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Why Is Swissair Grounded?  
User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Posted (13 years 1 month 4 weeks 23 hours ago) and read 1255 times:

I read in a Danish newspaper today that SR was grounded from yesterday most likely because SR planes might be held back at foreign destinations as a guarantee for short term debts for fuel, landing fees, handling and such.

Do you really think that the UBS and CS banks, who in reality took over SR, will really not pay those bills. But transfer those losses to oil companies, airports, handling companies, catering companies etc.???

If that's their intention, then I would geuss that a restuctured SR (or rather an enlarged Crossair) will get very hard times, flying to dozens of foreign destination, owing money to dozens of private and public companies and institutions, governed by dozens of different laws in dozens of different countries. It would be very stupid to start a new SR that way.

Does anybody know what the truth really is?

Best regards, Preben Norholm


Always keep your number of landings equal to your number of take-offs, Preben Norholm
17 replies: All unread, jump to last
 
User currently offlineAlessandro From , joined Dec 1969, posts, RR:
Reply 1, posted (13 years 1 month 4 weeks 23 hours ago) and read 1223 times:

My guess is that Crossair will be saved and they will dump the rest of the snakepit!Sabena, Swissair, Air Liberte gone allready in the Qualifier group, LOT,TAP and
SAA in deep trouble...



User currently offlineBove From , joined Dec 1969, posts, RR:
Reply 2, posted (13 years 1 month 4 weeks 23 hours ago) and read 1220 times:

If you are Esso, BP, Shell why should you take the chance of losing millions of dollars supplying an airline that can't pay its bills.

These companies, as one example, already extended $2-3M each in "credit" to Swissair before the bankruptcy filing.


User currently offlineHeavymetal From , joined Dec 1969, posts, RR:
Reply 3, posted (13 years 1 month 4 weeks 23 hours ago) and read 1205 times:

With the world economy in perilous flux, why should any bank risk capital by casting capital off into a great debt ridden hole?

"They have the money, they should do it".....that sounds like the kind of attitude that got Swissair into trouble in the first place.


User currently offlineHypermike From United States of America, joined Dec 1999, 1001 posts, RR: 5
Reply 4, posted (13 years 1 month 4 weeks 22 hours ago) and read 1187 times:

I look for the Belgian government to bail out Sabena. That's just a hunch, though.

User currently offlineTeva From France, joined Jan 2001, 1875 posts, RR: 15
Reply 5, posted (13 years 1 month 4 weeks 22 hours ago) and read 1182 times:

Heavymetal,
The Swiss government was working on a plan for SR when the banks decided to take over Craossair and SR.
If they by it, why don't they give the minimum amount of cash needed for daily ops?
If they don't want to run SR, they don't buy it.
If they buy it, it is their responsability to make sure the company can operate. (Or they will loose all their investment and will have to explain this to the people aving money in those banks)
Nobody asked them to act like this.
Nana....



Ecoute les orgues, Elles jouent pour toi...C'est le requiem pour un con
User currently offlineHeavymetal From , joined Dec 1969, posts, RR:
Reply 6, posted (13 years 1 month 4 weeks 22 hours ago) and read 1181 times:

Actually I look for a bailout of Swissair, too. It's simply too much of a national stategic asset for Switzerland.

This too shall pass, folks. Lots of lessons are being learned on both sides of "the Pond" these days.


User currently offlineTransSwede From United States of America, joined Sep 2001, 1000 posts, RR: 0
Reply 7, posted (13 years 1 month 4 weeks 22 hours ago) and read 1166 times:

Not only did the banks scr*w over Swissair economically (as it appears), but they completely destroyed what perhaps is (was) Swissairs greatest asset - Its image to the world.

Who can trust Swissair from now on? How long will it take to recover that image - Is it even recoverable?

They may be better off now just junking all of Swissair, and expand Crossair slowly.


User currently offlineJwenting From Netherlands, joined Apr 2001, 10213 posts, RR: 19
Reply 8, posted (13 years 1 month 4 weeks 22 hours ago) and read 1156 times:

The banks did NOT buy Swissair. They purchased Crossair and part of Swissairs assets (landing rights, etc.) in exchange for debt-consolidation.
This covered part of Swissair's outstanding debts with the banks, but did not provide money to continue operations (even though Swissair originally announced that it would).
Simply said, the banks took Crossair and 60% of Swissairs assets in a bid to save their own customers from loosing a lot of money when Swissair would go due to other creditors. They just were smart enough to move before the government (taxes), oil companies (fuel) and airports (landing fees).
Now those can move in and collect the scraps. Currently the most valuable asset of Swissair is the name, this may actually bring something at auction. All the rest is worthless.



I wish I were flying
User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Reply 9, posted (13 years 1 month 4 weeks 22 hours ago) and read 1153 times:

Seems as there is no real answer to my original question when starting this thread.

Especially Teva, I see that you are just as puzzled as I am about the strange way UBS and CS are managing the situation.

TransSwede: "Who can trust Swissair from now on? How long will it take to recover that image?" Right. I simply thought that Swiss businessmen were smarter than that. Very strange management of UBS and CS assets. I wouldn't open a savings account in any of those banks. My bank has shown dozens of times that they are much smarter in such situations.

Regards, Preben Norholm



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineStandby87 From Switzerland, joined Jul 2001, 536 posts, RR: 3
Reply 10, posted (13 years 1 month 4 weeks 22 hours ago) and read 1150 times:

Correction Jwenting - the banks did NOT release the money for the Crossair shares they bought until it was too late. Phone calls from Government and Swissair to UBS and CS CEOs during the day on Tuesday were left unanswered. Frankly, it is appalling what happened.

A conspiracy to ground Swissair? Yes.
Rumours of insider dealing as Crossair shares took off last week are doing the rounds as well.


User currently offlineTransSwede From United States of America, joined Sep 2001, 1000 posts, RR: 0
Reply 11, posted (13 years 1 month 4 weeks 21 hours ago) and read 1137 times:

>Currently the most valuable asset of Swissair is the
>name, this may actually bring something at auction.
>All the rest is worthless

But for every minute the Swissair planes stay grounded, that names loses its value rapidly.

Will the aircraft leasors demand their aircraft back soon? Or do Swissair own all their planes?


User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Reply 12, posted (13 years 1 month 4 weeks 21 hours ago) and read 1125 times:

Jwenting, thanks a lot.
Technically you are right in every aspect. And maybe your post tells it all.

But still, what real assets did the banks get? They bought the SR stake in LX at market price and took the money back to cover part of their SR credits. But that must be peanuts compared to the banks' investments in for instance SR planes and other productive assets. They are all at a standstill now.

Never mind how the situation is, it is unbelieveable that UBS and CS don't keep SR flying in order to rescue as much as possible of their own credits to SR.

I simply don't understand it.

And to put the name Swissair on an auction. Last week, yes. Today it can't be sold. But maybe the banks, who now owns 70% of Crossair, can force Mr. Moritz Suter to buy it at a substantial sum, and that way salvage a little money mainly to themselves, but of course also to minor creditors like oil companies, airports etc.

Regards, Preben Norholm



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineVngd4me From United States of America, joined Dec 2000, 238 posts, RR: 4
Reply 13, posted (13 years 1 month 4 weeks 20 hours ago) and read 1108 times:

Don't they have a SWISS Bank account somewhere? Big grin

Sorry, I know that was bad but I just had to say it....

As for Sabena I'd also bet that the Belgian Government will help them out.

I hope the Swissair brand survives, it ranks up there with TWA & PanAm in my book.


User currently offlineThom@s From Norway, joined Oct 2000, 11955 posts, RR: 46
Reply 14, posted (13 years 1 month 4 weeks 20 hours ago) and read 1104 times:

This just in: Swissair will take to the skies again this thursday, and most flights will be reopen. Read more on cnn.com or bbc.com or whatever you prefer.

Thom@s  Smile



"If guns don't kill people, people kill people - does that mean toasters don't toast toast, toast toast toast?"
User currently offlineTransSwede From United States of America, joined Sep 2001, 1000 posts, RR: 0
Reply 15, posted (13 years 1 month 4 weeks 20 hours ago) and read 1096 times:

But they have only gotten funds so they can keep flying (a partial schedule) until they remains of Swissair has reorganized around Crossair.

User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Reply 16, posted (13 years 1 month 4 weeks 20 hours ago) and read 1087 times:

If I was UBS and CS, what would I do in order to do the best business for my banks:

The history, or the past:
I lent a lot of money to SR/SAirGroup because I believed that both they and I could make good business out of it. That's okay, that's how I do business.
They disappointed me. That's also okay, sometimes I win, sometimes I lose, I calculated for that.
I chose to get actively involved in a salvage plan because it would mean less loss to me than just waiting for the liquidators to spread the assets to all creditors including me.
I bought a controlling stake in Crossair, so they could make a takeover of assets and continue profitable parts of SR operations and pay me dividend of their future profit.

Present and the future:
I choose not to assign money to short term credits for minor operational expenses effectively grounding SR.
SR will therefore have no income to reduce their debts to me. It cost me money.
SR competitors - my own airline Crossair's future competitors - are left open to attack the customer base. That costs Crossair (and therefore me) a lot of money.
The name Swissair had a value and might be a huge asset for Crossair in the future. By ruining Crossair's customer base I reduce that name value to zero or negative value. That costs Crossair (and therefore me) a lot of money.
I can sit in my armchair and laugh at oil companies, airports, handling and catering companies who now lose a little money too. That laugh is free of charge for me.

Now, I have been in Switzerland at least a dozen times - I was there last month, with Swissair. I have a lot of friends there. I respect Swiss businessmen as clever and smart in business.

Conclusion
But these UBS and CS managers really puzzles me. They seem to me to be SOOOO stupidly acting against their own interests. I would recommend any Swiss cityzen not to trust one single frank to those banks and their management.

Please, mainly Swiss readers here, did I miss something? I am really puzzled because until yesterday I doubted that so stupid people could even be hired to operate a vacuum cleaner in a Swiss bank.

Regards, Preben Norholm



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6517 posts, RR: 54
Reply 17, posted (13 years 1 month 4 weeks 19 hours ago) and read 1077 times:

Okay, now I think I got it. Have a look at http://www.tagesanzeiger.ch/ta/taOnlineArtikel?ArtId=129832

The banks plaid a gamble, that the Bundesrat might step in and get SR flying again on a "Notpaket" (emergency package) loan. That loan will end up being mostly a gift from the taxpayers to the SR creditors, probably mostly the banks.

They gambled and won. After two days struggle. At the expense of the taxpayers.

In many countries that would be cosidered a rather dirty trick in business among gentlemen.

I finally got an answer to my question.

Regards, Preben Norholm



Always keep your number of landings equal to your number of take-offs, Preben Norholm
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