September 2002
No 209

TROUBLE IN THE AIR

After September 11th, 2001, numerous airlines found themselves in financial
difficulty. Fear of flying hit some airlines so hard they went bankrupt.
Swissair, Switzerland's prestigious 'flag carrier', was one such airline.
Ten years earlier the same fate befell Pan American, America's de-facto
'flag carrier', when the Gulf War decimated international travel.

In his latest study Victims of Hubris? The decline and fall of Pan Am and
Swissair Dr Simon Bennett of the University of Leicester's Scarman Centre
argues that both flag carriers were in trouble long before they succumbed to
war and terrorism.

"The fundamental problem with both Pan Am and Swissair lay in their
corporate psyches. Favoured for many years by their respective national
governments, both airlines found it difficult to come to terms with the
harsh economic realities of deregulated air travel and Reaganomics. When the
penny finally dropped, neither carrier could recover its position," says Dr
Bennett

Dr Bennett points to Pan Am's fate as a learning opportunity - one that
Swissair conspicuously overlooked. Dr Bennett added: "Only if commercial
aviation dedicates itself to learning and applying the lessons of the past
will it avoid further damaging collapses".

NOTE TO NEWSDESK: For more information, please contact Dr Simon Bennett on
0116 252 5700.
Copies of the report priced �5.50 incl.p&p are available from Ms Neha Shah,
Administrator, at Scarman Centre, University of Leicester Tel 0116 252 5737
e.mail ns62@le.ac.uk