Swissair broke!

Wrong again!

Indeed Europe is too small for all those airlines. One has to stop business, in this case the SAir Group.

KabirT, you said the problems of SAir have their origin in Sabena. Ofcourse I don’t agree (not only because of my ‘roots’). SAir knew Sabena was not making profit at that time. Sabena still is an old fashion airline, still focussed on collonial routes in Africa. Profit was not necessairy, because the company was owned by the state. So far I have to agree with you. Swissair wanted to change the whole airline, first of all by buying new A-330/340’s and A-319/320/321 to replace the older fleet of 747-300’s and the 727-200’s. That’s the reason for the new crisis, not because of bad sabena managment. Don’t tell me I’m wrong, there are a lot of analysts who’ve been investigating the case here.

There are two reasons why Swissair bought Sabena stocks.
– to become a bigger airline
– to have a major position in the international airports, especially at Brussels int. but also in Heathrow.

Swissair does not have money to take off anymore, at least Sabena is still able to help itself, even without support of SAir.

Who’s responsable? First of all the ones who invested in the whole new fleet. But second of all the Banks UBS and CS, they are the ones who are really controlling SAir. Corti is just a puppet.

Geforce – “Teamwork is essential. It gives the enemy other people to shoot at.”

RE: Swissair broke!

It´s not strange SR went out of business. All was due to a too ambitous management plan. We have to remember that SR was a small and profitable airlines some years ago, with a limited catchment area. They were reputed for a superb service at high prices. What happened, they wanted to be really big, becoming a global airline not taking into account that the Swiss market is not so big and that other European airlines were devolping their own hubs and putting prices at really low levels. We can´t think that the WTC affair was responsible for evertything. Iberia tried to do the same. Monopolize the whole Sudamerican market by purchasing many airlines down there and all these ventures went really bad. Is Europe too small to have so many flag carriers?.
Do we need to specialize hubs and create a big European carrier to be able to compete with the americans ones?.

RE: Swissair broke!

Well it was quite hard to believe that out of all…Swissair going bankrupt. And i quite disagree that Swissair is in financial crises due to its OWN management mistake. Buying shares in Sabena was the biggest mistake they did. As i have followed Sabena, it was never a stable airline, some of you might disagree with this point, but this is what i have saw. Swissair as i have seen has one of the best managements, maybe a little faul from the management also, but above 70% of this problem is buying shares in Sabena.

regards

RE: Own fault

LAST EDITED ON 02-10-01 AT 11:16 PM (GMT)[p]GEForce, you have a serious problem with anyone competing against Sabena.

You complained about Ryanair, and you have a serious problem about Swissair now.

Yes, you’re right, it was bad management by SAirLines that led to SR going out of business. But Sabena has hardly been rolling in money either.

I was watching live pictures from Kloten Airport this afternoon on Swiss TV (I’m in France, about 4 miles from BSL), Air crew were in tears, passengers didn’t know what was happening, tempers were frayed. Not because of SR’s management, but because of the previous management, and the ridiculous promises of investment they made to Sabena, LTU, Air Littoral, AOM and Air Liberté.

Crossair have been bought out by Union Bank of Switzerland (UBS) and Credit Suisse (CS), for a paltry 250 CHF per share, the stock valuation before SR, LX and Unique Airport shares were suspended from trading on Friday. Now that LX is de facto Swiss National carrier, you can bet that stock price will shoot up.

As to the Share holders of SR, which was owned 80% by the public at large, they get nothing back. So, before you start wishing aircraft to take out SAirLines’ headquarters, think about who is really put out by this. The Swiss public.

What happens next?

I have a suspicion that LX will soon join oneworld. I was looking at LX’s codeshare operations from BSL, and those that weren’t with Qualiflyer Group airlines are with:
AA (to ZRH, in co-operation with SR)
BA (to LHR)
EI (to LCY, whence Aer Lingus’ flights to Dublin carry LX prefixes)
AY (to Helsinki, with connections to GVA)

All members of oneworld.

Own fault

LAST EDITED ON 02-10-01 AT 08:25 PM (GMT)[p]My opinion

If Swissair is going into banckrupty, that’s because of their own managment mistakes, not because of their shares in Sabena. The future for sabena looks better than for Swissair. But we learned one thing : never trust a swiss again 🙂

It’s obvious that Swissair (with support of the Swiss government) does not care about legal actions, they are a bunch of selfish assholes! Instead of first warning their belgian colleagues about the new plan (Crossair integration), our prime minister and the minister for public enterprises had to hear it from the 6 o’clock news. This is rude, SR desirves to be punished. The lawsuit against SR, started by our own gov back in july, will continue. In fact, they will ask the total amount of money Sabena needs, not only for the € 125 million both parties agreed in, but for the total 250 B€!!

The Swiss Banks (USB/CS) who just bought 70 % of Crossair shares will offer more money so that the Swissair fleet could be integrated into crossair easily. Than, there’s no problem anymore for Swissair, they’ll go into banckrupty, and sabena will go with them. Only Sabena will still be a flying company, not just on paper.

I just heard an interview on the news with Rik Daems, minister of public enterprises. He was asked “do you think this action is smart of SAir?” “This is not a smart action, it’s actually very simple, it’s incorrect, illegal.”

This will probably be the first and last adventure of a Swiss company investing into EU-enterprises. Switzerland is better in banking, corrupting etc. It’s obvious SR failed in all of its actions. I hope they all burn in hell! If only the two planes crashed into the WTC’s, hit the Sr headquarters 🙂

That’s why Switzerland will never become a member of the EU, not because of their moral – neutral principles, but because they (not the people but the banks who controll Switzerland) are a bunch of asocial capitalists, who don’t care about the loss of thousands of jobs, not even in their own country. I was even suprised to see that the union trades are so calm, probably because they are also controlled by the same banks.

Geforce – “Teamwork is essential. It gives the enemy other people to shoot at.”

RE: Swissair broke!

BBC online Business news:

Summary/Time line:
Swissair in crisis
2000
July – Swissair denies it is in financial trouble

2001

Jan – Abandons policy of buying up foreign airlines
March – New chief executive Mario Corti
April – Swissair posts huge loss, begins restructuring
June – Air Liberte goes bankrupt, Air Littoral sold
July – Swissair agrees Sabena restructuring
Sept – Swissair to merge with Crossair
Oct – Flight operations terminated

Ailing carrier Swissair has run out of cash and suspended all its flights indefinitely. In the hours before the shut-down, some of its planes had been impounded while fuel suppliers refused to deliver.

Swissair aeroplanes at foreign airports will be recalled to Switzerland as soon as possible, and stranded passengers have been urged to make other arrangements.

The company said it was not in a position to pay stranded passengers any compensation. Unions warn that up to 10,000 jobs could be lost.

The grounding of the Swissair fleet is the culmination of a long, drawn-out financial crisis, brought on by an ambitious but ultimately disastrous expansion programme.

Trading in Swissair’s shares remains suspended, but even before the termination of flights analysts at investment bank Merrill Lynch said the shares were now “effectively… worthless”.

Rescue attempt fails

The Swissair collapse now threatens a rescue deal, which would have seen its subsidiary Crossair take on the lead role in the troubled group, by acquiring two-thirds of what was left ot Swissair’s operations..

But regional carrier Crossair has now warned that pulling off the deal had become “more difficult” now.

Swissair had hoped to relaunch most of its services as normal on Tuesday, after agreeing a partial rescue bid by two banks, and filing for protection from total bankruptcy.

But it was immediately hit by a series of blows, including the seizure of two of its aircraft at London’s Heathrow airport, and the refusal of fuel companies to supply its operations in Zurich.

At the same time, the Belgian government said it was considering legal action over Swissair’s refusal to commit funds to Sabena, the airline in which it holds a 49.5% stake.

The Sabena board is due to meet later on Tuesday in order to discuss ways to keep Belgium’s troubled carrier going, which could include voluntary bankruptcy.

Hopes hit

Swissair had suspended its flights on Tuesday morning, in the hope of being able to restart operations later in the afternoon.

But the airline failed to find the money to pay for its immediate needs like jet fuel to keep its aeroplanes flying.

Earlier, a spokeswoman had admitted that there were “some problems” associated with the rescue deal.

Although the firm’s bankers had promised immediate cash assistance, it appears that the money was not paid, causing a cash crunch.

The petroleum firm BP said it had stopped providing fuel to Swissair, and was followed by other suppliers at the airline’s Zurich hub.

In London, Swissair reportedly owes airport operator BAA about £300,000 in landing fees, which led to the seizure of two of its jets at Heathrow.

Other Swissair services from London were disrupted ahead of the full suspension.

One of the aircraft has been released, while the other unit will remain impounded pending further discussions over payments with the carrier, BAA said in a statement.

Belgian worries

Even before the suspension, flights to Brussels were not operating, having been cancelled for “security reasons”, after Swissair was unable to pay its portion of a rescue plan for Belgian airline Sabena.

Swissair was due to provide 60% of the bailout funds for Sabena, which were jointly agreed with the Belgian government.

But Swissair’s decision to seek protection from creditors – part of the deal hammered out over the weekend – meant that it effectively defaulted on its Sabena obligations.

‘Flagrant violation’

The Belgian government, which called the decision a “flagrant violation” of the agreements, has said it may take Swissair to court. Sabena itself may follow suit.

The future of Sabena is now in doubt, with some Belgian analysts saying the country’s flag carrier may have to file for bankruptcy in the coming weeks.

The company’s board is meeting on Tuesday evening in the hope of hammering out a rescue plan.

Sabena grounded more than one-quarter of its flights on 1 October as a pilots’ strike went into a fourth day in protest against plans to restructure the ailing Belgian airline.

The Belgian Cockpit Association, which represents 900 staff at Sabena said it will resume strike action unless the chief executive resigns and the airline abandons plans to cut 2,000 out of 12,000 jobs.

The failed rescue package

Swissair’s had hoped to save itself by getting rid of 24 aircraft, and reorganising schedules for the remaining 52 planes under its European regional arm Crossair.

The non-flight operations would have sought bankruptcy protection, jeopardising thousands of jobs in catering, airport retailing and ground services.

Swissair chairman and chief executive Mario Corti emerged from emergency talks on 1 October to say the airline would sell the 70% stake it currently holds in Crossair to Swiss banks UBS and Credit Suisse.

The banks’ offer had been worth 1.36bn Swiss francs (£569m; $840m)

Mr Corti had blamed the suicide airliner attacks in the US on 11 September for causing billions of Swiss francs in costs for the cash-strapped group.

But the company was already struggling under a mountain of debt caused by a failed expansion strategy, before the US tragedy.