Swissair

» see swissair.com as it lived, on the wayback machine

~ the obit ~

Ad Astra Aero and Balair merged on 26 March 1931 to make a national carrier for a country with no coastline and no empire. Balz Zimmermann handled the business and Walter Mittelholzer, who had flown open-cockpit survey aircraft over Africa and Persia, handled the flying. The airline never got a state monopoly the way most European flag carriers did, and it spent seventy years behaving like a company that knew it.

By the early 1970s the nickname was the Flying Bank. The reference was to the balance sheet rather than to the aircraft. It held hidden reserves that were large even by Swiss standards, and it carried more liquidity than an airline has any operational reason to carry. Swiss institutional investors held it the way they held anything else conservative. That reputation was the asset, and it was the thing that took the longest to spend.

On 6 December 1992 Switzerland voted against joining the European Economic Area. The margin was under a percentage point and the consequence for one company was immediate and structural. The European single aviation market was about to open, and Swissair would be outside it, unable to fly between two points in the EU and unable to be bought into by an EU carrier on equal terms. Every strategic decision the airline made after that date was an attempt to get inside a market its own voters had declined to enter.

Flight 111 went into the sea off Peggys Cove, Nova Scotia, on 2 September 1998. The MD-11 had an in-flight fire above the cockpit ceiling, traced afterward to arcing in the wiring of the in-flight entertainment system, and all 229 people aboard were killed. It was the worst thing that ever happened to the airline and it was not what killed it.

~ the rap sheet ~

~ the hunter strategy ~

The plan came out of work with McKinsey in the mid-1990s and it had a certain logic. If Swissair could not join the single market, it would buy its way into the carriers already inside it. So the money went into minority stakes: Sabena in Belgium, AOM and Air Liberté and Air Littoral in France, LOT in Poland, LTU in Germany, Volare in Italy, South African Airways further out. The stakes were large enough to bring consolidation losses onto the Swiss books and small enough to leave the airlines themselves under other people's management. Most of them were losing money before Swissair arrived and kept losing it afterward.

Around the stakes sat Qualiflyer, founded in April 1992 as the frequent-flyer program and later stretched into an alliance to compete with Star and oneworld. Turkish Airlines was in the frequent-flyer side of it without being a member of the group proper, which is how a Zurich loyalty scheme ended up printed on Turkish boarding passes for a few years in the late nineties. THY renamed its program Miles&Smiles in 2000 and was out before the collapse, then spent the rest of the decade waiting for Star Alliance, which it joined on 1 April 2008. The airlines that stayed inside Qualiflyer did not all get that option.

~ the afternoon of 2 october ~

By the autumn of 2001 SAirGroup was carrying debt it could not service and had just watched transatlantic demand fall off a cliff after 11 September. The banks would not extend further. At 15:45 CEST on 2 October, chief executive Mario Corti announced that flight operations were suspended, because suppliers at the outstations were demanding payment in cash for fuel and there was no cash to give them.

What followed was an airline's fleet stopping wherever it happened to be. Aircraft sat at foreign gates with passengers already boarded. Thousands of people were stranded across the network with tickets on a carrier that had ceased to exist between one rotation and the next, and the images went around the world within hours, which for a company whose entire brand was Swiss reliability was a particular kind of ending.

The federal government put up a loan within days to restart a reduced schedule, and an Ernst & Young report afterward found that roughly CHF 123 million had in fact been available on the day. Whether the grounding was necessary at all is still argued in Switzerland. What is not argued is that it was the largest corporate failure in Swiss history, and that the liquidation of SAirGroup was not signed off until 2024, twenty-two years after the last flight.

~ what flew on ~

Crossair, the regional carrier Swissair had built up and then been rescued by, took the routes and the aircraft and renamed itself Swiss International Air Lines on 1 April 2002. It lasted three years as an independent airline before Lufthansa bought it in 2005, which is precisely the outcome the Hunter Strategy had spent a decade and several billion francs trying to avoid.

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