Twenty-five years ago: how a public address announcement marked the end of Swissair

A public address announcement marked the end of Swissair Keystone-SDA

“For financial reasons, Swissair is no longer able to operate its flights.” Exactly 25 years ago, on October 2, 2001, this public address announcement at Zurich Airport triggered a national trauma in Switzerland. Swissair was grounded.

Several thousand passengers had already been waiting at Kloten Airport for hours that Tuesday. Across the world, a total of around 20,000 travellers were waiting for their flights, many of whom had already checked in their luggage. Yet for hours, the display board showed only “delayed” for all Swissair flights.

At 3:45pm, Swissair finally informed the media – at that time still by fax – that it would be suspending flight operations with immediate effect. It had been unable to purchase any more fuel, meaning that its 260 aircraft had to remain grounded. At 4:17pm, an airport employee finally announced over the public address system that the airline, once the pride of the nation, had been grounded. Despite the company’s well-known problems, nobody had expected this.

Aggressive acquisition strategy

The beginning of the end came when voters rejected membership of the European Economic Area (EEA) in 1992. This blocked a bilateral air transport agreement between Switzerland and the European Union. Swissair therefore no longer had free access to the European market and had to reorient itself.

The then CEO, Philippe Bruggisser, set himself the goal of acquiring as many small airlines as possible in order to bring Swissair to a critical mass and circumvent the problem of lack of market access. From 1997 onwards, this aggressive acquisition strategy was officially known as the “Hunter Strategy”.

However, the hunt did not bring Swissair any luck. This was because the acquired airlines, including the Belgian Sabena and the Italian Volare, were not only small but also unprofitable. The “Hunter Strategy” failed miserably.

Bruggisser was forced to step down. In early 2001, Crossair owner Moritz Suter took the helm for a short time. Following the resignation of the entire board of directors, led by its chairman Eric Honegger, Mario Corti, then Nestlé’s chief financial officer, took over.

He came under pressure, above all from Swissair’s principal bank, UBS, under the leadership of Marcel Ospel. Corti would later hold Ospel responsible for the grounding. “Super-Mario”, as he was known in the media at the time, did attempt to keep the airline in the air with the help of the government and by setting up a rescue company under the Crossair umbrella.

On September 29, however, the government refused to grant a financial guarantee. On October 1, Crossair, under the leadership of André Dosé, finally took over Swissair’s flight operations. The operating companies SAirGroup, SAirLines and Flightlease were placed under debt restructuring proceedings.

No one held to account

But this rescue came too late. On October 2, the grounding took place, which was intended to persuade the government and the banks to reconsider their position.

Reduced operations resumed the very next day thanks to an emergency loan. On April 1, 2002, however, the last Swissair scheduled flight from São Paulo landed in Zurich at 7:15am. With that, the name Swissair came to an end after 71 years of history.

It took years to come to terms with the biggest corporate collapse in Swiss history. Legally, no one was held to account: all 19 former managers and board members who had been charged were acquitted. The financial settlement was only finalised last December – 24 years after the grounding – with the removal of the holding company SAirGroup from the commercial register.

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Translated from German, reviewed by an English Department journalist.