The liquidator of failed national airline Swissair, Karl Wüthrich, says the company could have survived if management had taken the right action.This content was published on January 15, 2006 - 16:32
Wüthrich argues that Swissair's last CEO, Mario Corti, made a number of strategic errors in the days and weeks before the carrier's demise.
In an interview with the SonntagsZeitung newspaper, the liquidator said that the Swissair group lost its way when it became part of the larger SAirGroup holding.
"It tried to grow too fast, taking out loans to boost its development," he said. "It made the mistake of looking for funding from sources other than its shareholders."
Wüthrich, who was speaking ahead of the premiere of a film about the airline's collapse, believes the human factor also played a decisive role in Swissair's downfall.
"The rules of corporate governance were not respected," he said. "The checks and controls that were being carried out were not sufficiently independent."
According to the liquidator, Corti's predecessor, Philippe Bruggisser, was a man who would not accept being challenged by anyone.
But Wüthrich said that Swissair's demise was not inevitable and could have been avoided with better preparation. He added that a worst-case scenario had never been envisaged, and that Corti always believed the government would step in and save the company from going belly-up.
Corti asked the federal authorities for support in September 2001, just weeks before all flights were grounded on October 2.
The problem, said Wüthrich, was that the man who was hired to save the airline did not have an emergency contingency plan.
The liquidator rejected claims by Corti that Switzerland's largest bank, UBS, was responsible for the grounding. The former Nestlé finance chief had blamed the bank for not putting up the funds needed to keep the airline flying when it came to the crunch.
Wüthrich believes Swissair management missed earlier opportunities to sort out the financial problems. He said the airline even had liquidity on the day all flights were grounded.
Four bankruptcy procedures are currently underway, including one for SAirGroup and another for Swissair itself. The liquidator told the Berner Zeitung on Saturday that it could take another two to three years to wrap up these procedures.
SAirGroup's creditors alone, who are owed SFr15 billion ($11.75 billion), can expect to get back a maximum of 16 per cent of the total.
Wüthrich revealed that he is preparing more lawsuits against the company's former administrators and directors.
Last March, he filed lawsuits against Bruggisser and the former finance chief, Georges Schorderet.
He is also suing ex-board members, among them Thomas Schmidheiny and Lukas Mühlemann, as well as Corti, who replaced Bruggisser in March 2001 when the extent of Swissair's financial problems became known.
The next round of lawsuits that should get underway in the coming months will concern around 25 people, according to Wüthrich.
He declined to mention any names, saying only that the lawsuits would be dealt with in writing.
He added that the sentencing could be spectacular if the courts get to handle the cases.
Part of Swissair's flight business was taken over by Swiss International Airlines in 2002.
This new airline was itself purchased by Germany's Lufthansa last year. The company still operates as an independent brand.
swissinfo with agencies
Bankruptcy procedures underway for Swissair:
SAirGroup: approximately SFr15 billion.
Swissair: SFr5-10 billion.
SAirLines: SFr1-5 billion.
Flightlease: SFr5 billion at most.
The film "Grounding - the last days of Swissair" is a fictional account of the airline's demise.
It opens this week in Swiss cinemas.
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