Swissair grounding 24 years ago The rise and fall of a Swiss sanctuary

Swissair was once jokingly referred to as the "flying bank" because of its solidity and wealth. Then came the abrupt crash with the grounding 20 years ago. A look back at the eventful history of the national airline.

90 years ago, aviation pioneers founded Swissair. The Swiss airline enjoyed an exhilarating rise, but the grounding in 2001 took the country by surprise and it lost a national symbol in the subsequent crash.

By the end of the 1920s, the Swiss state had had enough. The country's airlines were in trouble after the global economic crisis - and the state did not want to pay any subsidies. It exerted pressure - and two competitors had to merge.

Ad Astra Aero - literally: "to-the-stars-air" - from Zurich is the smaller airline founded by Swiss aviation pioneer Walter Mittelholzer. Balair from Basel takes over two thirds of the new airline, which is launched on March 26, 1931, but whose birth is then backdated to January 1: Swissair.

Swissair takes off after the Second World War

After its foundation in 1931, Swissair seemed to go in only one direction: upwards. The airline took off after the Second World War, operating transatlantic flights to the USA from 1947, operating its aircraft at maximum capacity and immediately investing in new planes.

Swissair no longer needed subsidies from 1947, but from 1952 it also offered tickets in the then brand-new economy class. Today's Economy Class had only been established in the USA four years earlier. Those in charge of the airline steadily expanded its route network and fleet, but also focused on service right from the start.

Swissair was the first airline to offer snacks on board - and early on also flight attendants to offer them. The Swiss airline's service soon became the talk of the town - and one of the reasons for its seemingly endless rise. The example of a woman and a man in the early 1980s who were only given second-class tickets for the Geneva-New York route is a good example of this.

Rise to the top of the world

When a first-class ticket was canceled, the woman was awarded the ticket as a good customer, as described in the 1981 book "Swissair - Das Porträt einer erstaunlichen Fluggesellschaft": "The lady from Philadelphia was informed by telephone in a few minutes by the Swissair office there that she had been released from her uncertainty."

Yes, the Zurich-based company is even represented in a state like Pennsylvania at a time when passengers are still being phoned behind - and when traveling in economy class seems to be pure hell.

The airline is floating in seventh heaven. Quote from "Swissair - Portrait": "The fact that Swissair carries more passengers per year than Switzerland has inhabitants, that it is one of the ten largest airlines despite the small size of its home country, is a little known but astonishing fact."

The decline begins in the 80s

As an employer, the company creates a high level of identification among the workforce through high wages and generous benefits: "It is above all the foreigners," writes author Lorenz Stucki, "foreign employees who are noticeably imbued with pride in 'their' Swissair." This also applies to Stucki's book, which was published just as the airline reached its peak.

The ten best airlines in the world

The fact that the subsequent decline was gradual is perhaps also due to authors like Stucki and Swiss journalists who became uncritical of Swissair as a result of generous discounts. This in turn determines that only a few heads from the executive floor are allowed to communicate with the media. A lack of transparency conceals the looming problems.

The ever-increasing drive for size in the industry, for example. The idea behind it: If you can fly more people in an airplane, you will earn more than a competitor with similar operating costs on the same route. Above all, however, it was the liberalization of the market that began in the mid-1980s: Previously, the cost of a ticket from Geneva to New York was still regulated internationally in a cartel-like manner.

Crisis and bankruptcy

In the price war that followed, Swissair was poorly positioned due to high labor costs and a fleet trimmed for luxury and performance and, like its competitors abroad, was forced to enter into alliances. In 1989, it was the first European airline to find an American partner in Delta Airlines. SAS and Singapore Airlines join the alliance, which has to withstand the price war in the 90s.

Legendary airplanes

This is triggered by overcapacity and, in addition to a recession in Switzerland and the strength of the Swiss franc, it also damages Zurich's balance sheet. The purchase of the Belgian airline Sabena in 1995 turned out to be just as much of a mistake as the strategy of acting as the leader of an airline alliance, for which an extremely large amount of money had to be invested. In 1996, Swissair made a loss of almost half a billion francs.

It was not until 2000 that external consultants made it clear to the management that the time for big leaps was over. The withdrawal from investments led to a loss of a whopping 2.5 billion francs that year. A high price for kerosene, the costly liquidation of the Belgian Sabena and the collapse of air traffic in the Black Autumn break Swissair's back in October 2001. The grounding will have seemed as inexplicable to the masses as the senseless bloodbath in Zug.

Black fall of 2001

First the momentous attacks of September 11, which also sent air traffic into a tailspin worldwide. 16 days later, an outrageous mass murder in Switzerland, in which the perpetrator kills 14 members of parliament in Zug and ultimately himself.

On October 1, the already shaken public is informed that Swissair is in financial freefall, before 24 people die in a Crossair crash near Bassersdorf ZH on November 24.

Swissair's legacy is inherited by Crossair, which was once a subsidiary of Swissair and is now called Swiss. The new company makes a loss of almost CHF 1 billion in 2002, in 2003 it is still CHF 687 million and in 2005 Swiss is still CHF 140 million in the red. The major shareholders, i.e. the federal government, the canton and city of Zurich, UBS and CS, can no longer afford to ignore Lufthansa's wooing.

On Tuesday, March 22, 2005, shortly after 8 p.m., the documents are signed. On one side Swiss CEO Christoph Franz and Pieter Bouw from the Board of Directors, on the other Lufthansa boss Wolfgang Mayrhuber.

The men seal the takeover of Swissair's successor by the German competitor. The end of an era, heralded in Zurich's Hilton Hotel - the world goes down in style.

Best result in history in 2019

The integration of Swiss into the Group is completed on July 1, 2007 - and as early as 2008 , the "NZZ" is surprised that "little Swiss earned not much less in 2007 than Lufthansa with its four to five times larger passenger business". In 2009, Swiss made a profit, while Lufthansa even made a loss. The subsidiary also made more money than the parent company in 2011, 2014 and 2015: the legend of the cash cow was born.

Christoph Franz, who as CEO sold Swiss to Lufthansa for CHF 310 million, was promoted to head of the parent company in 2011 and also restructured it before moving to the top of Roche in 2014. Swiss presents the best result in its history in 2019 - with a profit of over 630 million francs.

It is pleasing that the Swiss were once again able to post a healthy profit before the coronavirus crisis - but it still pains the nation to this day that this was not possible before 2005.

Transparency: This article was already published on "blue News" at the beginning of the year. It has been updated and republished to mark the occasion.