, with some hotels expelling the crew, and having them return home at their own expense. All tickets sold were voided.[19][20]

4 October 2001 saw demonstrations by former Swissair employees before the UBS presentation held in Glattbrugg, and the following day saw demonstrations in Bern's Federal Square.[citation needed]

At around the same time, SAirGroup's stake in Crossair was sold to the Swiss banks UBS and Credit Suisse. Furthermore, Crossair took over various assets of former Swissair, including its employees, aircraft, and most European routes. Swissair and the SAirGroup were handed over to the liquidation firm of Jürg Hoss and ceased operations on 31 March 2002. Crossair was renamed Swiss International Air Lines, or Swiss for short, and took over Swissair's intercontinental routes on 1 April 2002, officially ending 71 years of Swissair service.

Controversy surrounding Corti's decision to ground flights

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An investigation by the Zurich branch of Ernst & Young into factors behind the grounding revealed that "... in contradiction to representations made by SAir Group, not just 14.5 million Swiss Francs, but around CHF50 million were available at the company’s disposal on the morning of October 2, 2001".[21] The report further stated that "Without the administrative inadequacies connected with the release of an escrow account, an additional CHF 73 million would have been available. Thus, overall some CHF 123 million would have been available at SAirGroup, SAirLines and Swissair." [21] Former Crossair executive André Dosé, who also served as the first CEO of successor airline Swiss International Air Lines, stated in 2004 that this means the grounding was not necessary and that Swissair could have likely continued flying until the financing for a successor airline would have been finalized,[22] a view he reiterated in a 2021 interview. [23] In his 2004 statement, Dose voiced the view that Corti and then-CFO Jacqualyn Fouse had lost oversight of Swissair's finances, accounting for this mismatch in perception of available funds. [22]

Mario Corti vehemently rejected the notion that Swissair and SAirGroup bank accounts together held more than 14 million Swiss Francs in a public statement after the Ernst & Young report came out. [24]

Transition phase

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On 5 October, commercial flights on most routes were gradually resumed thanks to a federal emergency loan of over CHF 450 million.[25][26][27] This occurred, in part, to ensure Switzerland's continued accessibility as a business location and to establish a basis for the creation of Swiss.[20] By preventing the complete collapse of Swissair, the other airline-related businesses of the group were likewise spared collapse.[28]

 
The Swiss International Air Lines logo as of 2011.

Following another federal repayable funding commitment of one billion francs, each of the 26 long-haul aircraft (MD-11s and A330s) and 26 medium-haul aircraft (A321s, A320s and A319s) were able to be transferred to Crossair / Swiss at the end of the winter schedule of 2001/02. On Easter Monday, 1 April 2002, the last flight of Swissair, flight SR145 from São Paulo, landed in Zürich. A 71-year-long chapter of Swiss aviation history thus came to an end. Between 1931 and 2002, Swissair transported more than 260 million passengers. The SwissairGroup (the name change from SAirGroup to SwissairGroup was announced in 2001 but never officially implemented) still existed as 'SAirGroup in Nachlassstundung' (German: Swissair in Administration) for several years until all assets were liquidated, including a large auction where many of the remaining Swissair assets, such as historic items, were auctioned. Today, Gategourmet continues as a subsidiary of Gategroup.

Factors behind collapse

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Like other airlines that flew to the United States, Swissair's operations and profitability were disrupted in the wake of the terror attacks against the United States.[29] Several politicians were among those included on Swissair's Board of directors, and commentators have pointed to potential conflicts of interest as fundamental to the demise of Swissair. Media have also suggested that the directorial board failed to oversee the actions of Philippe Bruggisser (Chief Operating Officer since 1996) and Eric Honegger (board member since 1993 and later board president) and that they left behind a convoluted corporate structure and financial commitments—amongst others, a further purchase of 35.5 per cent of Sabena's stock—which would only come to light when Mario Corti was trying to save the airline.[30]

The judiciary is continuing to examine why Swissair acquired counselling that supported the Hunter Strategy and why Swissair continued to make certain payments despite nearing insolvency. Questions have also been raised about the federal aid given to Swissair and the politicians involved. The highly competitive nature of the market during the business's final years also precipitated its demise: like its Belgian counterpart Sabena, Swissair fell victim to the rise of competition from budget airlines on their short and medium-haul routes, such as Ryanair and EasyJet.[31]

Imogen Foulkes from the BBC said regarding the collapse: "Something did die in Switzerland that day: not just an airline but an image the Swiss had of themselves and, more importantly, of their business leaders"[32] and "The Swiss financial community's reputation for good business sense was already seriously damaged by the Swissair disaster."[32]

Because civil cases are still going on, some of the reasons why SAirGroup failed are still being looked into by the courts and have not been made clear legally. The following causes are widely recognised as crucial factors:

  • The management underestimated the dangers and difficulties in the acquisitions and investments of partially ailing airlines. Therefore, the Belgian airline Sabena and German airline LTU were acquired despite significant capital requirements. Also, investments in France (AOM, Air Liberté, and Air Littoral) required much capital restructuring. Sabena ultimately ceased operations due to the aforementioned financial crisis.
  • The indebtedness created by an uncompromising adaptation to the realities of "Hunter strategy" implementation and the lack of monitoring by the Board.
  • The 2001 terrorist attacks in the US led to a sharp slump in demand and, consequently to an extreme tightening of liquidity.
  • An orderly transfer of operations to Crossair was denied because of the failure to reach a bridging loan and the delayed transfer of the share purchase price.
  • Increasing competition from low-cost carriers such as Ryanair and EasyJet in the short-to-medium-haul markets from Europe caused Swissair to lose passenger revenues.
  • A full merger with Sabena was impossible due to Swissair's financial crisis.
  • An MD-11, operating flight 111, crashed in 1998, killing everyone on board. This event led to further troubles for the airline with negative publicity, a significant lawsuit, more financial problems and lowered customer confidence.

Legacy

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In April 2002, Swiss International Air Lines commenced operations. First called Swiss Air Lines, this company was based on the former Crossair and was a merger of Crossair and former Swissair employees, routes, aircraft, and intellectual property.[33] The company Swissair continued to exist (in liquidation) but had no further assets. Due to legal problems with Swissair, the name had to be changed to Swiss International Air Lines.

Swiss took over 26 long-haul and 26 medium-haul aircraft from the defunct Swissair fleet[34] and refurbished the liveries and interiors to turn it into the new Swiss fleet, together with the former Crossair Fleet consisting of the Embraer 145, Saab 2000, MD-80 Series, and Avro RJ.[35] The remainder of the Swissair aircraft that were grounded and were not taken by the new company were returned to their lessors.

After problems with the former Crossair pilot unions, who refused to accept different conditions than the former Swissair pilots within the same airline, a subsidiary called Swiss European Air Lines was founded, which belongs 100% to Swiss International Air Lines.

In 2003, it appeared that Swiss was going to become a member of Oneworld.[36][37] It had codeshares with Oneworld carriers British Airways, American Airlines, Cathay Pacific, Qantas, Aer Lingus and Finnair, and held a strategic partnership and joint operation for all service to North America and AA-operated flights beyond U.S. gateways using American Airlines. Swiss started to terminate these codeshare agreements but did not terminate the AA alliance. A theory emerged that Swiss was planning to use its partnerships, the AA alliance, and its partnership with British Airways, a strong and supportive member of Oneworld, to join Oneworld itself.

However, in 2005, Swiss was taken over by Lufthansa, the national airline of Germany.[38][39][40][41] With the merger with Lufthansa, Swiss joined the Star Alliance in 2006, which Swissair planned to join before it failed. With this move, Swiss's frequent flyer club, Swiss TravelClub became part of Miles & More, which was originally the Lufthansa Group frequent flyer club. It acts as both airlines' frequent flyer programme, along with many other Lufthansa Group airlines.

Management trial

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A criminal trial began on 16 January 2007 in Bülach. The entire former Swissair management board stood facing criminal charges of mismanagement, false statements, and forgery of documents.[42] The top defendants in the trial were Mario Corti, Philippe Bruggisser, George Schorderet, Jacqualyn Fouse, Eric Honegger, and Verena Spoerry. Corti, Honegger, and Spoerry entered statements proclaiming their innocence.[43]

On 7 June 2007, the court in Bülach cleared the defendants of all criminal charges over the airline's 2001 bankruptcy.[44]

Continued use of the "Swissair" brand

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Swiss retains the rights to the "Swissair" name, whose value was estimated at more than 10 million Swiss francs in 2010. To prevent the trademark from becoming void through disuse, Swiss licensed it to Hopscotch Air, which operates a fleet of Cirrus SR22 planes in the United States, for use from 2010 to 2013. In Switzerland, the trademark is protected through its use by an aviation sports club, Sportfluggruppe Swissair.[45][46]

Fleet

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Last active fleet

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At the time of its demise, the Swissair fleet consisted of the following aircraft:[citation needed]

Aircraft In service Orders Passengers Notes
F C Y Total
Airbus A319-100 5 — — 18 92 110 Launch operator
Airbus A320-200 24 — — 18 156 174
Airbus A321-100 8 — — 18 202 220
Airbus A330-200 16 — 12 42 142 196 Regular configuration
— 48 182 230 High-density configuration
Airbus A340-600 — 9 TBA After Swissair's collapse, orders were later cancelled. Were to replace the MD-11s.
McDonnell Douglas MD-11 20 — 8 47 164 219 Low-density configuration. It was never implemented after Swissair's bankruptcy.
12 49 180 241 Regular configuration
Total 73 9

Historic fleet

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In its 71 years of existence, Swissair operated the following aircraft:[47]

Aircraft which Swissair has operated
Aircraft Total Delivered Retired Notes
Airbus A310-200 5 1983 1995 Launch operator. Two aircraft were sold to Air Liberté.
Three aircraft were sold to FedEx Express after being converted into freighters.
Airbus A310-300 6 1985 2000
Airbus A319-100 9 1996 2002 Most aircraft were transferred to Swiss International Air Lines.
Airbus A320-200 20 1995 2002 Most aircraft were transferred to Swiss International Air Lines.
Airbus A321-100 12 1995 2002 Most aircraft were transferred to Swiss International Air Lines.
Airbus A330-200 16 1998 2002 Most aircraft were transferred to Swiss International Air Lines.
Airbus A340-600 9 Cancelled After Swissair went bankrupt, SWISS cancelled the orders and ordered the Airbus A340-300.
Six of Swissair's previously ordered Airbus A340-600s were purchased by South African Airways in 2002.
The remaining three were purchased by Iberia in the same year.[48]
BAC One-Eleven 3 1968 1969 Leased to increase capacity.
Boeing 747-200B 2 1971 1984
Boeing 747-300 2 1983 2000 Launch customer.
Sold to South African Airways.
Boeing 747-300M 3 1983 1999 Largest operator of its type along with KLM and Singapore Airlines. Includes one leased Aircraft
Clark G.A. 43 2 1934 1936 First all-metal aeroplane in Swissair fleet
Comte AC-4 1 1931 1947 Acquired from Ad Astra.
Now in the SR Technics Hangar in Zürich
Convair CV-240 8 1949 1957 Most aircraft were sold.
Some scrapped, and one crashed
Convair CV-440 Metropolitan 12 1956 1968 Most aircraft were sold.
First Swissair plane to use integrated Weather Radar
Convair CV-880-22M 2 1961 1962 Leased pending delivery of Convair 990s
Convair CV-990 Coronado 8 1962 1975 Most were sold, one crashed, and one is at the Swiss Transport Museum in Lucerne
Curtiss AT-32C Condor 1 1934 1934 First European airliner to have a stewardess
It crashed in 1934
de Havilland Dragon Rapide 3 1937 1954
de Havilland Mosquito 1 1945 1945 Originally used as a Royal Air Force fighter aircraft in World War II, fell into Swiss hands.
Swiss government used it and sold it to Swissair in 1944
Douglas DC-2 6 1934 1952 Assembled under licence by Fokker at Schiphol Airport near Amsterdam
Douglas DC-3 16 1937 1969 The first 5 were assembled pre-war by Fokker at Schiphol Airport near Amsterdam.
The others were converted USAF C-47's and postwar built aircraft
Douglas DC-4 5 1946 1959 Used on service to New York-JFK route.
Three aircraft were written off.
Douglas DC-6 8 1951 1962
Douglas DC-7C 5 1956 1962 All aircraft were sold.
The Swissair Fleet included the final DC-7 ever built.
Douglas DC-8-32 3 1960 1967 One was converted to a -53 and two were converted to -33's.
Douglas DC-8-53 2 1963 1976 One was converted from a -33.
One was hijacked and blown-up after passengers were released
Douglas DC-8-62 7 1967 1984 Two were operated as a freighter -62Fs.
Douglas DC-9-15 5 1966 1968 Sent back to Douglas or sold
Douglas DC-9-32 22 1967 1988 One was operated as a freighter -33F.
Dornier Merkur 2 1931 1931 Acquired from Ad Astra
Mraz M-65 Cap 1 1948 1950 Built under licence by Fieseler Storch.
Later sold to Lindt & Sprüngli
Fokker VII a 1 1931 1950 Acquired from Balair.
Now on display in the Swiss Transport Museum in Lucerne
Fokker VII b 8 1931 1935 Acquired from Ad Astra and Balair
Fokker F27 3 1965 1972 Operated for Swissair by Balair
Fokker 100 6 1988 1996
Junkers Ju-86 B-0 2 1936 1939
Lockheed Model 9 Orion 2 1932 1936 Both were sold to the Republicans in the Spanish Civil War.
(The example at the Swiss Transport Museum never served in the Swissair fleet, but was instead bought in the 1960s by Swissair, restored to flying status, and painted in Swissair colours).
McDonnell Douglas DC-10-30 12 1972 1992 Launch operator along with KLM.
Most were sold to Northwest Airlines.
McDonnell Douglas DC-10-30ER 2 1980 1992
McDonnell Douglas DC-9-41 4 1974 1975 Leased from Scandinavian Airlines.
McDonnell Douglas DC-9-51 12 1975 1988
McDonnell Douglas MD-11 22 1991 2002 One crashed as Flight 111.
The remaining aircraft were transferred to Swiss International Air Lines.
McDonnell Douglas MD-81 25 1980 1998 Launch customer of MD-80.
Most aircraft were sold to Scandinavian Airlines, Trans World Airlines.
McDonnell Douglas MD-82 3 1982 1996
McDonnell Douglas MD-83 2 1995 1996
Messerschmitt M 18 1 1931 1938 Taken over from Ad Astra
Nord 1000 1 1948 1953 Sold to Federal Air Office
Scottish Aviation Twin Pioneer 1 1957 1957 Used for high-altitude airports
Sud Aviation SE210 Caravelle 9 1960 1971 Swissair's first Jet airliner.
First ones leased from Scandinavian Airlines.
Most were sold, and one is still active.

Destinations

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The following destinations Swissair served:

Asia

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Africa

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Europe

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Americas

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Swissair Asia

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Main article: Swissair Asia

Due to Taiwan's relations with China, Swissair Asia was formed to serve Taipei, Taiwan, also known as the Republic of China, while Swissair maintained service to the People's Republic of China.[51]

Corporate affairs

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Swissair's head office was on the grounds of Zurich Airport and in Kloten.[52][53]

KSG, Architects G.Müller + G.Berger designed the final head office complex for the airline. It was in proximity to the main airport facilities and area freeways. The first phase of the building included offices for 1,600 workers, computer rooms, printing rooms, and 500-seat restaurant facilities. The second phase included an open-plan office room, another computer laboratory, and expansions of the restaurant facilities.[53]

In the 1930s, the head office was in the Dübendorf Aerodrome in Zürich.[54]

Accidents and incidents

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Over the 71-year history of Swissair, there were eleven major incidents reported resulting in 414 fatalities.[55]

Flight
number 		Date Registration number Model Fatalities Details
N/A 27 July 1934 CH-170 Curtiss AT-32C Condor II 12 Crashed due to wing failure in severe turbulence. Oscillations in the wing caused a stress fracture, made worse by the storm the aircraft was flying through. However, German investigators determined that two fractures formed: one in the wing and engine mount due to defective construction and improper welding, and the second resulted from turbulence in the storm.
N/A 7 January 1939 HB-ITA Douglas DC-2 5 Crashed after striking a hill.
N/A 20 July 1939 HB-IXA Junkers Ju 86 6 Crashed following an engine fire.
N/A 19 June 1954 HB-IRW Convair CV-240 3 Crashed due to fuel starvation in the English Channel, near Folkestone. All three crew members survived, but three of the five passengers drowned as they were unable to swim. Passenger aircraft at this time were not obliged to carry life rafts or life jackets, and this was one of the many incidents which led to such a requirement becoming law.
N/A 15 July 1956 HB-IMD Convair CV-440 4 The aircraft crashed during a delivery flight from San Diego, California to Zürich via New York City, Gander and Shannon. On approach to Shannon, the pilots executed an abnormally steep turn, causing the aircraft to stall and drop to the ground.
N/A 18 June 1957 HB-IRK Douglas DC-3 9 Crashed during an exercise conducted under visual flight rules. The exercise aimed to practice flying with one engine switched off and propellers feathered.
306 4 September 1963 HB-ICV Caravelle 80 The pilot taxied along the runway at a high engine setting to clear the fog. This caused the brakes to overheat, which then started a fire that damaged hydraulic lines and led to a loss of control. The accident had a significant impact on the small town of Humlikon: 43 of the just 200 residents died on that flight.
N/A 10 February 1967 HB-IMF Convair CV-440 4 Collided with a cloud-covered mountain during a training flight.
330 21 February 1970 HB-ICD Convair CV-990 47 A bomb on board the flight from Zürich to Tel Aviv, detonated in the aft cargo compartment of the aircraft about nine minutes after take-off climb-out. The aircraft crashed due to a subsequent electrical fire that crippled the aircraft before the pilots could attempt an emergency landing at Zürich.
100 6 September 1970 HB-IDD Douglas DC-8 0 Swissair Flight 100, from Zürich to New York, was hijacked by a man and a woman and diverted to Dawson's Field in Jordan. The 145 passengers, along with 260 others from two other hijacked aircraft, were held hostage by the PFLP. The three empty aircraft were subsequently blown up on September 12.
316 8 October 1979 HB-IDE Douglas DC-8 14 Landed under "adverse conditions" at Athens Ellinikon International Airport, overshooting the runway and killing fourteen passengers. The plane touched down at too great a speed and too far along the runway for the pilots to use sufficient braking and reverse thrust.
111 2 September 1998 HB-IWF McDonnell Douglas MD-11 229 Flying from New York's JFK International Airport to Geneva, the MD-11 crashed in the Atlantic due to an onboard cockpit fire caused by arcing and subsequent instrument failure at night off the coast of Peggy's Cove, 30  km southwest of Halifax, Nova Scotia. This became the second-deadliest aviation accident in Canadian history, just after Arrow Air Flight 1285R.
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References

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Bibliography

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  • Benedikt Meyer: Im Flug. Schweizer Airlines und ihre Passagiere, 1919–2002. Chronos, Zürich 2014, ISBN 978-3-0340-1238-6.
  • Cooksley, Peter (September–October 1996). "Celestial Coaches: Dornier's Record Breaking Komet and Merkur". Air Enthusiast (65): 20–24. ISSN 0143-5450.
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  Media related to Swissair at Wikimedia Commons

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