Tuesday October 2, 5:42 pm Eastern Time

CHRONOLOGY-Swissair grounds fleet, looks for cash

ZURICH, Oct 2 (Reuters) - Collapsed Swissair was forced to ground its 77-jet fleet Tuesday and said there would be no resumption Wednesday amid a shortage of cash for essentials such as fuel bills and airports landing fees.


Sep 02   Swissair Flight 111 (Md-11 code-shared service NY to Geneva) crashes off Halifax (suspicion centres on faulty wiring and a jury-rigged Inflight Entertainments System add-on that was plumbed directly into a cockpit main electrical buss - with no OFF switch.).

The following is a chronology of the main events since April last year:


April 26 - Swissair's holding company, SAirGroup, agrees to raise stake in Belgium's Sabena [SAB.UL] to 85 percent from 49.5 percent to cement a partnership formed in 1995. Belgium to have 15 percent stake in SAirGroup.

July 6 - SAirGroup denies ``vehemently'' it has financial difficulties and says it expects a ``balanced'' first half.

Aug 22 - SAirGroup reports first-half net profit of three million francs and forecasts a profit for the full year.


Jan 23 - SAirGroup drops foreign airline policy of seeking foreign airlines for acquisition. Chairman Eric Honegger replaces CEO Philippe Bruggisser.

March 15 - SAirGroup board appoints Mario Corti, chief financial officer at food group Nestle , as chairman and chief executive. Other board members resign in two stages.

April 2 - SAirGroup posts 2000 loss of 2.88 billion francs. Announces restructuring, plans to sell hotels and property.

April 23 - Swissotel unit sold to Singapore's Raffles.

April 25 - Shareholders vote for special audit into the cause of the record 2000 loss. Three banks set one-billion-franc credit line with strings. Company name now Swissair Group.

June 5 - Swissair initiates ``Change 2001'' programme to save another 500 million francs a year in costs, sees staff cuts.

June 15 - Ailing French airline Air Liberte/AOM, in which Swissair has a minority stake, files for bankruptcy.

June 30 - Marc Dufour acquires ailing Air Littoral from Swissair and another French shareholder.

July 12 - Swissair says it plans to raise an additional three billion francs through asset sales over 18 months and announces closer cooperation with Crossair .

July 17 - Swissair and the Belgian government agree on refinancing loss-making Sabena, releasing Swissair from pledge to raise its stake to 85 percent from 49.5 percent, by paying 60 percent of 430 million euros in four instalments, first due in October.

July 27 - French court allows Swissair to withdraw from its minority stake in AOM/Air Liberte.

Aug 30 - Swissair reports first-half net loss of 234 million francs after taking a 251 million francs provision for German charter subsidiary LTU ; shareholders' equity down at a mere 555 million. Announces will sell its Swissport ground handling services and the Nuance Group airport retailers; plans to cut capacity by eight percent which would lead to 1,000 job cuts. Another 250 managers to go.

Sept 20 - Swissair says it considers additional costs cuts after the attacks in the United States, which led to the grounding or diversion of planes and caused 65 million Swiss francs in lost revenues.

Sept 23 - Government announces creation of public/private working group, including Swissair, banks, politicians, and Swiss firms to draw up a recapitalisation plan for the Swissair group.

Sept 24 - Swissair to merge the Swissair airline with Crossair, names Crossair's Andre Dose head of new Swiss Air Lines. Catering unit Gate Gourmet cuts 3,000 jobs in aftermath of attacks on U.S. landmarks in New York and Washington.

Sept 30 - Swissair says the aftermath of Sept. 11 attacks in United States will cause ``single-digit'' billions of francs in follow-up costs in 2001 and 2002.

Oct 1 - Swissair hands over most flight operations to low-cost carrier Crossair , already part of the group, under a 1.36 billion Swiss franc bank financing deal by UBS and Credit Suisse . It seeks court protection from creditors for other businesses, cutting around a third of staff and a quarter of long-haul flights. Trade in Swissair and Crossair shares halted at least until Wednesday.

Oct 2 - Swissair receives 258.8 million francs for the sale of its 70.4 percent stake in Crossair to the banks at the end of a day in which a lack of ready funds grounds its fleet; says will assess on October 3 when flights will resume; Corti and the government attack UBS over feet-dragging;

* Unions now fear up to 10,000 job cuts, plan protests;

* Belgium frantically looks at ways to save Sabena after Swissair says it has no cash for the affiliate;

* LTU starts search for new partner to replace Swissair; and

* Poland says it would look for another partner for LOT [LOT.UL] if Swissair pulled out.


Swissair halts flights
Hance Colburne - Global News
© Copyright 2001 Global News


Press analyses Swissair failure

Newspapers bid farewell to Swissair

Swissair’s demise dominated the headlines of the country’s main newspapers on Tuesday. Most editorials put the blame for the airline’s failure squarely on the shoulders of the company’s former administrators.

Many writers emphasised that Swissair’s end is also the end of a national symbol. Both Bern’s Bund and the French-language daily Le Temps speak of the end of a dream, the end of an airline close to every citizen’s heart.

The Bund said customers’ feelings for the new company would be less tinged with national pride. Le Temps also notes that Swissair was the symbol of Switzerland’s economic expansion over the last 50 years.

The Tribune de Genève pointed out that Swiss pride has taken a beating with the disappearance of Swissair. The newspaper said those responsible for the company’s woes should be called to task, as you can’t get away with killing the symbol of a nation.

Failed strategy

Nearly everyone agreed that the fault lies with Swissair’s expansion strategy, and many writers mentioned former CEO Philipp Bruggisser.

For the Neue Zürcher Zeitung (NZZ), the company’s demise is the result of its unrealistic ambition of becoming a major European player, a disastrous plan that began with the purchase of a minority stake in Belgium’s Sabena airlines.

Mario Corti, the man called in to save Swissair, did his best to avoid the collapse of the airline, but by then, it may have been too late.

The Basler Zeitung says it is difficult to talk about a Swissair strategy. According to the Basel daily, the carrier lacked a coherent strategy, unlike Crossair, which has positioned itself as a European regional airline.

Calling for accountability

Zurich’s other main broadsheet, the Tages Anzeiger, suggests the names of two main culprits for the collapse, Bruggisser and another board member, Lukas Mühlemann, CEO of the Credit Suisse Group, and suggests both should be required to answer for their actions.

The blame game doesn’t end with the company’s board. The Zurich tabloid Blick says the economy and the banks are also responsible for Swissair’s demise.

The Berner Zeitung adds the media to the list of culprits, saying that along with the economy and the banks, they prevented an alliance of Swissair with a foreign partner.

As to the future, Crossair is facing a rough start due to the current economic climate according to the Bern newspaper. But the state is right not to take a stake in the new company though, saving its resources to help those who have found themselves out of a job.

The NZZ editorialist says the bankers’ solution to save part of the company is the best when governments in many countries are offering subsidies to their national carriers. The Bund believes the situation could have been far worse without the banks intervention, although many jobs are lost.

The Tages Anzeiger points out though the banks are getting a good deal. They are only buying the best part of the Swissair group, and at a bargain-basement price.

by Scott Capper

02.10.2001 - 12:42

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