16. January 2006, Swissinfo
Liquidator says Swissair demise was avoidable
The liquidator of failed national airline Swissair, Karl Wüthrich, says the company could have survived if management had taken the right action.
Wüthrich argues that Swissair's last CEO, Mario Corti, made a number of strategic errors in the days and weeks before the carrier's demise.
In an interview with the SonntagsZeitung newspaper, the liquidator said that the Swissair group lost its way when it became part of the larger SAirGroup holding.
"It tried to grow too fast, taking out loans to boost its development," he said. "It made the mistake of looking for funding from sources other than its shareholders."
Wüthrich, who was speaking ahead of the premiere of a film about the airline's collapse, believes the human factor also played a decisive role in Swissair's downfall.
"The rules of corporate governance were not respected," he said. "The checks and controls that were being carried out were not sufficiently independent."
According to the liquidator, Corti's predecessor, Philippe Bruggisser, was a man who would not accept being challenged by anyone.
But Wüthrich said that Swissair's demise was not inevitable and could have been avoided with better preparation. He added that a worst-case scenario had never been envisaged, and that Corti always believed the government would step in and save the company from going belly-up.
Corti asked the federal authorities for support in September 2001, just weeks before all flights were grounded on October 2.
The problem, said Wüthrich, was that the man who was hired to save the airline did not have an emergency contingency plan.
The liquidator rejected claims by Corti that Switzerland's largest bank, UBS, was responsible for the grounding. The former NestlÃ© finance chief had blamed the bank for not putting up the funds needed to keep the airline flying when it came to the crunch.
Wüthrich believes Swissair management missed earlier opportunities to sort out the financial problems. He said the airline even had liquidity on the day all flights were grounded.
Four bankruptcy procedures are currently underway, including one for SAirGroup and another for Swissair itself. The liquidator told the Berner Zeitung on Saturday that it could take another two to three years to wrap up these procedures.
SAirGroup's creditors alone, who are owed SFr15 billion ($11.75 billion), can expect to get back a maximum of 16 per cent of the total.
Wüthrich revealed that he is preparing more lawsuits against the company's former administrators and directors.
Last March, he filed lawsuits against Bruggisser and the former finance chief, Georges Schorderet.
He is also suing ex-board members, among them Thomas Schmidheiny and Lukas Mühlemann, as well as Corti, who replaced Bruggisser in March 2001 when the extent of Swissair's financial problems became known.
The next round of lawsuits that should get underway in the coming months will concern around 25 people, according to Wüthrich.
He declined to mention any names, saying only that the lawsuits would be dealt with in writing.
He added that the sentencing could be spectacular if the courts get to handle the cases.
Part of Swissair's flight business was taken over by Swiss International Airlines in 2002.
This new airline was itself purchased by Germany's Lufthansa last year. The company still operates as an independent brand.
swissinfo with agencies
Mon Jan 16, 4:45 PM ET
ZURICH (AFP) - Switzerland is reliving a national nightmare on the big screen, as a new film on the demise of flag carrier Swissair opens this week.
The docu-fiction "Grounding, or the Last Days of Swissair" traces the 2001 collapse of what was long an icon of the global airline industry and a jewel in Switzerland's business crown.
The title refers to the humiliating date of October 2, 2001, when Swissair's planes were unable to leave airports worldwide after aviation fuel companies refused to supply the carrier because of its financial woes.
That left thousands of passengers stranded and wrecked the carrier's reputation for Swiss efficiency and quality service.
The grounding also sent shockwaves across Switzerland, as the country woke up to the airline's ill-fated and flawed expansion strategy which was based on buying up loss-making foreign carriers.
The company's bankruptcy was compounded by the fact that Swissair was steered by leading lights of the country's establishment, who had been seen as steady hands by most ordinary Swiss.
"Switzerland still hasn't got over the grounding," said the Zurich newspaper Tages-Anzeiger.
"We set the bar too high, and we identified ourselves too much with Swissair," it added, pointing to the widespread disbelief at the time that the airline could go under.
Swissair was relaunched in 2002 as the slimmed-down Swiss International Air Lines -- known as "Swiss" -- using a combination of taxpayers' money and input from Swiss industry.
In the face of continued financial headaches, the new airline trimmed its staff, fleet and schedule in several rounds of restructuring.
Swiss was taken over by Germany's Lufthansa last year, although it still flies under its own name.
So I'm wondering when the film will be released regarding swissair's decision to purchase & install the IFEN, which resulted in the deaths of 229 people?
|Powered by Social Strata|