Swissair may be down yet again..

[N380UA]

With the Swiss government and industries coughing up the financial support to keep Swissair going for the winter flight plan, and for the of launching Crossair Plus, a small but very important detail has apparently been forgotten. All those companies within the Sairgroup, like Atraxis, SairTechnik or Swissport are running out of cash. Should these support agencies not receive some 100m CHF with a very short time (2-3 days) Swissair will face another grounding…all carriers at Zurich as a matter of fact as the airport would have to close.

[The Guvnor]

Why do you say that ZRH would have to close? It's not owned by SR in any way, shape or form - sure, they're the largest user but if there's a genuine market there other airlines will fill it pronto!

This from today's ATWOnline:

Swissair has funding at least through the weekend
Dateline: Thursday November 01, 2001

Struggling Swissair received a renewed lease on life Wednesday at least until the weekend.

Switzerland's cabinet declared there were still sufficient state funds to keep the airline flying that long remaining from the Sfr450 million ($276.6 million) bailout that kept it aloft through Oct. 28, when its short-/medium- range network was absorbed partially by Crossair.

The move allows slim leeway to tackle urgent liquidity problems at key Swissair Group subsidiaries Atraxis and SR Technics, without which the company's entire rescue package could be jeopardized, according to Swiss Treasurer Peter Siegenthaler. British interests reportedly have lined up to acquire profitable global airport handling unit Swissport.

Siegenthaler had set a Wednesday deadline for a solution to the cash crunch. That was extended at the request of Canton Zurich, which is coordinating the Swissair salvage operation and pleaded for more time. The government said the Sfr50 million first installment of a pledged Sfr1.1 billion credit line was to be transferred soon to allow Swissair to continue serving a curtailed long-haul network until that reverts to Crossair April 1.

Siegenthaler said earlier that Atraxis would be short Sfr35-Sfr50 million by mid-Nov. while SR Technics--deemed crucial by Crossair for its future operations--needs Sfr100 million by mid-Jan. to stay in business. Release of state funds to keep Swissair operating during its transition to Crossair was subject to a solution of those shortfalls, he added.

[ 01 November 2001: Message edited by: The Guvnor ]

[Mishandled]

I think that you might find that, without Atraxis IT systems, it would be very difficult for Unique Airport to operate, The standard DCS system is axsControl, the flight information system is axsGroundinfo, both of which are Atraxis products. Obviously manual systems could be used but, this would be extremely difficult.

[N380UA]

Mishandled

....in addition, without swissport there will be no ground handling i.e. ground agents, check-in, **** suckers, baggage guys etc..
....without the tec guys there will be no line maintenance, no de-icing, no GPU's.

Seems like those flights in at such time would be trapped in Zurich..... enjoying the beautiful city.

[Hooking Fell]

Let's just say that there might be a few people waking up to the fact that for the money pumped into "New SR" to date by both the Swiss government and businesses, they could have bought up BA lock, stock and barrel.
Now that all these auxiliaries are starting to cry out for cash, the whole exercise looks like just another bottomless pit waiting for large amounts of taxpayer money to be sunk into.
:confused:

[thewwIIace]

what exactly is happenning to the non european nationals working for crossair on the saabs. surely, with job losses etc, the swiss need to look after their own instead of employing people from outside europe let alone switzerland

[Saab 2000 Driver]

Accoding Swiss TV Text a solution is is the making by talking to potential buyers.

[Mishandled]

Hooking Fell, speaking as an employee of one of these auxiliary companies that is apparently a "bottomless pit", and living in a region that would be devastated if we all went bust I thank you for your support....not. FYI Atraxis is a profitable company, that was contributing a good amount to the Swissair Group. :(

[YakYak]

Hello Hooking, been a while since we were all invigorated by your tiresomely familiar negative attitude....glad I'm not married to you.

SR is D.E.A.D. dead. Like to Dodo, the Dinosaur, and your once youthfull exuberance. The new company you refer to is, of course, Crossair. You're to be commended on one factual accuracy, however. Crossair does indeed now possess a market capitalisation big enough to completely purchase BA, AA, UA and in fact most other major players on the world stage, but why would they want to?

Yours "bottomless pit" analogy is, quite simply, at variance with the facts.

There's a saying that goes something like "sell on the trumpets and buy on the cannons", and thats exactly whats being done. Some of the most schrewd aircraft leasing contracts in the history of the business are now being signed in favour of Crossair's new fleet of larger aircraft. The result will be cost leadership that would make BA, AA, UA and the rest, wince with envy.

Atraxis and SR Technics (CrossairTechnic) are both excellent businesses with world-class reputations. It is a known fact that the Crossair CEO is actively seeking control over these non-core but airline related businesses. Their aquisition will make perfect synthesis with the new Crossair, and set a solid framework upon which to restore Switzerland in general, and Zurich in particular, to pride of place in European air transport.

[ 01 November 2001: Message edited by: YakYak ]

[Hooking Fell]

Mishandled:

If Atraxis is indeed a booming business, it won't be hard to find a buyer for it. However, I believe LH have been looking at Atraxis for over three months (i.e. since before 9/11) and haven't made up their minds, let alone carried out any due diligence.

Alas, you missed my point. Why sink taxpayer funds into what is essentially a new airline with a very uncertain future when you could buy a large carrier on the stock exchange for the same money? This whole "New SR" is pure political opportunism and expediency - the mere fact that the cash flow situation of SR subsidiaries has been conveniently forgotten in the process would serve to underpin my view.

As they say in Switzerland: der Wirtschaft die Gewinne - dem Staat die Verluste.....

[ 01 November 2001: Message edited by: Hooking Fell ]

[pdashley]

Hooking Fell

The situation between LH and Atraxis pre 11th Sept was that they were discussing a merger, with the new company to be 50% owned by the Swissair Group and 50% by Lufhansa. Sadly after the events post 11th September with the Swissair Group going bust things changed.

The new game was to sell Atraxis as a going concern. The likely investors were:
EDS, IBM, Amadeus, Galileo and Lufhansa Systems. Although I can't see why Amadeus would want to buy Atraxis as they only recently purchased the BA res&DCS systems.

Hot off the press in the last few minutes is that Lufhansa Systems has agreed to buy Atraxis, I don't know in what form or what they intend to do with it, but if true it seems the future of Atraxis is secured for now. Although the announced layoffs at Atraxis (I am one) will still go ahead.

[N380UA]

So the Swiss government buys BA or AA or UA....than what?
Can't run it out of Zurich, as these are national carriers of other countries.
As for buying any member of the Swissair group, which is chapter 11, it poses one particular problem they don't belong to Swissair anymore. If you have nil - you sell nil!! Although LH is interested in Atraxis and might even want to buy it out, they stand no legal grounds to do so.

[pdashley]

N380UA

Atraxis isn't in bankrupcy protection (unlike) Swissair so could be sold to anyone.

[N380UA]

Pash
Sorry to say but Atraxis is part of the Sairgroup and therefore can no longer be sold by the group. It is now up to the consolidation administrator to evaluate and sell of what he can to turn out the most cash benefit for all the creditor. Individual needs and concerns are as such not respected and by all the goodwill, effort and drive by Atraxis, its CEO has only limited capability to act in this matter.

[pdashley]

N380UA

Point taken, but wouldn't it be better all round if the administrator sold Atraxis as a going concern rather that let if go bankrupt and if LH systems have come in with a half decent offer, then at least that would safeguard to some extent the futures of the other airlines hosted on axsRes, namely SAA, TAP and LOT amongst others?.

[Epsom Hold 2]

Contributing nothing to the thread by saying this but I still find it astonishing that an airline with such a solid O&D business market and strong image could end up like this. Same with Ansett, they made a profit year in year out for decades and until 1998 as half of a cosy duopoly with TN/QF, the softest airline market in the world by far. Now they don't even exist. Sabena haven't made a profit since 1959 so I never had high hopes for them; and there are plenty of cumbersome flag carriers wobbling badly who've never been well-loved or cared for by their owner-gov'ts (Olympic, Iberia, Alitalia). A few biggish names were bound to disappear. But how did SWISSAIR and ANSETT, of all airlines, end up writing themselves off, and so quickly. Incredible.

[Hooking Fell]

N380UA:

The whole point is that you would have spent your US$2.5 bn on an established long-haul network with a hub (in the case of our example BA that would be LHR) at which slots come at a premium. From a Swiss point of view, you’d also have a well established commuter/regional carrier in the form of LX which, if necessary, could fly the odd long-haul route that makes economic sense out of ZRH/GVA or BSL (maybe NYC, HKG).
Europe is overcatered to in terms of air traffic. The place is full of micro and mini hubs, all within 30 to 90 minutes of each other. That would not work in the US, and it is becoming increasingly visible that it doesn’t work in Europe either.

[Hooking Fell]

Epsom Hold 2:

Just saw your message after I’d posted my response to N380UA.

With Ansett, they went off the rails completely in the run up to Sydney 2000, spending more than A$50 million on Olympic sponsorship. Keep in mind, they were a predominantly domestic airline – so they could not expect to attract any significant international traffic as a result of that exercise. The second marketing blunder was to install – of all things – syringe disposal facilities in their aircraft and lounge toilets. Now: who – apart from drug dealers – would ever hope to make a buck out of drug addicts?

[Cisco Kid]

Would it be reasonable to assume that as LX want the proposed 26/26 SR, solution like a hole in the head,they will try to eliminate the very good businesses which you allude to? They have been caught ón the Hop´as without a viable ex Swissair & ZRH airport these companies are not nearly so interesting to a potential buyer; the scale of the whole business is just beyond the scope of Crossair, & they know it ,just watch ém squirm. Good luck to all involved, & YY. these amazing "low cost leases" are merely normal prices ,unlike the distorted sums charged by flightlease to the parent airline SR since profit centres were established within the SR. group; a bad mistake by our ex managers,(or any managers)at least I agree that "normal" leasing costs should help a new venture, I only hope you don´t get sold down the river with cheap promises,watch your back! the battle is political.

[Cisco Kid]

Good News, Atraxis has been bought by a proper company EDS,it´s now out of the hands of Crossair aka. Lufthansa,the screws are tightening... more sleepless nights in Basel!!! at least the liquidation administrator is acting ethically & most of the( very good employees) will keep their jobs,& a social plan too! well done the CEO.All we need now is for foreign investors to revamp the old SR,+technics & ground handling & we are in business;The LX "business Plan" is a sham & we all know it ..the worm is turning...Cartels & Filz ´s days are numbered, will the government react..? remove the blinkers.

[N380UA]

Hooking Fell

I'd have to concur with you on that point. We have too many hubs too much traffic and not enough room to fit it all in. As of recently, it seemed as though the industry would govern itself by producing a few selected main carriers and a few feeders per continent.
Now we have seen Swissair gone, Ansett gone, as I have heard Sabena gone (again), but also others, at their time major carriers such as Pan Am, Eastern TWA. We'd all agree, there will be a consolidation on carriers but by no means are their constellations fixed, so for an airline its always worth a fight to rise above its current status. Having said that, I'm not defending Swissair at all in fact its employees are demanding another 200 Mil. CHF by this Wednesday or they go on strike (personally I start to get fed up with this company!) Some do say that the folks working at SR are a bunch of spoiled brats, arrogant bastards. Sooner or later I will go along with this notion.