Why Did Swissair Go Bankrupt?


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Christopher Adam Profile
Swissair, once considered one of the world's most efficient airlines, filed for bankruptcy in October 2001 and grounded its entire fleet following the announcement. Swissair's top managers and executives argued that the terrorist attacks of September 11, 2001, caused a major dent in the Swiss air carrier's profits and pointed to this as the primary reason behind the airline's demise.

While the attacks of 9/11 certainly did cause major losses for the worldwide airline industry--and sent major carriers like Sabena into bankruptcy--journalists, commentators and industry specialists have all pointed to other reasons for Swissair's collapse and often asserted that the company's executives were to blame.

Most observers point to Swissair's so-called "Hunter Strategy" during the 1990s. For years, the airline spent a large amount of money purchasing shares in other airlines, including Poland's LOT, Turkish Airlines and TAP Portugal. Swissair's strategy proved much too costly and resulted in major solvency problems in 2001. Some observers speculate that Swissair would have been able to survive the slump following 9/11 had it been in better fiscal shape at the time.

Swissair's former executives a presently on trial in the Swiss town of Buellach, on mismanagement charges.

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