Not so many years ago, whenever I wanted to cite an example of something stable, ever punctual, and everlasting, I would say "Swissair". Thirteen years ago I interviewed the CEO at the time, Otto Loepfe.
He told me of Swissair's conservative business approach - so conservative that they preferred to use their own equity rather than raise loans. The airline posted profits annually and even paid out dividends regularly. Loepfe said: "We don't want to be a big airline, we want to stay a medium-sized airline and keep our good name - anyway Switzerland is only a small country."
And so Swissair quietly went about its business and the world looked on in envy - until the mid-1990s, when it appointed an American CEO, Jeffrey Katz, from American Airlines. Katz arrived with a completely different approach, one more attuned to a country of 280 million perhaps, rather than to a small nation of 10 million.
He claimed the European Union had created a situation where no small business could survive, so you had to grow, expand and not keep just to the flight sector, but to stretch into all areas connected with tourism and leisure - thus giving full meaning to the "economic fight".
With this new strategy, Swissair began to buy everything that moved. It bought hotels, catering firms, entered joint ventures in travel companies, acquired a global chain of golf courses, an accountancy office and even a taxi company. However, Swissair never acquired the knowledge or ability to manage so many diverse businesses, and losses began to pile up.
The next stage began three years ago, when Swissair turned its eyes on European airlines, because "Big is Beautiful." Swissair bought 40 percent of Poland's Lot, and half of Belgium's Sabena, plus one German, one Italian, and two French companies. So little Swissair grew into a giant of the skies with 70,000 workers.
The theory of an "economic fight" caught everyone's imagination - until 2000 when the company posted staggering losses of $1.8 billion and an unbelievable debt of $10 billion. Katz had to go, and along came Mario Corti.
The terrorist attacks on America were the final straw on the Swissair camel's back. The airline could not meet interest repayments to the banks, and could not even pay for its fuel. And so it halted all its flights at the beginning of the week for two days.
In the Swiss media, they haven't quite digested the enormity of the fiasco. They are saying that not only has the good name of Swissair been sullied, but that of Switzerland itself. But the greatest dishonor for Swissair's staff is the end of the many years when the company would never rely on any government, never ask any politician for favors. Now it must turn to the Swiss government for assistance. Without it, the most privately-run company in the world would end its days in the hands of the official receiver.
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