prebennorholm
Posts: 6430
Joined: Tue Mar 21, 2000 6:25 am

Why Is Swissair Grounded?

Thu Oct 04, 2001 1:09 am

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
 
Alessandro
Posts: 4962
Joined: Wed Sep 12, 2001 3:13 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 1:12 am

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...

From New Yorqatar to Califarbia...
 
Bove
Posts: 248
Joined: Sun Apr 15, 2001 10:32 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 1:13 am

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.
 
heavymetal
Posts: 4443
Joined: Fri May 08, 2015 3:37 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 1:18 am

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.
 
HyperMike
Posts: 968
Joined: Sun Dec 05, 1999 7:03 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 1:39 am

I look for the Belgian government to bail out Sabena. That's just a hunch, though.
 
teva
Posts: 1764
Joined: Thu Feb 01, 2001 12:31 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 1:42 am

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
 
heavymetal
Posts: 4443
Joined: Fri May 08, 2015 3:37 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 1:44 am

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.
 
transswede
Posts: 969
Joined: Fri Sep 21, 2001 9:30 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 1:54 am

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.
 
jwenting
Posts: 9973
Joined: Mon Apr 23, 2001 10:12 pm

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 2:07 am

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
 
prebennorholm
Posts: 6430
Joined: Tue Mar 21, 2000 6:25 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 2:09 am

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
 
standby87
Posts: 403
Joined: Tue Jul 03, 2001 2:33 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 2:15 am

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.
 
transswede
Posts: 969
Joined: Fri Sep 21, 2001 9:30 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 2:22 am

>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?
 
prebennorholm
Posts: 6430
Joined: Tue Mar 21, 2000 6:25 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 2:32 am

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
 
vngd4me
Posts: 237
Joined: Wed Dec 20, 2000 7:25 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 3:21 am

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.
 
Thom@s
Posts: 11674
Joined: Thu Oct 19, 2000 2:03 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 3:27 am

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?"
 
transswede
Posts: 969
Joined: Fri Sep 21, 2001 9:30 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 3:31 am

But they have only gotten funds so they can keep flying (a partial schedule) until they remains of Swissair has reorganized around Crossair.
 
prebennorholm
Posts: 6430
Joined: Tue Mar 21, 2000 6:25 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 4:05 am

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
 
prebennorholm
Posts: 6430
Joined: Tue Mar 21, 2000 6:25 am

RE: Why Is Swissair Grounded?

Thu Oct 04, 2001 4:28 am

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