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Swissair

From Wikipedia, the free encyclopedia
Defunct national airline of Switzerland (1931–2002)
This article is about the defunct airline in Switzerland. For the current airline, seeSwiss International Air Lines. For the asteroid, see2138 Swissair.
Swissair
Schweizerische Luftverkehr-AG
S.A. Suisse pour la Navigation Aérienne
IATAICAOCall sign
SRSWRSWISSAIR
Founded26 March 1931 (1931-03-26)
Ceased operations31 March 2002 (2002-03-31)
(operations transferred toCrossair, which later becameSwiss International Air Lines)
Hubs
Frequent-flyer programQualiflyer
AllianceThe Qualiflyer Group
Subsidiaries
Parent company Swissair Group (SAirGroup)
HeadquartersKloten,Zürich,Switzerland
Key people

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

Swissair was formed from a merger betweenBalair andAd 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 Swissnational symbol and icon. It was headquartered atZurich 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 subsidiariesCrossair 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 ofSwissair 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 theSeptember 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 subsidiaryCrossair renamed itselfSwiss 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 airlineLufthansa in 2005.[4]

History

[edit]
SwissairFokker F.VIIb-3 m (CH-192) piloted byWalter Mittelholzer inKassala (Sudan), February 1934

Founding years

[edit]

On 26 March 1931, Swissair – Schweizerische LuftverkehrAG (English:Swissair – Swiss Air Transport) was founded through the fusion of the airlinesAd Astra Aero (founded in 1919) andBalair (1925). Balz Zimmermann and the Swiss aviation pioneerWalter 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 twoLockheed Orions, making them the second European airline to use American planes after the Czechoslovak operatorCSA 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 ledLufthansa to askHeinkel for a model that could top Orion's speed, leading to theHeinkel He 70. The first trans-Alpine route was introduced in 1933: Zürich-Milan.

For the first time in Europe, flight attendants were employed aboard theCurtiss 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 wasmaterial fatigue.

In 1936,Douglas DC-2s were acquired, and London was added to the route network. In 1937, the biggerDouglas DC-3 was bought. In the same year, both founding fathers died: Walter Mittelholzer died whilemountaineering inSteiermark, 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, andBarcelona. In 1940, an invasion of Switzerland was feared, and Swissair moved their operations to theMagadino Plains inTicino. Operations were suspended in August 1944, when a Swissair DC-2 was destroyed inStuttgart during an American bombing raid.

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

Ascension

[edit]
Swissair share, issued 17 April 1947
A Swiss Air Lines Convair 240 atManchester 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 toSFr20 million (equivalent toSFr95.61 million orUS$105.06 million in 2021)[6] enabled long-haul flights to New York, South Africa, and South America withDouglas DC-4s. The modernConvair 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 viaShannon, Ireland, andStephenville, Newfoundland, on 2 May 1947. However, it ended inWashington, D.C., due to fog at New York'sLaGuardia 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 twoDouglas DC-6B airliners for delivery in 1951. By that act, Swissair became Switzerland's nationalflag 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 ofBOAC'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 SwissWomen'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
YearTraffic
1950147
1955465
19601138
19652436
19715001
19757562
198010831
198512609
200034246
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 USPullman 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, atourist class cabin was introduced on intra-European flights.

In 1953, Swissair, with the city ofBasel, founded a charter company calledBalair, 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 theDouglas DC-7C which enabled the company to provide non-stop flights to the United States. For shorter-range routes, theConvair Metropolitan was used.

In 1957, theFar East was added to the route network. Direct flights toTokyo had intermediate stops inAthens,Karachi,Bombay,Bangkok andManila. That same year, Swissair helpedAristotle Onassis form the new Greek airline,Olympic Airways.

While competitors first looked atturboprop aeroplanes to replace their piston-engined craft, Swissair introduced jet aeroplanes. Together with SAS, Swissair boughtDouglas DC-8s, which were delivered beginning in 1960. For medium and short-range routes, theSud 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 theConvair 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 theDouglas DC-9. That aircraft became the backbone of the short and medium-range routes, and, after convincingDouglas, which soon merged withMcDonnell Aircraft to createMcDonnell Douglas, ultimately merged withBoeing, 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 firstBoeing 747-200 jumbo jet was acquired, and in the next year, the first McDonnell DouglasDC-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)
Swissair McDonnell Douglas DC-10 (1972)

In 1973, the company struggled with severe turbulence: a currency crisis, collective chaos, an air traffic controllers' strike, theOctober War and thefirst oil crisis were weathered without significant damage. In the same year, the regional representative of Swissair inBuenos Aires was kidnapped by theMontoneros. After 38 days in captivity, he was released after the payment of SFr12.35 million (equivalent to SFr29.69 million orUS$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 thePeople's Republic of China, introducing service toBeijing andShanghai 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 theAirbus A310 and the jumbo jet variant with a stretched upper deck, theBoeing 747-300. Later on, theFokker 100 short-range aircraft and the three-enginedMD-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 andCARIDO were examples of systems enabling the booking of passenger seats and freight space.[5]

"The flying bank"

[edit]
Sud Aviation Caravelle (1961)

After the 1960s, air traffic increased quickly and allowed many airlines—many of which werequasi-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 largehidden 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 namedCrossair, which put Swissair under additional stress. To counter these changes, Swissair invested their large financial reserves intotakeovers 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 USFederal Aviation Administration after the crash ofAmerican 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 theAirbus 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-tierexecutive class, the proven cabin division into first and economy classes was maintained. The short-haul fleet was renewed with theMD-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 nameSwissôtel, thehotels Président in Geneva,International in Zürich,Drake in New York, andBellevue Palace in Bern were administratively combined.

Concentration

[edit]
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 withDelta Air Lines andSingapore Airlines to create the alliance "Global Excellence". In 1990, together with SAS,Austrian Airlines andFinnair, the "European Quality Alliance" was founded. The last alliance was later renamed "TheQualiflyer Group".

Because of the weak economy, theGulf 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 theEuropean 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 alsofreedoms 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

[edit]
Logos of the firms belonging to the SAirGroup

In the late 1980s and early 1990s, Swissair tried to merge withAir France,Lufthansa, andBritish 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 firmMcKinsey & 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 unprofitableBelgian flag carrierSabena, and significant stakes in the carriersAir Liberté,AOM,Air Littoral,Volare,LOT,Turkish Airlines,South African Airways,Portugália andLTU, and planned to acquire stakes inAer Lingus,Finnair,Malév, as well as Brazilian carriersTAM andTransbrasil.[9] By mid-2000, it was predicted that Swissair would lose between SFr3.25 billion (equivalent to SFr3.51 billion orUS$3.86 billion in 2021)[6] and SFr4.45 billion (equivalent to SFr4.81 billion orUS$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 orUS$593.86 million in 2021)[6]. Also, there were plans to take overAlitalia.[10][8]

In October 1999,Delta Air Lines cancelled its transatlantic Atlantic Excellence alliance with Swissair andSabena, citing the desire to partner withAir 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 industryovercapacity.[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 onlyMario Corti, the formerCFO ofNestlé, remaining. From April to August 2001, the group'sMoody'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 majorcash flow crisis for parent company SAirGroup and was exacerbated by the environment caused by theSeptember 11 attacks. Unable to make payments to creditors on its large debt, and with the refusal ofUBS 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 chairmanMarcel Ospel as "Bin Ospel", quotingal-Qaeda leaderOsama bin Laden, and redefining the bank's acronym, "UBS", as theUnited Bandits of Switzerland.[16]

Two largebridge 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

[edit]

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 15:45CEST, 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 inBern's Federal Square.[citation needed]

At around the same time, SAirGroup's stake in Crossair was sold to the Swiss banksUBS andCredit 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 renamedSwiss 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

[edit]

An investigation by the Zurich branch ofErnst & 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 anescrow 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 airlineSwiss International Air Lines, stated in 2004 that this meant 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

[edit]

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 ofSwiss.[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 andA330s) and 26 medium-haul aircraft (A321s,A320s andA319s) were able to be transferred toCrossair/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 ofGategroup.

Factors behind collapse

[edit]

Like other airlines that flew to the United States, Swissair's operations andprofitability were disrupted in the wake of theterror attacks against the United States.[29] Several politicians were among those included on Swissair'sBoard of directors, and commentators have pointed to potentialconflicts of interest as fundamental to the demise of Swissair. Media have also suggested that the directorial board failed to oversee the actions ofPhilippe Bruggisser (Chief Operating Officer since 1996) andEric 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 whenMario Corti was trying to save the airline.[30]

Thejudiciary is continuing to examine why Swissair acquiredcounselling that supported the Hunter Strategy and why Swissair continued to make certain payments despite nearinginsolvency. Questions have also been raised about thefederal 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 counterpartSabena, Swissair fell victim to the rise of competition frombudget airlines on their short and medium-haul routes, such asRyanair andEasyJet.[31]

Imogen Foulkes from theBBC 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 airlineSabena and German airlineLTU were acquired despite significant capital requirements. Also, investments in France (AOM,Air Liberté, andAir 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 toCrossair 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 asRyanair andEasyJet 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, operatingflight 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

[edit]

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 ofOneworld.[36][37] It had codeshares with Oneworld carriersBritish Airways,American Airlines,Cathay Pacific,Qantas,Aer Lingus andFinnair, and held a strategic partnership and joint operation for all service to North America and AA-operated flights beyond U.S. gateways usingAmerican 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 byLufthansa, the national airline of Germany.[38][39][40][41] With the merger with Lufthansa, Swiss joined theStar Alliance in 2006, which Swissair planned to join before it failed. With this move, Swiss's frequent flyer club, Swiss TravelClub became part ofMiles & 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

[edit]

A criminal trial began on 16 January 2007 inBülach. 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 wereMario Corti,Philippe Bruggisser, George Schorderet, Jacqualyn Fouse, Eric Honegger, andVerena Spoerry. Corti, Honegger, and Spoerry entered statements proclaiming their innocence.[43]

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

Continued use of the "Swissair" brand

[edit]

Swiss retains the rights to the "Swissair" name, whose value was estimated at more than 10 million Swiss francs in 2010. To prevent thetrademark from becoming void through disuse, Swiss licensed it to Hopscotch Air, which operates a fleet ofCirrus 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

[edit]

Last active fleet

[edit]

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

AircraftIn serviceOrdersPassengersNotes
FCYTotal
Airbus A319-10051892110Launch operator.
Airbus A320-2002418156174
Airbus A321-100818202220
Airbus A330-200161242142196Regular configuration.
48182230High-density configuration.
Airbus A340-6009TBAAfter Swissair's collapse, orders were later cancelled. Were to replace the MD-11s.
McDonnell Douglas MD-1120847164219Low-density configuration. It was never implemented after Swissair's bankruptcy.
1249180241Regular configuration.
Total739

Historic fleet

[edit]

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

Aircraft which Swissair has operated
AircraftTotalDeliveredRetiredNotes
Airbus A310-200519831995Launch operator. Two aircraft were sold toAir Liberté.
Three aircraft were sold toFedEx Express after being converted into freighters.[citation needed]
Airbus A310-300619852000
Airbus A319-100919962002Most aircraft were transferred toSwiss International Air Lines.[citation needed]
Airbus A320-2002019952002Most aircraft were transferred toSwiss International Air Lines.[citation needed]
Airbus A321-1001219952002Most aircraft were transferred toSwiss International Air Lines.[citation needed]
Airbus A330-2001619982002Most aircraft were transferred toSwiss International Air Lines.[citation needed]
Airbus A340-6009CancelledAfter Swissair went bankrupt, SWISS cancelled the orders and ordered theAirbus A340-300.
Six of Swissair's previously orderedAirbus A340-600s were purchased bySouth African Airways in 2002.
The remaining three were purchased byIberia in the same year.[48]
BAC One-Eleven319681969Leased to increase capacity.[citation needed]
Boeing 747-200B219711984
Boeing 747-300219832000Launch customer.
Sold toSouth African Airways.[citation needed]
Boeing 747-300M319831999Largest operator of its type along withKLM andSingapore Airlines. Includes one leased aircraft.[citation needed]
Boeing 747-357419831999Launch Customer.[citation needed]
Clark G.A. 43219341936First all-metal aeroplane in Swissair fleet.[citation needed]
Comte AC-4119311947Acquired from Ad Astra.
Now in the SR Technics Hangar in Zürich.[citation needed]
Convair CV-240819491957Most aircraft were sold.
Some scrapped, and one crashed.[citation needed]
Convair CV-440 Metropolitan1219561968Most aircraft were sold.
First Swissair plane to use integrated Weather Radar.[citation needed]
Convair CV-880-22M219611962Leased pending delivery of Convair 990s.[citation needed]
Convair CV-990 Coronado819621975Most were sold, one crashed, and one is at theSwiss Transport Museum in Lucerne.[citation needed]
Curtiss AT-32C Condor119341934First European airliner to have astewardess.
It crashed in 1934.[citation needed]
de Havilland Dragon Rapide319371954
de Havilland Mosquito119451945Originally used as aRoyal Air Force fighter aircraft inWorld War II, fell into Swiss hands.
Swiss government used it and sold it to Swissair in 1944.[citation needed]
Douglas DC-2619341952Assembled under licence byFokker atSchiphol Airport nearAmsterdam.[citation needed]
Douglas DC-31619371969The first 5 were assembled pre-war byFokker atSchiphol Airport nearAmsterdam.
The others were converted USAF C-47's and postwar built aircraft.[citation needed]
Douglas DC-4519461959Used on service toNew York-JFK route.
Three aircraft were written off.[citation needed]
Douglas DC-6819511962
Douglas DC-7C519561962All aircraft were sold.
The Swissair Fleet included the final DC-7 ever built.[citation needed]
Douglas DC-8-32319601967One was converted to a -53 and two were converted to -33's.[citation needed]
Douglas DC-8-53219631976One was converted from a -33.
One washijacked and blown-up after passengers were released.[citation needed]
Douglas DC-8-62719671984Two were operated as a freighter -62Fs.[citation needed]
McDonnell Douglas DC-9-15519661968Sent back toDouglas or sold.[citation needed]
McDonnell Douglas DC-9-322219671988One was operated as a freighter -33F.[citation needed]
Dornier Merkur219311931Acquired from Ad Astra.[citation needed]
Mraz M-65 Cap119481950Built under licence by Fieseler Storch.
Later sold toLindt & Sprüngli.[citation needed]
Fokker VII a119311950Acquired fromBalair.
Now on display in theSwiss Transport Museum in Lucerne.[citation needed]
Fokker VII b819311935Acquired fromAd Astra andBalair.[citation needed]
Fokker F27319651972Operated for Swissair byBalair.[citation needed]
Fokker 100619881996
Junkers Ju-86 B-0219361939
Lockheed Model 9 Orion219321936Both were sold to the Republicans in theSpanish Civil War.
(The example at theSwiss 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).[citation needed]
McDonnell Douglas DC-10-301219721992Launch operator along with KLM.
Most were sold toNorthwest Airlines.[citation needed]
McDonnell Douglas DC-10-30ER219801992
McDonnell Douglas DC-9-41419741975Leased fromScandinavian Airlines.[citation needed]
McDonnell Douglas DC-9-511219751988
McDonnell Douglas MD-112219912002One crashed asFlight 111.
The remaining aircraft were transferred toSwiss International Air Lines.[citation needed]
McDonnell Douglas MD-812519801998Launch customer of MD-80.
Most aircraft were sold toScandinavian Airlines,Trans World Airlines.[citation needed]
McDonnell Douglas MD-82319821996
McDonnell Douglas MD-83219951996
Messerschmitt M 18119311938Taken over from Ad Astra.[citation needed]
Nord 1000119481953Sold to Federal Air Office.[citation needed]
Scottish Aviation Twin Pioneer119571957Used for high-altitude airports.[citation needed]
Sud Aviation SE210 Caravelle919601971Swissair's first jet airliner.
First ones leased fromScandinavian Airlines.
Most were sold, and one is still active.[citation needed]

Destinations

[edit]

The following destinations Swissair served:

Asia

[edit]

Africa

[edit]

Europe

[edit]

Americas

[edit]

Swissair Asia

[edit]
Main article:Swissair Asia

Due toTaiwan's relations with China,Swissair Asia was formed to serveTaipei,Taiwan, also known as theRepublic of China, while Swissair maintained service to thePeople's Republic of China.[51]

Corporate affairs

[edit]

Swissair's head office was on the grounds ofZurich Airport and inKloten.[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 theDübendorf Aerodrome in Zürich.[54]

Accidents and incidents

[edit]

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

Flight
number
DateRegistration numberModelFatalitiesDetails
N/A27 July 1934CH-170Curtiss AT-32C Condor II12Crashed 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/A7 January 1939HB-ITADouglas DC-25Crashed after striking a hill.
N/A20 July 1939HB-IXAJunkers Ju 866Crashed following an engine fire.
N/A19 June 1954HB-IRWConvair CV-2403Crashed due tofuel starvation in theEnglish Channel, nearFolkestone. 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 carrylife rafts orlife jackets, and this was one of the many incidents which led to such a requirement becoming law.
N/A15 July 1956HB-IMDConvair CV-4404The aircraft crashed during a delivery flight fromSan Diego, California toZürich viaNew York City,Gander andShannon. On approach to Shannon, the pilots executed an abnormally steep turn, causing the aircraft tostall and drop to the ground.
N/A18 June 1957HB-IRKDouglas DC-39Crashed during an exercise conducted undervisual flight rules. The exercise aimed to practice flying with one engine switched off and propellersfeathered.
3064 September 1963HB-ICVCaravelle80The pilot taxied along therunway 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 ofHumlikon: 43 of the just 200 residents died on that flight.
N/A10 February 1967HB-IMFConvair CV-4404Collided with a cloud-covered mountain during a training flight.
33021 February 1970HB-ICDConvair CV-99047A bomb on board the flight from Zürich toTel 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.
1006 September 1970HB-IDDDouglas DC-80Swissair Flight 100, from Zürich to New York, washijacked by a man and a woman and diverted toDawson's Field inJordan. The 145 passengers, along with 260 others from two other hijacked aircraft, were held hostage by thePFLP. The three empty aircraft were subsequently blown up on September 12.
3168 October 1979HB-IDEDouglas DC-814Landed under "adverse conditions" atAthens 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 andreverse thrust.
1112 September 1998HB-IWFMcDonnell Douglas MD-11229Flying from New York'sJFK International Airport toGeneva, theMD-11 crashed in the Atlantic due to an onboard cockpit fire caused byarcing and subsequent instrument failure at night off the coast ofPeggy's Cove, 30  km southwest ofHalifax, Nova Scotia. This became the second-deadliestaviation accident in Canadian history, just afterArrow Air Flight 1285R.

In popular culture

[edit]

References

[edit]
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  2. ^"About Swissair Facts and Figures". Swissair. 1999. Archived fromthe original on 1999-02-19. Retrieved2008-08-30.
  3. ^Hermann, A., & Rammal, H. G. (2010). The grounding of the "flying bank".Management Decision, 48(7), 1048–62.
  4. ^"Lufthansa – proposed acquisition of Swiss International Air Lines – Australian Competition Commission".accc.gov.au. Archived fromthe original on 2011-06-22.
  5. ^abcdThis section was translated from the article "Swissair" in the German-language Wikipedia, version[2]
  6. ^abcde1501 to 1813: Roman Studer, Pascal Schuppli,Deflating Swiss Prices over the Past Five Centuries, Historical Methods, Summer 2008, Volume 41, Number 3. Afterwards, Switzerland inflation numbers based on FSO-EN to 2015, FSO-DE 2015-2021"CPI, Global index on all index bases". Federal Statistical Office. RetrievedMay 14, 2021. and table 18-10-0004-13"LIK, Totalindex auf allen Indexbasen".Federal Statistical Office. RetrievedMay 14, 2021.
  7. ^Lüchinger, René (3 November 2021)."Secret negotiations in Argentina freed Swissair executive in 1973".Neue Zürcher Zeitung. Retrieved1 November 2023.
  8. ^abcdeHamilton, Stewart; Micklethwait, Alicia (2006). "Swissair: Crashed and Burned".Greed and corporate failure: the lessons from recent disasters. Basingstoke [England] ; New York: Palgrave Macmillan.ISBN 978-1-4039-8636-8.OCLC 64390595.
  9. ^"Swissair gets purchase approval".Airline Industry Information. 17 April 2000. Retrieved30 August 2012.
  10. ^Hollingdale, Michael (19 September 2000)."Alitalia reportedly in alliance talks with Swissair".swissinfo. Retrieved29 June 2023.
  11. ^"Swissair, Delta, Sabena, Austrian end trans-Atlantic alliance".swissinfo. 1999-10-13. Retrieved2024-07-07.
  12. ^swissinfo.ch, S. W. I. (2000-07-06)."Swissair considers future after Katz blow".SWI swissinfo.ch. Retrieved2024-02-22.
  13. ^abOlson, Elizabeth (24 January 2001)."Chief Steps Down at Parent of Swissair".The New York Times. Retrieved17 August 2017.
  14. ^"Swissair Group | Reports | Moody's".www.moodys.com. Retrieved2024-03-24.
  15. ^Staff writers (2001-10-02)."Swissair grounds all flights".BBC News. Retrieved2007-08-02.
  16. ^Richter, Patrick (13 October 2001)."The collapse of Swissair".World Socialist Web Site. Retrieved29 June 2023.
  17. ^BUSINESS | State warned against buying Swissair. BBC News (2001-10-05). Retrieved on 2013-08-20.
  18. ^"Swissair jets grounded as cash runs out".CNN. 2 October 2001.
  19. ^Milner, Mark; Harper, Keith; Clark, Andrew (2001-10-03)."Financial crisis grounds Swissair fleet".The Guardian.ISSN 0261-3077. Retrieved2024-04-20.
  20. ^ab"Crossair to fly the flag as Swissair gives up the struggle".swissinfo.ch.Swiss Broadcasting Corporation. 2001-10-02. Retrieved2024-04-20.
  21. ^abRESULTS OF ERNST & YOUNG'S INVESTIGATION REGARDING SWISSAIR: Appendix 1 to the press release(PDF). Zürich: Ernst & Young. January 25, 2003. p. 4.{{cite book}}: CS1 maint: date and year (link)
  22. ^ab"André Dosé: Mario Corti, die Banken und das Grounding".Handelszeitung (in Swiss High German). Retrieved2024-06-25.
  23. ^"20 Jahre nach dem Grounding - Ex-Swiss-Chef Dosé: «Das Grounding wäre gar nie nötig gewesen»".Schweizer Radio und Fernsehen (SRF) (in German). 2021-10-02. Retrieved2024-06-26.
  24. ^swissinfo.ch, S. W. I. (2003-01-24)."Swissair grounding could have been avoided".SWI swissinfo.ch. Retrieved2024-06-26.
  25. ^"Swissair to Resume Flights With Government Funds".Los Angeles Times. 2001-10-04. Retrieved2024-04-20.
  26. ^Cappelli, Peter."How Swissair Landed in Trouble".Knowledge at Wharton.University of Pennsylvania. Retrieved2024-04-20.
  27. ^"State rescues Swissair".BBC. 2001-10-03. Retrieved2024-04-20.
  28. ^"New threat to Swissair".BBC. 2001-10-29. Retrieved2024-04-20.
  29. ^Staff writers (3 October 2001)."Thousands stranded in airline crisis".BBC News. Retrieved2009-03-19.
  30. ^Olson, Elizabeth (4 July 2001)."Brussels sues Swissair in move to aid Sabena".The New York Times. Retrieved27 September 2012.
  31. ^Hall, Dave; Jones, Rob; Raffo, Carlo (2004).Business Studies (Third ed.). Ormskirk: Causeway Press. p. 196.ISBN 1-902796-83-7.
  32. ^abFoulkes, Imogen (2007-03-08)."Swiss shame over airline disgrace lingers".From Our Own Correspondent.BBC. Retrieved2024-04-03.
  33. ^"Debt-ridden Swissair to split with Crossair taking on flights".The Irish Times. 2001-10-02.
  34. ^"Planet Airlines - Swiss".planetairlines.net.
  35. ^"Fleet - Crossair".
  36. ^"Swiss joins Oneworld alliance".swissinfo.ch.Swiss Broadcasting Corporation. 2003-09-23. Retrieved2024-04-20.
  37. ^Tran, Mark (2003-09-23)."BA rescue deal keeps Swiss carrier flying".The Guardian.ISSN 0261-3077. Retrieved2024-04-20.
  38. ^"Lufthansa takes over Swiss".swissinfo. 2005-03-22. Retrieved2024-04-20.
  39. ^"Swissair collapse still reverberates".swissinfo. 30 September 2011.
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  41. ^"Lufthansa wins EU approval for takeover".NBC News.NBC. 2005-07-05. Retrieved2024-04-20.
  42. ^"Swissair trial opens with 19 executives charged - Business - International Herald Tribune".The New York Times. 16 January 2007.
  43. ^Harry Rosenbaum (15 January 2007)."Swissair executives assert innocence at the first day of Switzerland's biggest corporate trial".International Herald Tribune. Retrieved2007-02-22.
  44. ^Staff writers (2007-06-07)."All Swissair defendants cleared".BBC News. Retrieved2007-08-02.
  45. ^"Business lead".Flightglobal. 19 October 2010. Retrieved1 November 2010.
  46. ^Keller, Senta (1 November 2010)."Swissair hebt wieder ab".Berner Zeitung. Retrieved1 November 2010.
  47. ^Patrick Eberhard (2008)."The whole Swissair fleet".Swissair.aero. Retrieved2008-09-02.
  48. ^Árbol, Antonio Ruiz del (2002-06-28)."Iberia incorpora a su flota tres unidades del mayor avión de Airbus".Cinco Días (in Spanish). Retrieved2024-04-03.
  49. ^ab"Swissair to start Shanghai services on November 4". Swissair. 1995-10-30. Archived fromthe original on 1997-01-25. Retrieved2018-01-08.
  50. ^"Africa Route Network." Swissair Fan Site. N.p., n.d. Web.
  51. ^"World Airline Directory."Flight International. 28 March-3 April 2000.[3]-[4].
  52. ^"facts & figures." Swissair. Retrieved on 13 June 2009. "Swissair AG, P.O. Box, CH-8058 Zurich Airport"
  53. ^ab"Headquarters of Swissair Zuerich-Kloten." KSG, Architects G.Müller + G.Berger. Retrieved on 27 September 2011.The building is located hereArchived July 29, 2014, at theWayback Machine
  54. ^Flight International. April 28, 1938. p.416 (Archive). "SOCIETE ANONYME SUISSE POUR LA NAVIGATION AERIENNE (Swissair), Dübendorf Aerodrome, Zürich."
  55. ^Harro Ranter (31 August 2008)."ASN Aviation Safety Database". The Aviation Safety Network. Retrieved2008-09-02.
  56. ^"Little Mammoth".
  57. ^Patrick Smith (March 1, 2013).""Argo" and the 747".Askthepilot.com.Archived from the original on September 7, 2015. RetrievedAugust 17, 2015.
  58. ^"Aviation Photo #0139560: McDonnell Douglas DC-8-62 - Swissair".Airliners.net.Archived from the original on January 2, 2022. Retrieved2022-01-02.

Bibliography

[edit]
  • 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.

External links

[edit]

Media related toSwissair at Wikimedia Commons

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