BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in:  Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Thursday, 28 March, 2002, 18:15 GMT
PR flurry heralds Swissair relaunch
Dismantling a Swissair sign
That old name was about three letters too long
test hello test
By James Arnold
BBC News Online business reporter
line

On Monday morning, a plane lands at Zurich airport heavily loaded with symbolic baggage.

Spot the difference
Old Swissair
Served 210 destinations in 75 countries
138 aircraft
16,000 staff
13.9 million passengers annually
Annual revenue of 5.3bn Swiss francs

New Swiss/Crossair

Serves 126 destinations in 59 countries
128 aircraft
8,900 staff
9.8 million passengers in 2002
3.2bn Swiss francs revenue in 2002

The flight, arriving from Sao Paulo in Brazil, marks the last gasp of Swissair, the airline that went so painfully belly-up last October.

On Easter Sunday, Swissair's successor airline - whimsically branded just "Swiss" - is launched, heralding what its management hope is the full return to health of Switzerland's national carrier.

The new airline draws heavily on Swiss characteristics of quality, reliability and style - and is setting its cap unashamedly at the very top end of the market.

At a time when the airline business is on its uppers, what chance does Swiss have of lasting success?

The same, but different

The new airline owes its existence to a burst of financial trickery last October, when two big Swiss banks plucked the best bits out of the massively indebted Swissair Group, and folded them into short-haul airline Crossair, along with a 2.7bn Swiss franc (1.1bn; $1.6bn) cash injection.

A Swiss Airbus 320
The new - but oddly familiar - Swissair

But while the name and the balance sheet have changed, at first glance the airline has not.

It still serves an ambitious list of long-haul destinations, has barely trimmed its fleet (and indeed has started ordering more planes), and aims to camp in the same classy sector of the market as its predecessor.

Nor has it entirely shrugged itself free of problems.

It may face EU punishment on account of its reliance on state aid, and its immunity from creditors of the old Swissair Group may yet be challenged.

Although staff have agreed to work for reduced wages to get the carrier off the ground, the airline has yet to agree a deal with notoriously stroppy pilots.

Edgy relations with its European rivals could derail Swiss' plans to join the high-profile Oneworld alliance - although the airline last week agreed a bilateral deal with American Airlines - and another cross-border row is threatening ambitions to build up Zurich as a regional hub.

Those left behind

Old colleagues at Swissair Group are determined to spoil the party, too.

A Swiss lounge
In the new Swiss, design rules
Earlier in March, they launched a legal challenge to the new airline's rights to the Swiss brand name, arguing that it was theirs and worth some $400m.

Crossair has managed to fend off that complaint, but is still in something of a legal limbo.

Its eventual plan is to rename the entire group "Swiss Air Lines", but is still desperately touchy about anything that links it with the shambolic failure of the group in October.

Company executives use careful locutions such as "the new Swiss national airline".

Vaulting ambitions

Woes notwithstanding, Crossair reckons on reviving a significant chunk of Swissair's business this year.

Tyler Brule's 10-point plan
Keeping the Swissair name
Being more Swiss
Focussing on luxury
Boosting Zurich airport
Offering "air-taxis"
Linking to the train system
Offering added-value services
Launching a "sexy" timetable
Offering round-the-world flights
Building a corporate culture
"We need to built up awareness of our business slowly," admits Richard Castle, Swiss' UK general manager.

"We anticipated some adverse reaction after the disruptions in October, but we've been pleasantly surprised by how ticket sales have gone already."

Swiss aims to carry almost 10 million passengers this year alone, losing some 1.1bn francs, before turning a profit some time in 2003.

Brand new

The airline's secret weapon, it feels, is its branding - something carried out with almost obsessive attention to detail.

Far from attempting to distance itself from the logo, name and image of failed Swissair, the new carrier has almost replicated its predecessor's style.

Tyler Brule
Mr Brule has sprinkled fairy dust all over Swissair
Last year, it hired Tyler Brule - founder of the high-concept interior design magazine Wallpaper - to create the brand profile.

In an article in a Swiss newspaper last year, Mr Brule laid out his manifesto, which included such ambitious quirks as relaunching luxury round-the-world flights, and installing special cabin lighting that makes passengers look sexier.

"It's high time to bring a little glamour back into the airline business," he gushed.

Coming home

According to Mr Castle, the branding exercise simply aims to draw Swiss back to its roots.

"We have unashamedly linked the airline to what we believe are the better qualities of Switzerland - attention to detail, reliability, punctuality and so on," he says.

Switzerland
Swiss by name, determinedly Swiss by nature
Maybe so, but it also veers occasionally towards the pretentious.

Arjen Pen, Swiss' vice president responsible for marketing, has publicly compared the former Swissair to Vittel mineral water, "noble and still".

The new Crossair, he said, "is the Perrier - a sparkling water with a dash of lemon, two cultures, but drawing together the best of both worlds for its passengers."

Doing the opposite

Difficult as it is to stomach, this sort of thing could just work.

At a time when every airline is trying to turn itself into another budget Ryanair, dashing upmarket has a certain contrarian appeal.

Swiss staff
Nicer uniforms for the few remaining staff

"The Swiss have a desire for quality, which other Europeans may not have," says Mr Castle.

"If any country can support an airline with a stress on quality, then that country is Switzerland."

The concept of national carriers, wheezing along more for reasons of patriotic pride than economic sense, has been knocked out of shape by the events of last year.

If Swiss can tap into the small but lucrative luxury market, however, it can achieve a reach beyond the apparent scale of its modest home market - the same sort of achievement pulled off by Singapore Airlines or Emirates.

Who needs luxury?

The next few months will demonstrate whether the world can handle another luxury airline.

"It's not as though Europe has any shortage of premium-rate offerings," says Alexander Campbell of trade magazine Flight International.

Andre Dose
Can Mr Dose avoid the temptation to splurge?
But the real strength of Crossair is not really its ephemeral branding, but its cash in the bank.

Thanks to its deep-pocketed bank backers, it has now become the most financially sound airline in Europe, free of debt and capable of breaking losses for more than twice as long as it currently forecasts.

Its management, culled brutally after last October's collapse and now headed by the well-respected Andre Dose, is seen as sound.

More to the point, what brought down Swissair was not its core airline business, but the fact that it splurged on minority stakes in failing airlines in the vain hope of turning them around.

If Mr Dose can just keep control of the purse-strings, his new venture seems to have a fighting chance of taking off.

See also:

31 Jan 02 | Europe
New Swissair to be simply 'swiss'
22 Oct 01 | Business
State saves Swissair
16 Oct 01 | Business
Companies back Swissair rescue bid
11 Oct 01 | Business
Question marks over Swissair rescue
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories