Suter’s departure heralds more turbulence for SAirGroup

Moritz Suter is the third high-ranking SAirGroup official to quit his job Keystone

SAirGroup is facing more turbulent times ahead, following the resignation of its airline division boss, Moritz Suter, after just 44 days in the job.

The group is currently undergoing a strategic overhaul, following the departure of its chief executive, Philippe Bruggisser, in January.

Suter, 57, formerly boss of SAirGroup’s short-haul regional airline, Crossair, gave up his position as head of the SAirLines division on Wednesday. He is to remain on the board on Crossair, which he founded more than 20 years ago.

In a statement, the SAirGroup quoted Suter as saying that he felt unable to carry out his job effectively within the SAirGroup’s management structure.

Suter was quoted in Thursday’s “Blick” newspaper as saying that one “major problems could not be solved with major powers”.

Analysts say Suter faced strong opposition from the management of SAirGroup’s various airlines, and his parochial leadership style had been criticised.

Beat Kaeser, an analyst at Darier Hentsch said Suter had probably upset the board because “he wanted too radical a solution – one that gives up Sabena and the group’s three French subsidiaries”.

Kaeser said he doubted the board’s proclaimed support of Suter was wholehearted. He said that if Suter’s main problem had indeed been with other managers, the board could simply have fired his subordinates.

Zurich’s “Tages-Anzeiger” newspaper suggested that the problem lay with other top management, and said it may be time for chairman and interim chief executive, Eric Honegger, to step down along with several other members of the board.

The Bern-based “Der Bund”, by contrast, suggested that Suter had not been up to the job.

Attention is now focusing on a successor to Suter. Honegger said on Wednesday that he had a replacement for Suter in mind, and one is expected to be announced soon. The “Blick” suggested on Thursday that Christoph Meyer, the chairman and chief executive of loss-making Belgian affiliate Sabena, was a good candidate.

The group is meanwhile continuing its strategy of consolidation, after it abandoned its ambitious programme of expansion by buying stakes in smaller and financially weaker airlines.

The strategic overhaul, announced on January 23, led to the immediate departure of chief executive Philippe Bruggisser, who was the driving force behind the expansion.

In a bid to curb rising losses, SAirGroup plans to continue with its two main pillars of airlines and airline-related activities.

However, at the group has also insisted that its airlines will henceforth have to make a profit on their own and that they can no longer rely on subsidies from the airline-related services.

Zurich Kantonalbank expects the group to report a loss of SFr990 million ($600 million) for 2000. Other analysts are less willing to name a figure until they’ve seen the extent of any possible restructuring charges.

SAirGroup also owns airline caterers Gate Gourmet, airport retailers Nuance, hotel chain Swissotel, and leasing group Flightlease. Some asset sales among these groups are expected to bolster the flagging airlines division.

A major burden on the devision is Belgium’s Sabena, in which SAirGroup has a 49.5 per cent stake.

Suter was seen as very critical of SAirGroup’s involvement in Sabena, and the group is currently reconsidering its commitment to the loss-making Belgian carrier and may even sever its links altogether.

Sabena was rescued from the brink of bankruptcy late last month with a capital injection by SAirGroup and the Belgian government, which still has a small majority stake in the airline.

But the most immediate problem for SAirGroup lies in France where it owns stakes of some 49 per cent in three airlines, Air Littoral, AOM and Air Liberte. All made big losses in 2000 and needed a capital injection in December.

Marc Rochet, new chief executive of the French airlines since February, is due to present a survival plan by March 15 amid reports he may suggest selling some or all of the airlines.

swissinfo with agencies