Swissair

Swissair AG (Schweizerische Luftverkehr ) was the former national airline of Switzerland.

It was formed from a merger between Balair and Ad Astra Aero (To the Stars), in 1931. For most of its 71 years, Swissair was one of the major international airlines and known as the "Flying Bank" due to the financial stability of the airline, causing it to be regarded as a Swiss national symbol and icon. It was headquartered at Zurich Airport and in Kloten.

In 1997 the Swissair Group was renamed SAirGroup, with four subdivisions: SAirlines (to which Swissair and Crossair belonged), SAirServices, SAirLogistics and SAirRelations.

After the expansive "Hunter strategy" in the late 1990s and after the economic turndown following the September 11 attacks, Swissair's assets dramatically lost value, grounding the already-troubled airline in October 2001. The airline was kept alive until 31 March 2002 by the Swiss Federal government.

On 1 April 2002 the successor airline Swiss International Air Lines was founded on the base of former Crossair, taking over most of the routes, planes and staff of former Swissair. Today, The SAirGroup company still exists and is in the process of being liquidated. Swiss International Air Lines was taken over by the German airline Lufthansa in 2005.

Founding years
On March 26, 1931, Swissair - Schweizerische Luftverkehr AG ("Swissair - Swiss Air Lines AG") was founded through the fusion of the airlines Ad Astra Aero (founded in 1919) and Balair (1925). The founding fathers were Balz Zimmermann and the Swiss aviation pioneer Walter Mittelholzer. In contrast to other airlines, it did not receive support from the government. The concise name "Swissair" was the proposal of Dr. Alphonse Ehinger, president of the directorial board of the Balair, despite "Swissair" was first deemed "unswiss". In the first operational year, 64 people were employed, among them 10 pilots, 7 radio operators and eight mechanics. In total, its planes offered 85 seats and the operation was maintained only during the summer, from March to October. The route network had a length of 4,203 kilometres (2,612 mi).

On April 17, 1932 Swissair bought two Lockheed Orion airplanes and was the first European airline to use American planes. The Orion was the fastest commercial airplane at its time and was put to use on the "Express line", Zurich-Munich-Vienna, which led the Lufthansa to ask Heinkel for a model which could top the Orion's speed, and produced the Heinkel He 70. In 1933, the first trans-alpin route was introduced in 1933: Zurich-Milan.

For the first time in Europe, flight attendants were employed on the Curtiss Condor airplanes, beginning in 1934. Nelly Diener, first flight attendant of Europe, attained a world-famous status – but she lost her life after just 79 flights in a crash near Wurmlingen, Germany, on July 27, 1934. The cause of the crash was material fatigue.

Just a few years later, in 1936, Douglas DC-2 airplanes were acquired and London was introduced to the route network. In 1937, the bigger Douglas DC-3 was bought. In the same year, both founding fathers died: Walter Mittelholzer during mountaineering in the Steiermark, Austria, and Balz Zimmermann succumbed to an infectious disease.

On August 27, 1939, days before World War II broke out, the airspace over Germany and France was closed. Swissair was forced to suspend service to Amsterdam, Paris and London. Two days later, Swissair's aviation was closed completely. Of 180 employees, 131 had to serve in the army, and in spite of the war, some routes were re-introduced, like those to Munich, Berlin, Rome and Barcelona. In 1940, an invasion of Switzerland was feared, and Swissair moved its operations to the Magadino plains in Ticino. The operations were suspended definitively in August 1944, when a Swissair DC-2 was destroyed in Stuttgart during an American bombing raid.

On July 30, 1945 Swissair was able to resume commercial aviation.

Ascension


In 1947 the rise of shareholder capital to 20 million Swiss Francs enabled long haul flights to New York, South Africa and South America with Douglas DC-4 aircraft. The modern Convair 240, the first Swissair planes with pressurized cabins, was used for short- and medium range flights from late 1948. The first flight to New York via Shannon and Stephenville (Newfoundland) took place on May 2, 1947 and actually ended in Washington, DC because landing at New York's LaGuardia Airport was not possible due to fog. Total flight time was 20 hours and 55 minutes.

The public, including the federal government, the states of Switzerland (Cantons), municipalities, the Swiss Federal Railways and the Swiss postal services took over 30.6 % of the shares and enabled the Swissair to get a credit of 15 million Swiss Francs to purchase two Douglas DC-6 airplanes. By that act, Swissair became the national flag carrier of Switzerland. The new pressurised aircraft were to replace the DC-4 on transatlantic routes.

In 1948, the airport in Dübendorf, which served as the base of Swissair, was relocated to Zurich-Kloten. Military aviation continued in Dübendorf. The next year, Swissair plunged into a financial crisis because of a sudden devaluation of the British Pound because fares, except traffic to the United States, were calculated in the British currency. At that time, the traffic to England made up 40 % of Swissair's revenues.

In June 1950, Walter Berchtold, manager of the Swiss Federal Railways, was elected to the directorial board of Swissair and served as the director. Until 1971, he coined the corporate culture of Swissair. He grasped the importance of corporate image and corporate identity, and after the example of BOAC's "Speedbird", he introduced the arrow-shaped Swissair logo. Giving flight personnel a distinct uniform was also an important point. At the time flight attendants' uniforms resembled the gray-blue ones of the Swiss Women's Army Corps, so Berchtold introduced ones in a modish marine blue. Swissair put a veritable fashion competition of Europe's airlines into motion.



In 1952 the cabin layout on northern trans-Atlantic routes was changed into one with a first and a tourist class. First class consisted of comfortable chairs in which one could sleep, given the name "Slumberettes". A short time later, those sleeping chairs were succeeded by beds, modeled after the U.S. Pullman railway wagons. Two adjacent seats were moved towards each other and formed a lower berth. The wall panel could be folded downwards, forming the upper berth in which the other person could sleep. One year later, the tourist class was introduced also on Europe flights.

In 1953 Swissair, together with the city of Basel, founded a charter Company called Balair, re-using the name of one of its predecessors, a company which initially used older Swissair aircraft to fly to holiday destinations.

As the first European customer, Swissair bought the Douglas DC-7C which enabled it to perform non-stop flights to the United States. For shorter-range routes, the Convair Metropolitan was put into use.

In 1957, the Far East was introduced to the route network. Direct flights to Tokyo were established, with intermediate stops in Athens, Karachi, Bombay, Bangkok and Manila. In the same year, Swissair helped Aristotle Onassis to form the new Greek airline, Olympic Airways.

While the competitors first looked at turboprop airplanes to replace their piston-engined craft, Swissair introduced jet airplanes directly. Together with SAS, Swissair bought Douglas DC-8 aircraft which were delivered beginning in 1960. For medium and short ranges the Sud Aviation Caravelle was purchased. The aircraft were maintained together with SAS, and also manuals for operation and maintenance were co-written. As one of the few companies worldwide to do so, Swissair bought Convair 990 "Coronado" aircraft in 1962, for their medium and long range routes. Although the machines did not completely fulfill the contractual specifications at first, they were liked by employees and customers alike. They were operated on the airline's routes to South America, West Africa and the Middle and Far East.

1966 saw the introduction of the Douglas DC-9. This type developed into the backbone of the short- and medium-range routes, and, after convincing Douglas, on behalf of Swissair the Douglas Corporation offered a stretched variant: the DC-9-32. For the first time, Swissair was the launching customer of an aircraft type.

In 1971, Armin Baltensweiler took over as the president of the directorial board and ran the enterprise for over two decades. In the same year, the first Boeing 747-200 Jumbo-Jet was acquired, and in the next year the first McDonnell Douglas DC-10-30 followed. Both types shaped the long-haul fleet until the 1990s. Again, the specifications of both aircraft were developed in collaboration with SAS. Also in 1972, Switzerland introduced a prohibition of night flights, which led to the cessation of cheaper night fares.

The second airline to offer service to the People's Republic of China was Swissair, which introduced service to Beijing and Shanghai in 1975. In the same year, Swissair was the launch customer for another aircraft type: the DC-9-51. In 1977, Swissair was the launch customer for the third DC-9 type: the DC-9-81 variant, which is now called the MD-80. Armin Baltensweiler had traveled to a meeting of McDonnell-Douglas' directorial board in St. Louis to convince them of further stretching the fuselage of the DC-9-51. Since then, Baltensweiler was called the "Father of the MD-80".

In 1979, Swissair was the first company to order the Airbus A310-200 and the Jumbo-Jet variant with a stretched upper deck, the Boeing 747-300. Also, the Fokker 100 short range aircraft and the three-engined MD-11 were aircraft for which Swissair was the launch customer.

1983 saw the replacement of the older DC-9's by MD-83 aircraft.

Since the 1960s, Swissair was a world leader in the development of cargo reservation systems (CRS). PARS and CARIDO were examples for booking passenger seats and freight space.

"The flying bank"
After the 1960s, air traffic increased quickly and allowed many airlines – many of which were quasi-monopolists on their routes – to yield high revenues. Especially Swissair profited from her excellent reputation as a quality airline and from the fact that the political neutrality of Switzerland allowed the company to fly to exotic, but lucrative destinations in Africa and in the Middle East. In geographic terms, the central position of Switzerland in Europe helped her to generate revenue from transfer passengers.

With the beginning of deregulation and liberalisation, airlines felt growing financial pressure. In 1978, Moritz Suter founded a regional airline named Crossair, which put Swissair under additional stress. To counter these changes, Swissair invested their large financial reserves into takeovers and into flight-related trades like baggage handling, catering, aircraft maintenance and duty-free stores. The advantage of this strategy was the diversification of economical risks, but the core business of Swissair, commercial aviation, suffered. In the end of the 1980, Swissair was thus called "The flying bank", appealing to the large hidden assets and the huge liquidity Swissair had. Secondary, the "flying bank" was the designation for a corporate group which cared more about financial management than about flying airplanes.

Concentration
In regard to the furthering liberalisation of Europe's airline market, Swissair focused more on commercial aviation and extended her partnerships. As the first European airline, Swissair signed in 1989 a cooperation treaty with Delta Air Lines and the Singapore Airlines to form the alliance "Global Excellence". In 1990, together with SAS, Austrian Airlines and Finnair, the "European Quality Alliance" was founded. The latter alliance was later renamed to the "Qualiflyer Group".

Because of the weak economy, the Gulf War and rising fuel costs, many airlines lost money in 1990. The ongoing liberalisation enforced the competition additionally, and Swissair lost 99 million Swiss Francs in the first half year, and so Swissair was not able to pay dividends to its shareholders – for the third time after 1951 and 1961. In the years 1991 and 1992 Swissair had to dissolve financial reserves to cushion the losses from the commercial aviation sector.



On January 1, 1991, commercial aviation in Europe was completely liberalized and the existing capacities led to an aggressive competition among the airlines. In a national referendum on December 6, 1992, Swiss citizens rejected taking part in the European Economic Area, EEA. This referendum was a significant disservice to Swissair, an airline with a minute domestic market: Its planes were not allowed to take up passengers during intermediate landings in EEA countries (e.g., Zurich - Frankfurt - New York), and Swissair was not allowed to offer tickets for sections that fully lie in EEA member countries (e.g., Zurich - Frankfurt - Paris). See also freedoms of the air.

Like other airlines of smaller countries, Swissair now was under significant pressure. More and more national airlines affiliated themselves with airline alliances in order to maintain a worldwide market presence. But in order to be interesting for American alliance partners, an airline must have a critical size in terms of passenger numbers. To meet that goal, in 1993 a fusion of Swissair, KLM, SAS (each 30% of the new company) and Austrian Airlines was proposed. This project bore the name "Alcazar", after the Spanish term for "castle". But in various countries, this project was criticised. In Switzerland itself it was thought that the huge financial assets were too precious to merge Swissair with the other three airlines.

Hunter Strategy
In the 1990s Swissair initiated the Hunter Strategy, a major expansion programme devised by the consulting firm of McKinsey & Co. Using this strategy, Swissair aimed to grow its market share through the acquisition of small airlines rather than entering into alliance agreements. Swissair decided to acquire 49.5 percent of the unprofitable Belgian flag carrier, Sabena, and significant stakes in the carriers Air Liberté, AOM, Air Littoral, Volare, LOT, Air Europe, TAP Portugal, Turkish Airlines, South African Airways, Portugalia and LTU.

The buying spree created a major cash flow crisis for parent company SAirGroup, and was exacerbated by the environment caused by the September 11 attacks. Unable to make payments to creditors on its large debt, and with the refusal of UBS AG to extend its line of credit on 2 October 2001, the entire Swissair fleet was abruptly grounded. Many blamed UBS for the fiasco, causing demonstrators to take to the streets with signs referring to UBS chairman, Marcel Ospel as "Bin Ospel" and redefining the bank's acronym, "UBS" as the United Bandits of Switzerland.

Two large bridge loans from the Swiss government were required to finance continuation of flight operations. This notwithstanding, with the resumption of flight service, it was necessary for flight crews to carry large sums of cash to purchase fuel at foreign airports.

In 2002, SAirGroup's Stake in Crossair was sold to the Swiss banks UBS and Credit Suisse. Also, the 'new' Crossair took over various assets of former Swissair, including employees, aircraft and most European routes. Swissair and the SAirGroup were handed over to the liquidation firm of Jürg Hoss Liquidators and ceased operations on 31 March 2002. Crossair was renamed Swiss International Air Lines and officially took over Swissair's intercontinental routes on April 1, 2002, ending 71 years of Swissair Service.

The SwissairGroup (the name change from SAirGroup to SwissairGroup was announced in 2001 but never officially changed) still existed as 'SAirGroup in Nachlassstundung' for several years until all assets were liquidated, including a large auction where many of the remaining Swissair assets, such as historic items, were auctioned. Today, Gategourmet continues as a subsidiary under the parent firm Gate Group.

Factors behind collapse
Like other airlines, Swissair's operations and profitability were disrupted in the wake of the September 11, 2001 attacks on the United States. As Swissair's directors included several politicians, commentators have pointed to potential conflicts of interest as fundamental to the demise of Swissair. Media have also suggested that the directorial board failed to oversee the actions of Philippe Bruggisser (Chief Operating Officer since 1996) and Eric Honegger (board member since 1993 and later board president), and that they left behind a convoluted corporate structure and financial commitments – among others a further purchase of 35.5 percent of Sabena's stocks – which would only come to light when Mario Corti was trying to save the airline.

The judiciary is continuing to examine why Swissair acquired counselling that supported the Hunter Strategy, and why Swissair continued to make certain payments despite nearing insolvency. Questions have also been raised about federal aid given to Swissair and the politicians involved. The highly competitive nature of the market during the business's final years also precipitated its demise: like rival company Sabena, Swissair fell victim to the competition of budget airlines such as Ryanair and EasyJet.

A BBC correspondent said regarding the collapse "Something did die in Switzerland that day: not just an airline but an image the Swiss had of themselves and, more importantly, of their business leaders" and "The Swiss financial community's reputation for good business sense was already seriously damaged by the Swissair disaster."

Management trial
The criminal trial began 16 January 2007 in Bülach. The entire Swissair management board stood facing criminal charges of mismanagement, false statements, and forgery of documents. Top defendants in the trial were Mario Corti, Philippe Bruggisser, George Schorderet, Jacqualyn Fouse, Eric Honegger and Vrena Spoerry. Corti, Honegger and Spoerry entered statements proclaiming their innocence.

On 7 June 2007 the court in Bülach cleared the defendants of all criminal charges over the airline's 2001 bankruptcy.

Fleet
In its 71 years of existence, Swissair operated the following aircraft.

Swissair Asia
Swissair Asia was formed to serve Taipei, Taiwan, within the Republic of China, while Swissair was maintaining service to the People's Republic of China. Aircraft formerly used by Swissair Asia had the Chinese character Ruì (瑞), from the Chinese translation of Switzerland, Ruìshì (瑞士, means Switzerland), on the tail fin instead of the cross.

Corporate affairs
The Swissair head office was on the grounds of Zurich Airport and in Kloten.

KSG, Architects G.Müller + G.Berger designed the final head office complex for the airline. It was in proximity to the main airport facilities and to area freeways. The first phase of the building included offices for 1,600 workers, computer rooms, printing rooms, and 500-seat restaurant facilities. The second phase included open plan office room, another computer laboratory, and expansions of the restaurant facilities.

Swissair legacy
In 2002 the successor airline Swiss International Air Lines was born. First called Swiss Air Lines, this Company was based on the former Crossair, and was basically a merger of Crossair and former Swissair employees, routes and aircraft. The Company Swissair continued to exist (in liquidation), but had no further assets. Due to legal problems with Swissair, the name had to be changed to Swiss International Air Lines

Swiss took over 26 longhaul and 26 medium haul Aircraft from the Swissair fleet and refurbished the liveries to turn it into the new Swiss fleet, together with the former Crossair Fleet consisting of Embraer 145, Saab 2000, MD-80 Series and Avro RJ.

After problems with the former Crossair pilot unions, who refused to accept different conditions than the former Swissair pilots within the same airline, a subsidiary called Swiss European Air Lines was founded which belongs 100% to Swiss International Air Lines.

In 2004, it appeared that Swiss was going to become a member of the Oneworld alliance. It had codeshares with Oneworld carriers British Airways, American Airlines, Cathay Pacific, Qantas, Aer Lingus and Finnair, and held a strategic partnership and joint operation for all service to North America and AA-operated flights beyond U.S. gateways using American Airlines. Swiss started to terminate these codeshare agreements, but did not terminate the AA alliance. A theory emerged that Swiss was planning to use its partnerships, the AA alliance, and its partnership with British Airways, a strong supportive member of Oneworld, to join Oneworld itself.

However, in March 2005 Swiss was taken over by the German Lufthansa Group and Deutsche Lufthansa AG, the flag carrier of Germany. With the merger with Lufthansa, Swiss joined the Star Alliance. With this move, Swiss's frequent flyer club, Swiss TravelClub became part of Miles & More, which was originally the Lufthansa frequent flyer club. It acts as both airlines' frequent flyer programme, along with many other airlines.

Continued use of the "Swissair" brand
Swiss retains the rights to the "Swissair" name, whose value was estimated at more than 10 million Swiss francs in 2010. In order to prevent the trademark from becoming void through disuse, Swiss licensed it to Hopscotch Air, which operates a fleet of Cirrus SR22 plane in the U.S., for use from 2010 to 2013. In Switzerland, the trademark is protected through its use by an aviation sports club, Sportfluggruppe Swissair.

Accidents and incidents
Over the 71 year history of Swissair, there were nine major incidents reported resulting in 390 fatalities.