The airline industry is still digesting the surprise resignation of Jeffrey Katz, the president and chief executive officer of Swissair.

Mr Katz is leaving the company after three and a half years to return to the United States where he is expected to take up a new career in the e-business sector.

His resignation took analysts unawares, but Katz said that while it had been a privilege to lead Swissair, he now felt it was time for a change.

It's thought that the chance to return to the United States where he'd previously held a senior position with American airlines also played a major part in his decision.

Katz held the Swissair job during one of the most difficult periods of the company's history, analysts say.
"I would say he did quite a good job in a very difficult environment with high fuel prices and over-capacity in the industry," says Zurcher Kantonal Bank analyst, Patrick Schwendimann.

The high price of fuel bit into profit margins and caused unease among investors.

Swissair's parent company, Sair, also played tribute to Katz for his response to the 1998 crash of a Swissair MD-11 off the coast of Canada with the loss of more than 200 lives.

"He was a great support in Swissair's most difficult hours," said SAir's chief executive, Philippe Bruggisser.

But the biggest commercial challenge facing Katz and his successor is how to respond to the rapidly consolidating sector. Swissair has recently taken a majority stake in the Belgian airline, Sabena, and the two companies are eventually expected to merge.

But that alone won't be enough to survive. "I think it's possible that in the long-run, Swissair will join a major global alliance," says Schwendimann. "Most likely One World with American Airlines and British Airways."

In the short-term, Philippe Bruggisser will take over responsibility for running the airline but the race to succeed Katz is bound to attract a large field of candidates.

by Michael Hollingdale

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