Swiss To Be Sold To Lufthansa Rumour

danialanwar · Mon Apr 14, 2003 12:11 am

Our infamous, and often not all too accurate SonntagsZeitung reports that Swiss is in negotiation with Lufthansa to be bought over (i.e. LH buys LX). Concessions like scraping longhaul flights are said to be considered. The article also said that a similar offer was made to British Airways but turned down.

If true I can imagine that this will ring alarm bells with competition watchdogs ... an LH block covering Scandiavia, Germany, Switzerland and Austria

teahan · Mon Apr 14, 2003 12:15 am

Well a second story, this one confirmed by Swiss, is that the managers will be getting bonuses equal to 2-4 months of their normal salary. Nothing short of shocking considering their financial position and all the employees they are laying off.

Jeremiah

PW100 · Mon Apr 14, 2003 12:22 am

Why would LH buy into Swiss [and reduce long haul flying] other than eliminate hub competition for their MUC hub??

PW100

ba319-131 · Mon Apr 14, 2003 12:27 am

The idea in principle is sound,just turn Swiss into a european regional and have them feed traffic to MUC and FRA.

I sure hope this does not happen though.

Lets hope when traffic picks up after the war and SARS(+what ever next!?) that Swiss and all carrier can get back into the black.

Rgds

BA319-131

Unique · Mon Apr 14, 2003 12:32 am

BA319-131, unfortunately it's not the war or SARS who is scrapping the airline! It's the management, uncapable and incompetent as they are! I'm terribly sorry to say that, but the old Crossair was a complete mess, so how can anybody expect it to be better with an even bigger airline but with the same managers?
I'm praying that it's not like this, but I'm too realistic...

Guest · Mon Apr 14, 2003 12:57 am

Well I'd rather put it like that. Switzerland doesn't need an own airline. LH could easily have a few more flights into ZRH whilst for exampla AF could feed Geneva a little more. That's it.
I know, it's their pride to have their own airline but honestly I don't think it's needed at all.

teahan · Mon Apr 14, 2003 1:11 am

B737-700,

Well I'd rather put it like that. Switzerland doesn't need an own airline. LH could easily have a few more flights into ZRH whilst for exampla AF could feed Geneva a little more. That's it.
I know, it's their pride to have their own airline but honestly I don't think it's needed at all.

Well I disagree with that, and for a country of over 7 million, I'd consider such a statement borderline insulting. While an airline with 110 planes is nothing short of ridiculous, Switzerland certainly needs some kind of airline. 50-60 planes, 10 of those longhaul would be by all means reasonable.

Jeremiah

ZSSNC · Mon Apr 14, 2003 1:25 am

I wonder where all these rumors are coming from of LH merging with SK and taking LX over. SPIEGEL ONLINE was just reporting on Friday that LH is currently losing 50 million ? (which would be much more than the alleged 3 million USD that CX is losing every day) each week and that their load factors to the Far East are down to 25 %. Perhaps it is wishful thinking of certain airlines that LH is going to come and take them over but honestly I do not see it happen in the current economical climate. I think LH would be better of focusing on its own problems instead of worsening them by buying an unprofitable airline. Then, when demand rises again they could analyze a merger with SK or a takeover of LX.

ZSSNC

saab2000 · Mon Apr 14, 2003 2:55 am

Unique,

Thanks for your opinion, but I think you are wrong. In fact it was Swissair that was a big mess. Not Crossair. The fact is that SWISS was built from Crossair but now the old, successful formula is being replaced by SR people and it is going to hell.

Crossair always made a profit in the past. Now with the help of the former Swissair people we are losing millions per day.

Of course, it is not only them, but the fact is that the lower cost structure is Crossair has been completely ignored and now we have many layers of management and all sorts of peripheral, costly things.

If this airline survives I will be amazed. I personally think it is disgusting how this airline is turning into a new Swissair. It looks like nobody has learned a thing from the past.

ba319-131 · Mon Apr 14, 2003 3:03 am

Unique,

Many of Swiss's problems may be down to the current mgmt,regardless of that,the current war,SARS and world economy is not helping any airline right now,including Swiss.

teahan · Mon Apr 14, 2003 3:11 am

Saab2000,

Thanks for your opinion, but I think you are wrong. In fact it was Swissair that was a big mess. Not Crossair. The fact is that SWISS was built from Crossair but now the old, successful formula is being replaced by SR people and it is going to hell.

Well I simply can’t believe all the talk about how perfect Crossair was, what a great CEO Suter was etc. Sorry, but Crossair was in as much s*** as Swissair.

Crossair always made a profit in the past. Now with the help of the former Swissair people we are losing millions per day.

The Basel hub was loss making and Crossair only subsidised it thanks to the many routes it (profitably) operated for Swissair.

Of course, it is not only them, but the fact is that the lower cost structure is Crossair has been completely ignored and now we have many layers of management and all sorts of peripheral, costly things.

I had a lower cost structure but it also had a nasty habit of wasting money. Just look at the Embraer order.

While I think a smart idea would have been to use what Crossair was then (fleet size and all) on mainline Swissair routes instead of the 26/26 plan, however I simply can't believe it was sustainable in its old form.

Jeremiah

[Edited 2003-04-13 20:14:48]

SwissA330 · Mon Apr 14, 2003 3:58 am

Well of course they made more profit...
They were kinda subsidied by SR. They needed no Marketing, no ticket offices etc. Swissair did it for them. Thats how they were cheaper. I have no idea how people could think of continuing crossair -as swiss- on the same cost-basis, although they had to takeover many VITAL parts from swissair, without which they just wouldn't be an airline.
It's not turning into swissair. It's turning into an airline that has to work on its own rather than beeing 'protected' and 'looked after' by a parent-company.

Just my 2 Rappen... Smile/happy/getting dizzy

Pat

SwissA330 · Mon Apr 14, 2003 5:57 am

Anyway,
Back to the topic...

IF this should happen, how big would swiss still be?

Really hope this won't happen...
(i.e. Swiss will survive as a own carrier, and not go bankrupt..)

Pat

clipperno1 · Mon Apr 14, 2003 6:14 am

I don't really see why LH should do it. They are obviously runing into some trouble right now, so why add another cost factor into their widley spread portfolio?! If things really turn out as bad as projected in some views, I guess they'd rather simply wait 'till the demise of SWISS and pick up the then-cheap-assets, devide the swiss market with AF feeding their Hubs. And also think about what huge process & legal stuff this will be(two different economic-unions EU+EFTA). There's also no immediate use for SWISS routes in the Star Alliance.

SWISS was a nice project on the paper, but it was missed to do a clean cut. The same SR-Managment is now spending the funds of another airline again.
I think it's on a dead heading here.

WOW, i never believed those guys in the late 90s who said that there will only a handfull of Airlines left internationaly at the end of this decade. The way things are going now with the two biggest airlines currently at court, I found myself pretty damn dumb.

saab2000 · Mon Apr 14, 2003 3:04 pm

I suppose there is some truth to the statements about Swissair and Crossair, but as a former Crossair employee I do see it differently. Anyway.....

I cannot imagine that SWISS will be bought by anybody. Unfortunately, the company is way too big. It probably started out too big. But at the time, people still had in their mind the great days of the 90s when both Swissair and Crossair were doing well. The fact is that then there were enough passengers and revenue from other sources to finance 2 airlines. Now there isn't and the company should have been sized accordingly.

One of the things that makes us so angry is that we see the company being formed into a new Swissair and the Crossair people are slowly being shut out and eliminated. Rather than the old SR people having to adapt to our standard, we have been forced to adapt to theirs. I could give countless examples. And they are not being asked to make any sacrifices either. All of the sacrifices being made here are being made at the expense of Crossair people - and this makes no financial sense because we earn on average 63% less than our "colleagues" from the former Swissair. That, my friends, is the deadly power of Aeropers.

MD-11 forever · Mon Apr 14, 2003 3:54 pm

Saab 2000,

I don't know about the "deadly" powers of Aeropers, but as an outsider I just assume that the rule "who is without any guilt shall throw the first stone" applies to this case. It alsways takes two to have an argument.........

"I cannot imagine that SWISS will be bought by anybody. Unfortunately, the company is way too big. It probably started out too big. But at the time, people still had in their mind the great days of the 90s when both Swissair and Crossair were doing well. The fact is that then there were enough passengers and revenue from other sources to finance 2 airlines. Now there isn't and the company should have been sized accordingly."

I just would like to remind you, that the good old Swissair had a big advantage in revenue matters compared to the new Swiss. Swissair had the cash-cows SR Technics, Gate Gourmet and so on which could make up some losses in the airline "branch". As far as I know, Mr. Suter never was a friend of this strategy, and subsequently Mr. Dose as well as the fellow ex- Crossair managers adapted this "doctrine" into the new airline. Just as an example, that not everything with a Swissair tag on it is per definition bad...........

Cheers, Thomas

Unique · Mon Apr 14, 2003 3:58 pm

Saab2000, with all respect, please allow me to give just one example of the contrary: ex-Crossair managers turn down a brilliant Swissair-computer system just because it is ex Swissair. They put their own system in place, uncapable to cope with the new tasks.
That's pure politics!
I'm neither ex-SR nor ex-LX, but from my neutral point of view, I have my thoughts (and doubts).
In any case, something has to be done! If LH is really buying Swiss, I don't know if this will be good for the swiss aviation scene. If might surely help to overcome the discriminating measures Germany wants to apply regarding overflying their territory...
Cheers

saab2000 · Mon Apr 14, 2003 4:08 pm

MD-11 Forever,

Thanks for your post. I will be the first to say that not all with a Swissair tag is bad!! I used to be a loyal Swissair passenger for years before I became a Crossair pilot. They had excellent service and the company was well respected. As far as the SR Technics goes and Gate Gourmet and write-offs, etc. well, now I must admit we are getting out of my league. I am not an accountant and so I cannot see where those fit into the big picture. But I know that they DO fit in.

I do not claim to know all about aviation or about this company or management. But I do see it as an insider who feels that we are being badly discriminated against.

Anyway, I do not want to start an argument. I think we both agree that we want the company to survive as an independent entity. Both of our jobs depend on this. As for my long term job, I do not know. First of all, I have been given my "Kündigung" by the company. Naturally, this does not make me feel too good about what is going on there. I am looking elsewhere for a job. The working atmosphere is absolutely poisonous right now between the crews of the former Swissair and the crews of the former Crossair. They don't look at us or reply when we say hello in the OPS Center...

You are right that it takes two to have an argument. I would like to see the cool heads on both sides sit down and TALK NICELY to each other for once.

Thanks for listening!!

Sabena 690 · Mon Apr 14, 2003 4:15 pm

@Saab2000, just another argument here:

But at the time, people still had in their mind the great days of the 90s when both Swissair and Crossair were doing well.

Swissair was actually in a much more worse financial shape than you think. Their airline activities were already lossmaking since half the eighties!! It's thanks to Gate Gourmet,... so their additional activities (as Thomas correctly pointed out) that money was made, but NOT with their airline activities! Note that this counts for SR, I have no idea about LX in that time.

Regards
Frederic

saab2000 · Mon Apr 14, 2003 4:18 pm

Unique,

At least we agree on one thing: there is discrimination between Germany and Switzerland regarding the overflight rights for landing and departure!! Of this there is no doubt.

Anyway, I would like to know which brilliant Swissair system you are talking about which was rejected by Crossair management. Because ALL of the systems that we used as Crossair pilots have been replaced with Swissair systems!!

Our schedule planning system is ex-Swissair, our Notam system is ex-Swissair, our flight planning system is ex-Swissair, shortly our Nav chart system will be ex-Swissair, our crew briefing system is ex-Swissair, our internal internet system is essentially ex-Swissair.

Don't get me wrong. I am in favor of using better systems. And believe me, I am not nearly as angry as most of my colleagues about this. I think it is important that we have one system for the whole company, not two - one ex-Crossair and one ex-Swissair. What has made us angry is that most of these systems have been forced upon us with little notice and little training.

Anyway, thanks to all for their opinions. When I say something here it is usually just that - an opinion. When things are going nicely, we all get credit for the success. When things are going badly like they are right now, then EVERYONE looks to someone else to blame. In a sense, we are all to blame and in a sense none of us are to blame. Nobody could have predicted the terrorist attacks on Sept. 11, 2001. Nobody could have predicted another Iraq war, nobody could have predicted SARS, etc....

Let's all hope it works out for the best.

MD-11 forever · Mon Apr 14, 2003 4:27 pm

Saab2000,

I am very sorry to hear about your "Kuendigung"... I really hope that you'll soon find a new position and be back in the air again!

Regarding the dispute between ex-Swissair and ex-Crossair, I only know one ex-Swissair pilot (a friend of mine who flies the MD-11), and he's definitely not one of the kinds who is not greeting ex-Crossair crews.

As a possible explanation of those attitudes, I can only think of the arguments some CCP-members brought up right after the grounding. With statements as "your company went bankrupt, while ours is doing great" in the public, you will definitely agree that you can't have a fair and goal oriented discussion, right? I'm no longer an airline employee (SRT is finally independent now), but I was feeling a bit insulted, as you know as well as I do, that every employee is feeling proud to be a part of his airline (no matter what mess stupd and somehow criminal managers are creating....). So Statements like these were many in that time, and this definitely doesn't provide the grounds to build up a NEW company, as it was intended.......

Cheers, Thomas

Unique · Mon Apr 14, 2003 4:29 pm

Saab2000, I appreciate your as well as many other opinions! That's why we all are here in this forum, right?
I don't really know about flight ops systems, I just know of one example, the ops control system Skytech, which is about to be replaced now.
But to be honest, if the old systems are replaced with the ex-Swissair ones, it seems that the old ones were not as good as the ex-Swissair ones?

Anyway, let's hope for the best, as you said... Big grin

rey777 · Tue Apr 15, 2003 5:03 am

Unfortunately, I think SAAB 2000 is right... My girlfiend, an ex-Crossair F/A still flying for SWISS has told me a lot of these stories.
So sad...

Rey 777

Sabena332 · Tue Apr 15, 2003 5:12 am

Rey, your girlfriend is also working as a F/A? Welcome to the club Smile/happy/getting dizzy

Patrick

ORD Boy 2 · Tue Apr 15, 2003 1:18 pm

i need a gf but back to topic i think they may be trying to block BA from forming an alliance with SWISS and keep it away from oneworld if this is true

Unique · Tue Apr 15, 2003 3:31 pm

ORD Boy 2, BA in fact is blocking the alliance of Swiss and OneWorld! Except BA, all other OneWorld carriers have agreed to welcome Swiss. As it needs all carriers to approve new members, OneWorld is no longer an option for Swiss. Star Alliance, as far as I know, will not accept any more members as it is already too big.

Ciro · Tue Apr 15, 2003 5:18 pm

Talking about the efficiency behind the route-network in a proposed Lufthansa / Swiss merger, I think it makes perfect sense. Geneva and Zurich would be spokes for the mainline operations out of FRA and MUC. The two Swiss cities would also launch regional-jet hubs to cater the O&D business travelers to many European destinations, which would be complemented by a fleet of A-319 Business jets flying to selected destinations in North America, Eastern-Europe and the Middle-East, as Lufthansa is already doing out of Dusseldorf and Munich; not to mention that room for low-cost operators would also be widely available. That would turn the Swiss airline market, probably, one of the most-segmented in the World.

cfalk · Tue Apr 15, 2003 5:46 pm

The Swissair/Crossair merger and rescue package were far too ambitious. They simply delayed the inevitable by not forcing the company to shed much of its inefficient structure.

Why is it, for example, that Swiss is losing money on its ZRH-Mumbai flight? I've taken that flight frequently, and it is always full. The prices on that 7-hour flight are double the prices you can get for a similar flight time to the U.S.. The only reason they can be losing money is inflated overhead.

The Belgians did the right thing with Sabena/DAT. Let the whole thing go down, and start again small, and add planes and routes as you can handle over time.

I am not the kind of person you find protesting in the streets. Actually, I've never done it. But if the Swiss government starts talking about ANOTHER taxpayer-funded rescue of the airline, there certainly will be a first time.

Charles

Mik · Tue Apr 15, 2003 5:58 pm

...is it said many times, and I will repeat, it hurts me
looking what is going on and what happened to Swissair/Crossair/Swiss.
I am not a business pro, but its obvious that Swiss will "crash" like Swissair did.
It cant go on like this! Oh and sure the management will say: "Its the war, its Sars, its the economy that pulled down Swiss..."

And by the way i cant imagine that any company will buy such an airline.

I feel some kind of arrogance, when I read that top of the Swiss management, will "earn" bonus for I dont really know why. I am sorry for all those who work out there for Swiss, it must be painfull looking at how this company will go down again.

Sometimes miracles happen...

Peace

Mik

Unique · Tue Apr 15, 2003 6:17 pm

Full flights does not necessary mean profit! That was exactly the reason why CX closed down ZRH two years ago. Flights were basically full all the time, cargo uplift was around 15 tons in average, but still the sector lost money. Reason: expensive destination HKG plus expensive destination ZRH.

I agree that Swiss cannot really close down ZRH as it's their home base, but the airline should a) fire the top management and b) reduce the regional fleet. Maybe even c) split up into Swiss Intercontinental and Swiss Regional.

gaut · Wed Apr 16, 2003 6:45 am

Unique (or anybody else),

Why BA is blocking the LX membership in the Oneworld Alliance?

PS: I really hope that LX wil not be bought by LH and that they will survive.

Gaut

Thomas_Jaeger · Wed Apr 16, 2003 7:19 am

There are several reasons for BA to block the membership of LX:
1. Swiss has 24 longhaul aircraft, in other words they have more or less the same amount of longhaul aircraft like Finnair, Aer Lingua and Iberia, the two other European members apart from British Airways. But Iberia is mainly using the aircraft on South American routes and they are not competing that directly with BA. Finnair only operates five MD-11s which is acceptable for BA. Aer Lingus also doesn't operate that many longhaul aircraft. However, Swiss would compete against BA on more or less all longhaul routes. So they would loose their monopoly on this routes within oneworld.

2. Most probably authorithies would force BA and Swiss to give back (more) slots at LHR. BA really needs those slots there ...

3. BA has enough problems within the company itself and many other members are also not in the best state, so they obviously prefer to deepen their cooperation for example with AA (new codeshare deal on lots of routes except LON-USA) ...

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