official : Swissair filed for bankruptcy. Sabena next
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Excellent post TW.
But I don't subscribe to your cock up theory I'm afraid.
Surely UBS (whose boss Marcel Ospel is a pal of Moritz Suter Chairman of Crossair) doesn't make "mistakes" like that?
Both UBS and Crossair gain A LOT from SR's demise.....not least in the negotiations with the ex-SR staff they will HAVE to employ to run a long haul operation.....how better to get them to acccept Crossair salaries/conditions than to shaft their employer as painfully, publicly and quickly as possible?
And UBS need to protect their new investment in Crossair by extinguishing SR as soon as possible.
And as you mentioned, the banks have earned 20% profit today on their purchase of the Crossair shares previously owned by SR..........
Nearly forgot......and of course, Suter doesn't think much of SR.....he also needs to get revenge for having been called in to rescue it (managerially) in January this year only to "resign" 6 weeks later.........
[ 03 October 2001: Message edited by: TFR ]
But I don't subscribe to your cock up theory I'm afraid.
Surely UBS (whose boss Marcel Ospel is a pal of Moritz Suter Chairman of Crossair) doesn't make "mistakes" like that?
Both UBS and Crossair gain A LOT from SR's demise.....not least in the negotiations with the ex-SR staff they will HAVE to employ to run a long haul operation.....how better to get them to acccept Crossair salaries/conditions than to shaft their employer as painfully, publicly and quickly as possible?
And UBS need to protect their new investment in Crossair by extinguishing SR as soon as possible.
And as you mentioned, the banks have earned 20% profit today on their purchase of the Crossair shares previously owned by SR..........
Nearly forgot......and of course, Suter doesn't think much of SR.....he also needs to get revenge for having been called in to rescue it (managerially) in January this year only to "resign" 6 weeks later.........
[ 03 October 2001: Message edited by: TFR ]
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Tricky Woo,
Indeed, Mühlemann is ex-McKinsey, the same crowd who encouraged Swissair to go pursue a megalomaniacal expansion strategy, buying up a variety of no-hoper airlines from microeconomies on the way.
If, as you say, Mühlemann is reasonably proficient in reading a balance sheet, then why did his own bank (CS) fire one of its obviously brightest analysts earlier this year? As I have stated before in this forum,
either Mühlemann already knew the true dimensions of his monumental f#ck-up at SAir Group, or he did not.
In the former case, he would have had to stop his own bank (CS) from issuing "buy" recommendations on SAir stock.
In the latter, he should not be on any board.
In either case, he's a w anker.
Thanks for corroborating my case, Tricky Woo.
Indeed, Mühlemann is ex-McKinsey, the same crowd who encouraged Swissair to go pursue a megalomaniacal expansion strategy, buying up a variety of no-hoper airlines from microeconomies on the way.
If, as you say, Mühlemann is reasonably proficient in reading a balance sheet, then why did his own bank (CS) fire one of its obviously brightest analysts earlier this year? As I have stated before in this forum,
either Mühlemann already knew the true dimensions of his monumental f#ck-up at SAir Group, or he did not.
In the former case, he would have had to stop his own bank (CS) from issuing "buy" recommendations on SAir stock.
In the latter, he should not be on any board.
In either case, he's a w anker.
Thanks for corroborating my case, Tricky Woo.
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Hooking Fell,
I've already stated that CS's exposure to Swissair is suspiciously low. My guess is that their exposure six months ago was much, much higher. Under those circumstances, it's normal practice to ensure that the applecart remains upright while slowly and discretely offloading debt and shares.
There's no doubt that CS was broadcasting either a 'hold' or a 'buy', but that doesn't mean that the internal investment departments were responding!
As regards UBS's 'evil plot', I stand by my cock-up theory. The internal processes of these banks are pathetic.
TW
I've already stated that CS's exposure to Swissair is suspiciously low. My guess is that their exposure six months ago was much, much higher. Under those circumstances, it's normal practice to ensure that the applecart remains upright while slowly and discretely offloading debt and shares.
There's no doubt that CS was broadcasting either a 'hold' or a 'buy', but that doesn't mean that the internal investment departments were responding!
As regards UBS's 'evil plot', I stand by my cock-up theory. The internal processes of these banks are pathetic.
TW
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TW:
I'm still trying to digest your "cock-up" theory.
Considering that this is the same crowd who still find nothing wrong with people from Nigeria, Congo and other "busted ass economies" routinely depositing funds in excess of their respective country's GDP, you're observation that this might just be a monumental "stuff up" is rather charitable, to say the least.
I'm surprised they haven't decided to call whatever corporate entity that's eventually going to take to the air again "Bünzli Airlines".
I'm still trying to digest your "cock-up" theory.
Considering that this is the same crowd who still find nothing wrong with people from Nigeria, Congo and other "busted ass economies" routinely depositing funds in excess of their respective country's GDP, you're observation that this might just be a monumental "stuff up" is rather charitable, to say the least.
I'm surprised they haven't decided to call whatever corporate entity that's eventually going to take to the air again "Bünzli Airlines".
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As we slowly resume our flight operations, it gets clearer and clearer that mainly UBS deliberately delayed the payment of the promised money in order to seize our flight operation. This highly accelerated the chances for Crossair to take over our flights as the BAZL promptly handed over our licenses to them. Many fear that this hostile take over was planned on a long-term basis by Mr. Ospel, Mr. Mühlemann and Moritz Suter.
I did one of the last SR flights on the 3rd, coming back from JFK with all SR crews (5) on board. It truly was an odd feeling.
I did one of the last SR flights on the 3rd, coming back from JFK with all SR crews (5) on board. It truly was an odd feeling.
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My dear Arctic Wolf - just to confuse matters, are we talking European billions (ie 1,000,000,000,000) - or the US one (1,000,000,000) - ie a European milliard?
To be fair to SAirGroup, the figures your quote are the gross liabilities - against that they have plenty of assets (especially Flightlease). Even so, I'd suspect their nett debt still has to be into ten figures; especially given the current market for aircraft!
To be fair to SAirGroup, the figures your quote are the gross liabilities - against that they have plenty of assets (especially Flightlease). Even so, I'd suspect their nett debt still has to be into ten figures; especially given the current market for aircraft!
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There are rumors that UBS (United Bandits Switzerland) pulled the trigger in order to collect some additional millions of cash from passengers who never flew on already purchased tickets... nor having a chance of refund.
Makes sence for "UBS"
Makes sence for "UBS"
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The media blurb from Swissair yesterday.
Given some of the comments in this thread - Laugh ? I nearly cried.
So you really want to help - fly Swissair between now and then !
Guv - in those quantities a few zero's more or less, unless they are in front of the decimal point on the severence cheque, who really cares - as dark red as that looks very much like dried blood.
Lobo(or may we call you'Can'?) - can't agree more about the 29th Oct. Hope only that 20+ days get some semblence of semi-clarity and organisation on the line.
Zurich, October 4, 2001 – With a new potential conflict of interests arising following the acquisition by the Credit Suisse Group of a shareholding in Crossair, Lukas Mühlemann, Chairman & CEO of the Credit Suisse Group, announced his intention to resign from the SAirGroup Board of Directors after discussing the matter at the SAirGroup Board meeting of September 30. The Board formally noted Mühlemann’s resignation – which is effective today – when it met today, October 4.
“Now that the Credit Suisse Group has acquired an equity holding in Crossair, I am stepping down from the SAirGroup Board of Directors,” Mühlemann said. “I would like to stress that my resignation in no way diminishes my responsibilities arising from my period of office as an SAirGroup Board member.”
“Now that the Credit Suisse Group has acquired an equity holding in Crossair, I am stepping down from the SAirGroup Board of Directors,” Mühlemann said. “I would like to stress that my resignation in no way diminishes my responsibilities arising from my period of office as an SAirGroup Board member.”
So you really want to help - fly Swissair between now and then !
Guv - in those quantities a few zero's more or less, unless they are in front of the decimal point on the severence cheque, who really cares - as dark red as that looks very much like dried blood.
Lobo(or may we call you'Can'?) - can't agree more about the 29th Oct. Hope only that 20+ days get some semblence of semi-clarity and organisation on the line.
There has been a lot of very intelligent, informed comment on this topic, on this thread. Now, much of the same in this article. Having been through this cycle a couple of times, I feel for all the employees who will be affected by this.
Swissair fiasco was foreseeable
Commentary: Hubris, not attacks, led to grounding
By Paul Erdman, CBS.MarketWatch.com
Last Update: 3:25 PM ET Oct. 5, 2001
SAN FRANCISCO (CBS.MW) -- In one of the biggest corporate fiascos of modern times, Swissair, Switzerland's national airline, which has always been the pride and joy of that country, was forced to ground all its planes on Oct. 2 due to the fact that it was dead broke.
It was already way past due on millions of dollars of fuel that it had bought from oil companies, and now faced the real threat that its planes would be seized as collateral if they landed in London or Paris.
Tens of thousands of passengers were stranded worldwide, and some were finding out that other airlines would no longer honor the tickets that had been issued by the now bankrupt company.
The final straw that broke the back of the airline was the refusal of the Swiss government, which had an emergency meeting, to bail out the airline. The two giant Swiss banks, UBS and Credit Suisse also just sat on their hands and let the airline twist in the wind.
The reason: They had just completed what amounted to a reverse takeover of the only really viable asset of Swissair by buying 70 percent of its subsidiary, the regional airline Crossair, for a mere 258 million Swiss francs.
On Oct. 3, 10,000 Swissair employees -- its total work force is 72,000 -- gathered in protest outside the headquarters of UBS in Zurich claiming that the bankers inside had deliberately engineered this in order to steal their national airline for a song. The bankers told them to take a hike.
The holders of Swissair shares and bonds had already taken a bath in that they now held essentially worthless paper. Swissair has been delisted from the Zurich stock exchange and removed from that exchange's index.
Thousands of Swissair employees lined up in front of the counters of the "house bank" - similar to a credit union -- that Swissair had established for them in a desperate attempt to get their savings out before it was too late. The airline limited withdrawals to a few thousand Swiss francs.
All this goes back to an ill-fated plan that the top management of Swissair -- for the most part "graduates" of McKinsey -- had cooked up, aimed at making that company a major player in Europe by taking financial control of two regional airlines in both France and Germany, as well as a majority interest in Belgium's national airline, Sabena.
All of these investments proved to be fiascos, and the cash that Swissair had to keep pouring into them in order to keep them alive eventually bled Swissair to death. An analyst for Credit Suisse, which was the house banker of Swissair and whose CEO sat on the airline's board, put out a warning about all this already 18 months ago. They fired him the next day.
How many Swissair shares were subsequently stuffed into the accounts of Swiss bank clients remains to be seen. My guess is that the only ones who are going to come out of this making a lot of money are Swiss lawyers.
A plan -- called Phoenix, of course -- to temporarily stave off a complete collapse of the national airline has now been put into place by the Swiss government. It will provide 450 million Swiss francs of liquidity to Crossair/Swissair so that it will have enough cash to pay its employees as well as to buy fuel and food and thus allow the airline to get perhaps half of its planes back in the air.
That money, it is calculated, will run out on Oct. 28. The size and shape of the surviving Crossair will then be decided by its new masters, UBS and Credit Suisse. It will be but a shadow of what Swissair used to be when it was regarded by many to be to Europe what Singapore Airlines is to Asia. Ten thousand Swissair employees will now lose their jobs. Zurich airport is finished as a major transportation hub and thousands more will be out of work there. Tens of thousands of shareholders and bondholders are also left holding an empty bag.
All are victims of hubris -- hubris that was taken to new heights by Swiss managers who are the highest paid in Europe and Swiss bankers who have once again lived up to their reputation as the gnomes of Zurich.
What a pity.
Swissair fiasco was foreseeable
Commentary: Hubris, not attacks, led to grounding
By Paul Erdman, CBS.MarketWatch.com
Last Update: 3:25 PM ET Oct. 5, 2001
SAN FRANCISCO (CBS.MW) -- In one of the biggest corporate fiascos of modern times, Swissair, Switzerland's national airline, which has always been the pride and joy of that country, was forced to ground all its planes on Oct. 2 due to the fact that it was dead broke.
It was already way past due on millions of dollars of fuel that it had bought from oil companies, and now faced the real threat that its planes would be seized as collateral if they landed in London or Paris.
Tens of thousands of passengers were stranded worldwide, and some were finding out that other airlines would no longer honor the tickets that had been issued by the now bankrupt company.
The final straw that broke the back of the airline was the refusal of the Swiss government, which had an emergency meeting, to bail out the airline. The two giant Swiss banks, UBS and Credit Suisse also just sat on their hands and let the airline twist in the wind.
The reason: They had just completed what amounted to a reverse takeover of the only really viable asset of Swissair by buying 70 percent of its subsidiary, the regional airline Crossair, for a mere 258 million Swiss francs.
On Oct. 3, 10,000 Swissair employees -- its total work force is 72,000 -- gathered in protest outside the headquarters of UBS in Zurich claiming that the bankers inside had deliberately engineered this in order to steal their national airline for a song. The bankers told them to take a hike.
The holders of Swissair shares and bonds had already taken a bath in that they now held essentially worthless paper. Swissair has been delisted from the Zurich stock exchange and removed from that exchange's index.
Thousands of Swissair employees lined up in front of the counters of the "house bank" - similar to a credit union -- that Swissair had established for them in a desperate attempt to get their savings out before it was too late. The airline limited withdrawals to a few thousand Swiss francs.
All this goes back to an ill-fated plan that the top management of Swissair -- for the most part "graduates" of McKinsey -- had cooked up, aimed at making that company a major player in Europe by taking financial control of two regional airlines in both France and Germany, as well as a majority interest in Belgium's national airline, Sabena.
All of these investments proved to be fiascos, and the cash that Swissair had to keep pouring into them in order to keep them alive eventually bled Swissair to death. An analyst for Credit Suisse, which was the house banker of Swissair and whose CEO sat on the airline's board, put out a warning about all this already 18 months ago. They fired him the next day.
How many Swissair shares were subsequently stuffed into the accounts of Swiss bank clients remains to be seen. My guess is that the only ones who are going to come out of this making a lot of money are Swiss lawyers.
A plan -- called Phoenix, of course -- to temporarily stave off a complete collapse of the national airline has now been put into place by the Swiss government. It will provide 450 million Swiss francs of liquidity to Crossair/Swissair so that it will have enough cash to pay its employees as well as to buy fuel and food and thus allow the airline to get perhaps half of its planes back in the air.
That money, it is calculated, will run out on Oct. 28. The size and shape of the surviving Crossair will then be decided by its new masters, UBS and Credit Suisse. It will be but a shadow of what Swissair used to be when it was regarded by many to be to Europe what Singapore Airlines is to Asia. Ten thousand Swissair employees will now lose their jobs. Zurich airport is finished as a major transportation hub and thousands more will be out of work there. Tens of thousands of shareholders and bondholders are also left holding an empty bag.
All are victims of hubris -- hubris that was taken to new heights by Swiss managers who are the highest paid in Europe and Swiss bankers who have once again lived up to their reputation as the gnomes of Zurich.
What a pity.
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Good informative stuff,but as I like to keep it simple ,could it be that some of the major players in this debacle were merely a bit thick? Think about it before you follow any "professional" financial advice,especially in Switzerland !
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Please note that the debt Ansett had before going down was about 2 b. Euro, when Lufthansa's pilots took a 20% paycut to save the company in the early 90's was about 5 b Euro, and now Swissair with 10 b Euro. I think it is pretty against the odds they are still flying.
Conspiracy theories.....?
Conspiracy theories.....?
