Not with Unions.Then/ Extant not a large pool of customers,coupled with out of control increasing costs.can only subsidize entities losing money for so long.
I remember flying Swissair in economy class. We had leather seats and the meal consisted of a plate of dry Grisons beef fillet, which is very expensive. It was a flight from Paris to Zurich. I complimented the steward about this unexpected high standard. His proud answer was that it was normal Swissair standard. The week after, Swissair went bankrupt…
SR 111 had relatively little to do with the failure. It was the result of excessive debt incurred by the CEO of the group, who ran up about CHF 5,000.000.000 of debt the board of directions was not aware; the 9-11 disaster with SR losing USD $ 17M per day,; the entrance of the new Euro in surrounding countries, versus a strong CHF; and the accumulation of Sabena and other airline shares that ultimately doomed the finest airline the world had ever known, bar none! @@ilovesuisse1
I worked for a company that was Mckinsey'd back in the late 80's and took about a decade to recover. When I first heard the name mentioned in this video it was an "aha, I now get it" moment. I flew Swissair a number of times in the 80's and 90's and always thought they were excellent.
Yeah, they did spin off that "Hunter strategy" to Swissair stupid ass executive named Bruggisser and he was foolish enough to buy it. All the remaining board people were honorary people with no aviation background whatsoever and did sleep the board meeting out and just collecting their attending board fees. Management issue all over.
Unfortunately, it wasn't McKinsey alone. The whole Swissair debacle is a prime example of a class of "business elites" sitting on inherited laurels and thinking that their mere existence would pay for itself.
One saying about McKinsey was that they would go into a company and tell them to decentralised everything that was centralised and vice versa. Then in 2 years go back and repeat the process in reverse. A nice permanent income stream! Sadly my one experience of Swissair shortly before their demise was less good, the only airline I've ever known to lose hold baggage on a point-to-point flight. Apparently the ground staff at Basle had forgotten to unload one compartment completely, so there were a dozen or so upset passengers milling around. But by then the plane was apparently on its way back to London. We got our bags next day. Not what I expected of Swiss efficiency.
When a company 'outsources its decision making to McKinsey' (or another consulting firm) they deserve what they get. In such cases, there was usually an ex-McKinsey board member to do the advocacy from the inside. It would be interesting to have an audit of the financial interests of McKinsey in the multiple transactions they recommended, unopposed by the passive Swiss Air board.
I was thinking exactly the same. McKinsey and all the other big consulting outfits get paid their fees whatever happens. Their influence on commercial entities and governments is malign. They give management (and government) an excuse not to develop their own expertise and real ability to manage. I wonder how many really successful businesses outsource such decision making.
@@rivaterrier I worked for a school system that hired and paid very well administrators who were supposed to make policies and decisions to make the district top notch at educating children. Almost all these highly educated and expensive people promptly farmed out at great expense the policies and decisions they were supposed to make to outside consulting firms. If the policies and decisions turned out to be wrong and detrimental (as they often were) the administrators then could blame the consultants for the failure. So much money was wasted doing this.
McKinsey and these other "consulting" firms have to make themselves relevant to these boards that are paying them handsomely. How would it go over if the consulting firm came back and said, "do nothing different, your on the right path to success"? How long do you think that board would keep them on retainer if they realized that they were already making the right decisions and were doing well? Why keep paying this consulting firm if their advice is to do nothing different than you would otherwise? So of course a "consulting" firm is going to make one suggestion and recommendation after another to keep themselves on the dole. Plus it always helps when you have a senior board remember on the inside, or you got your fingers in the other companies your recommending to purchase or make deals with.. Or like others said, if they make the wrong choice, the board members get to blame the consulting firm and walk away from responsibility by both parties. How many of the SwissAir board member stayed on with Swiss or found another company to pay them and not suffer any consequences for their actions?
Also wondering about that, and how many in McKinsey made a killing on Sabena shares! For access to the Belgium hub, and only a 49% non-controlling share, loss-making Sabena should've paid Swiss Air those millions instead of the other way around!
Most companies fail when they farm their strategic decisions to outside firms that know nothing about their business and the peculiarities of their company. This is doubly baffling when successful companies do it. I worked for a tech company that became the leader in their business. In 1998, they brought in BCG to consult. They went on interviewing all executive & middle management for months, and produced a most comical competency layout - they understood nothing. Yet the board kept going. The company went from $1.3B/year with no debt, to $650M and tons of debt within ~6 years mostly for failed acquisitions. Almost killed their golden goose chasing after unrealistic dreams. Luckily for them, their golden goose didn't die, and they greatly recovered. But even with all their acquisitions, they still haven't reached 1.3B yet.
Part of the expansion aggression made during the 90’s was the retrofitting of brand new in-flight entertainment systems for older fleets to attract new customers. The decision which ultimately brought down Swissair Flight 111 when the sketchy wiring circuit caught on fire.
@@ursodermatt8809 it was all the MD11s repainted in the eurowhite livery. One MD11 had the system in all 3 classes (a single picture exists online - in economy the screens were incorporated into a secondary panel attached to the tray table) and the rest had it in First & business only. I'm not sure if the 747s got the system too when they went eurowhite
Knew about the crash. Never knew it was in some sort of reaction to the struggle to survive in a competitive market. Too bad the passengers became part of the damage of turbulent market maneuvering.
@@JosipRadnik1 I agree. I don't think McKinsey would sink to a detail like "upgrade in flight entertainment". But some conditions led to hiring McKinsey. My bank employer worked with them eons ago. Upshot was the bank was bought by a expanding bank. And down the line, there was a massive management problem. McKinsey? No. But their presence is like when ambulances come. They are a rescue operation.
If you don’t know how to push back against consultants that have no legal or financial leverage to compel you to obey them, then you weren’t fit to run a company in the first place.
@@paulyoung7551There has to be a McKinsey connection to 111. That is the only possible explanation for using a Las Vegas based company to install an in flight entertainment system in the aircraft. Vegas doesn't even have a maintenance hanger today. At the time of 111, the Vegas airport was nearly irrelevant by any metric. The only importance the Vegas area had for aviation was that the fan disc that failed on United 232 (Sioux City) was forged in Henderson. Why Swiss Air chose a company no other airline had heard of to supply the IFE system had to be connected to McKinsey.
@@hewhohasnoidentity4377 Sounds like the lowest bidder to me. I somehow doubt the Swiss actually knew where exactly they had sent the planes off to get the new systems installed, they just knew the board was adviced by McKinsey to send them there.
@paulyoung7551 he recommended that older be planes be sent to equip with new entertainment systems, and the same old wiring were used to cut cost on implementation. The wires which would catch fire on flight 111.
15:50 - That's Captain Urs Zimmermann who was Captain of the ill fated Swissair Flight 111 which crashed in Nova Scotia, Canada after an in-flight fire.
@@walternerd3147 He was type rated on the A320 family the mid 1990's and then moved onto the MD-11 in 1997. You can find all this information on the final report of the accident.
In 2000 my parents visited Europe, booking a SwissAir flight. When they arrived at the airport there was no sign of SwissAir staff, and it took a while for them to figure out that the flight was cancelled, and to make alternative arrangements. This was very much the opposite of what one would expect from SwissAir. But when SwissAir disappeared the next year, we weren't very surprised.
Sadly my one experience of Swissair shortly before their demise was similar, the only airline I've ever known to lose hold baggage on a point-to-point flight. Apparently the ground staff at Basle had forgotten to unload one compartment completely, so there were a dozen or so upset passengers milling around. But by then the plane was apparently on its way back to London. We got our bags next day. Not what I expected of Swiss efficiency.
@@iankemp1131I flew almost three decades as cabin crew, within don’t know how many flights as a passenger, but somewhere in the upper hundreds or thousands. It did happen, that your checked luggage did not arrive at the destination. Lost and Found report and the suitcase was geleitetes next day or days. It really isn’t a big deal. Expect the Unexpected.
@@wakeupcall2665 well yes, we all know that glitches can happen and I've had luggage delayed on a couple of occasions when connecting flights were late and there wasn't time to transfer it, that's fully understandable. But this is the only time I've seen a substantial number of people left simultaneously without luggage on a simple point-to-point flight on any airline because they forgot to unload a complete compartment. Mercifully very rare, as it should be.
@@ristokempasSwitzerland is not a shifty country, i find that comment offensive. I don’t know anyone who worships “Moscovia”. That’s a daft comment, considering how many thousands of Ukranian refugees we have here. I love my beautiful country, plenty of people love visiting here. Maybe you should look at your own country, maybe your country is not so perfect like you think. Saying you are a European from a wealthy country sounds snobbish, full of self importance.
Started with Crossair in late 1999 on the Saab 340 before quickly moving to E145. Was in Alicante when the Swissair collapsed having just arrived from Geneva. Swiss first officer nearly fainted with shock. Crossair expanded to become Swiss but I got chopped in the significant redundancies.. The only remnant of Crossair now is Swiss’ LX flight destination.
I flew Swissair many times in the late 80’s, including holidays with my family. They were superb. Then they seemed to just give up and became hopeless and I never used them again. Frankly, I really do not understand why anyone now flies out of choice. The golden days are truly over.
Swissair's Qualiflyer group always seemed like a 90s version of Etihad Partners That being the group members didn't help Swissair/Etihad, just bogged them down
You can turn it also the other way round. When Etihad started to buy shares in crappy airlines, here in Switzerland many people said things like "oh look, they do a Swissair" or "ah, that's where all the former Swissair managers have ended up...".
This was a traumic thing in switzerland, the fact that the germabs came and bought what was left was the cherry on top. There is even a swiss movie about it.
Without the Germans picking up what the incompetent Swiss destroyed, Switzerland wouldn't have an airline anymore at all. And the movie is probably the biggest joke of them all, painting Swissair's Management who ran the company into the ground as the victims. Complete hogwash.
I worked in the industry during this period, and it seemed that every few days there was a reiteration of the ability of Swissair to create a head-shaking moment.
I flew SwissAir in July 2001 returning on a A330. It was a good flight, even in economy. Flew into Newark New Jersey, you could see from the tip of Manhattan with the Statue of Liberty and of course the Twin Towers upon landing; it all changed in a matter of months after that. I had no clue how close they were to going bankrupt. I haven't had the chance to fly Swiss since then. Somehow always ending up on United through Chicago to Zurich since then. Fascinating story, well presented.
Last month I flew from Zurich to Newark with Swiss and I can comfortably say that you are not missing much. United experience is so much better and that should say a lot.
Who would have guessed, outsourced consultants getting it wrong. I've "never" experienced that. A friend had his whole dept outsourced to save money, now costs the company 3 times more than it did before.
Excellent vid. If McKinsey was so certain of their advice, they should have been made to invest in the airline. The same could be said for any consulting company who advise organisations. Skin in the game is required, otherwise it’s just management being lazy which deserves to fail.
Ever notice who hires consultants? Men. And not simply because the majority of corporate leaders are men. Why? Consulting for many industries is little more than hiring a team to regularly jerk off the clients. Thus the more they play to the client egos and hubris, the better. And remember this rule of consulting - “We don’t actually DO anything we propose, we just propose it”.
Well some executive women in charges are also quite bad. See Anne Lauvergon at the head of the french atom company who nearly drove it to bankrupcy because she agreeed to overpay billions for the acquisition of an african company that was pretending to have uranium mineral stock which they didn't have 10% of what they pretented.@@kcindc5539
@@kcindc5539 What the hell are you talking about? "Ever notice who likes to eat hamburgers? Precisely. Men! And who was a man? Hitler! Therefore..." That is how that reads. I can make up a "rule" too if you'd like. I don't think the consultants in this case were fluffing the airline. They just made bad recommendations. A LACK of ego could be argued to be the problem here as it seems the Swissair higher ups were very passive.
One thing I have always liked about Swissair/Swiss is the white cross on the tail. That's one detail that speaks for itself. After making such bad business decisions for years, I hope LX will finally be successful. Interesting subject, you should make episodes of other airlines that have had struggles and are also fighting to stay up. Good job.
I very clearly remember my first trip to Switzerland in 1995 (as a teenager) with a Swissair flight from LHR to Zurich on a brand new Airbus A321. It seemed very high quality and I was most impressed by their luggage delivery service to your hotel and the fact that the train station was right under the terminal. So slick. Shame it all fell apart.
The train station hasn't moved 😉 Having a train station right under the terminal isn't unique, though I can't think of there being one in any UK airport.
@@sheevone4359 Stansted does, but it's a terminus and far away from London. Gatwick almost does (it's next to it). Heathrow Terminal 5 does, but that's a terminus too and wasn't built at that time. We don't have any through stations under airport terminals that are that close to a major city.
One of the nicest flights I have ever had was returning from Zurich to Heathrow about 2. pm. Blue Skies sunny, turned up at the Airport just 30 minutes before take off, Check In said stay calm. Luggage was taken from me by Swiss staff who said DON'T RUSH, your aircraft is through those doors and immediately on your right BUT Duty Free is opposite, you have time. Even on such a short flight, nice food and drink, impeccable service and I thought "Swiss have got this sorted". How wrong I was but thanks for explaining why I was wrong.
Management consultants are expensive and I have not heard of any of their successes. In fact they drop in, make several suggestions, which unfortunately the management agree too. Fini.
Unfortunately companies still spend millions on consults to cut costs and usually get rid of the people that hold the company together but their job title / description may not actually Match what they do.
I hope you don't take this the wrong way, but I always feel satisfyingly exhausted after your videos. Your style is just right for these stories. Great vid as always!
A week after 9/11 I flew London St Louis with TWA . Three weeks later returned on the same route again with TWA . On outward the aircraft was less the half full , on the return less then ten in cattle class , passengers outnumbered the cabin staff . Shortly after the airline collapsed . The number of airlines that have folded is quite incredible , does the industry have a self destruct button , mergers that only benefit one side . Corruption ? McKinley was under investigation for insider trading.
6 months after 9/11 I flew on an American Airlines flight from St. Louis to Kahului, Maui, and it was so surreal since it was on ex-TWA metal (one of their 767-300s in their final livery), full TWA interior, and paint. Almost forgot I was actually on American Airlines at one point... maybe I am just dopey sometimes. 😂
Very impressed with your level of detail in bad management decisions. Acquiring loss making airlines, never a favorable strategy and outcome of profitability. Basic business and common sense approach.
I think as well Swissair 111 also caused problems as well with the entertainment systems which not only saw the death throes for Swissair but also for the MD11
The MD11 didn't have a chance. The reputation of the DC10 was so bad nobody trusted it. The ETOPS rules changed to make twin engine operations remove the need for a third engine. Then the fuel consumption was not as good as was promised, causing Singapore to cancel their order. Finally, the 777 entered service and made the MD11 obsolete. 111 didn't kill the MD11. The MD11 was a failure before it entered service.
Well, you must be hinting at the Swissair III crash in 1998. Very likely caused by a cable fire behind the cockpit, part of their new IFE system, though it seems there were issues with adequate cabling standards across the airline generally. Although, I was not connected with any of that, I was the producer for the system's audio content. This was the era of airlines wanting to adopt huge IFE systems now that they had fleet wide seat-back entertainment screens. Unfortunately, the airline went bespoke and commissioned its own, unique system. Nothing wrong with that, maybe, there wasn't a rigorous enough bedding in process. They would have been much better off buying in an off-the-shelf system that had been road tested.
@@hewhohasnoidentity4377 > *nobody trusted it* I mean, between at least half a dozen carriers, it did fly into the early 2000s, I wonder if the media scare mongering really did as much as some say... it might have, I really don't know, but it defintely still was a workhorse for a long time following the more notable crashes.
Ha - McKinsey faces charges of corruption in their role with the Guptas in state capture in South Africa. Though, we don't expect anyone to be bought to justice. How is this company still operating?
Why the Swiss would hire a bunch of bean counters like McKinsey is quite beyond me. All my dealings with the Swiss, have been top quality- and I've flown into Kloten, and night-stopped there more times than I can remember.
A wonderful aircraft. My dad - a huge aviation fan - would often wax lyrical about full squadrons of Lightnings going supersonic over the crowd at Farnborough and Biggin Hill air displays. Incredible. Wish I'd seen them too.
i love your productions but they’re so information rich, i have to keep winding them to fully process the data. Please keep up your amazing work. Thank you. 😀
Awesome, thankyou! Interesting that Swissair invested in South African Airways as far back as 1999, could've warned them that's where the rot would really set in!
Though not mentioned here - one way or the other - if the collapse of Swissair followed the pattern well-established in the U.S., then I'd be willing to bet that the very people who helped bring about the collapse walked away with a "million- dollar handshake." All this is especially galling for those of us who remember Swissair in its heyday. Sad viewing, but well-researched and well-presented.
It's really too bad. I Flew them the summer of 2001. Even in economy they were good. If they had more time to spin off all these unprofitable entities that McKinsey had convinced them to get into, maybe they would have survived. As it seems they finally figured this out near the end, and were in the process of unloading all that baggage as it were..
As a retired employee of an airline that went through bankruptcy, but continued to operate (under US bankruptcy law) I see many of the same mistakes made in both cases. Swissair had some handicaps that were going to be difficult to overcome in the best of circumstances. Competing against Lufthansa, for example, is not feasible. Just the states of Hessen (where Frankfurt is located) and Thuringia have a larger population than all of Switzerland. That small a customer base can not support the expansion plan they had. Political factors like not joining the EU did not help, but the final "nail in the coffin" was hiring McKinsey. Investing in a group of other failing airlines was not good advise in any way. It is like going to the hospital and inviting a group of other sicker people to join you hoping it will make you better! My company was luckier in hiring Bain & Co to help and getting a CEO that had vast experience in both airlines and working for Boeing. We went from "worst to first" in less than three years.
While a minor point in the story, at 8:13-8:35 this video seems to have gotten the history of the formation of three main airline alliances wrong. Star Alliance was first (1997), Oneworld second (1999 but presented 1998) and SkyTeam last (2000).
You are correct there are some countries in the world that have Airlines on opposite Alliances US Oneworld AA AS Skyteam DL Star Alliance UA People's Republic of China 🇨🇳 including Hong Kong special administrative region 🇭🇰 Star Alliance CA ZH Skyteam MU and FM Oneworld CX🇭🇰 Republic of China 🇹🇼 Skyteam CI Star Alliance BR Republic of Korea and Japan *These countries have two skytrax 5 star rated Airlines on different Airline alliances* Skyteam 5 star KE🇰🇷 (DL Skyclub Access domestic prohibited) Oneworld JL 🇯🇵 (AA Admirals Club AS lounges Domestic US allowed) Star Alliance NH🇯🇵 & OZ🇰🇷 (Domestic US UA Club Allowed) United Kingdom 🇬🇧 VS Skyteam (Domestic US DL Skyclubs access not allowed) Oneworld BA (AA Admirals Club AS Lounge access on higher tier allowed) Spain Skyteam Air Europa (Suma Skyteam Elite Plus cannot access DL Sky clubs in the United States) Oneworld IB (Oneworld Emerald/Sapphire tier access is allowed on AA Admiral lounges)
The one and only step that might had helped Swissair was the offer of the then-CEO of Lufthansa, Jürgen Weber, Swissair to become a member of the Star Alliance and to quit the co-operation with American Airlines (in which AA took far more advantages than SR). But exxagerated obsession with indepedence finally broke SR's neck.
I worked for Anderson Consulting, a McKinsey twin in this period. Most of their consultants were only a couple of years out of college, with next to no professional experience. I pitied our unsuspecting clients. Anderson went out of business a couple of years later, as it deserved to do.
If you want the Asia Pacific version of it is this Philippine Airlines PAL- Plane Always Late. Better experience try competitors of PR in the region take Skytrax 5 Star rated like Swiss International Airlines Star Alliance partners OZ🇰🇷 NH🇯🇵 SQ BR🇹🇼 followed by Oneworld Alliance CX🇭🇰 and QR Skyteam Alliance KE🇰🇷.
The decline of Swissair began when financiers were made bosses instead of airliners. The chairman of the board of directors and the CEO brought their friends from McKinsey into the company. The last and only person who could have prevented the entrepreneurial disaster was an American, Jeff Katz. This one at AA, under the legendary Robert Crandall, was a hardened, quick-witted man who had clubs thrown in his legs until he threw up the beg, rightly convinced that the Swissair bosses were total ignoramuses and the whole thing was not going to end well. How do I know all this? I've had the privilege of serving under Katz and defending the Swissair premium products against leveling demanded by McKinsey and the other zeros. To understand the arrogance of these unskilled managers, suffice it to know that they actually believed they could do what Air France had failed to do for decades with SABENA - make these lazy fellows profitable. In addition, they financed with SWISSAIR money that had been accumulated over 60 years through solid business, throwing it out the window in a naive strategy in favor of bankrupt companies. Insolvent constructs like Crossair, Air Liberté, LOT, etc. thanked them warmly and bamboozled SWISSAIR to the end! The narrator's conclusion is correct: ANY company can be destroyed by the incompetence of its management, by not understanding the brand DNA, whether it is Mercedes, Pan AM, Rolex, or Swissair. The irony of history is that Lufthansa, of all companies, which could never hold a candle to Swissair in terms of service and quality, was able to take over what was left of this former dream brand for a piece of cake.
I worked at a company that was Mckinsey'd in the mid 2010s. Their approach was simplistic, gimmicky, potentially damaging and they had no idea of how the basics of the area they were in functioned. The impression was of a handful of 6th form management students doing a project for school. It all ended well for me but boy they were a distraction. Often management have already decided what they want to do and bring in consultants who they can blame when it all falls apart. It then becomes an expensive sham.
Shaking my head at the consultant's concept of diversification is based on #1 investing in other airlines and #2 horizontally integrating in to other air service operations. Diversification generally involves investing in enterprises that are not related to your current business..
There's a rumour that regular York - Wolverhampton trains might be using the Stalybridge - Stockport line, with a reasonable amount of stops for Reddish South and Denton. This is dependent on more bi-mode units and pathing.
@@mikehindson-evans159 Oops. I had been watching our glorious leader's earlier post on least used railway stations, and thought I had put it on that one!
4:10 The vote in 1992 was not about joining the European Union (EU) but about joining the European Economical Space. It was far less binding than joining the EU but this refusal was a clear sign that Switzerland was not ready to join the EU.
I flew Swissair in the early 70s. The inflight service was absolutely excellent. BEA service by comparison felt much less professional. Thus the demise of such a wonderful airline was a tragedy. One has to admit that the design of Swissair's aircraft tails was a big plus. (Sorry!!)
The concept of Low-Cost Airliners now has spread to High Speed Train Travel in the form of SNCF's Ouigo (Oh we go) TGV service and more recently in The UK Lumo service. Sorry i went completely off topic there even so it is a shame that of the times i flew overseas i never flew with SwissAir maybe it was because they did not serve Australian airports who knows. There were other airliners to choose from though. It's a shame that SwissAir went the way of the dinosaur like Ansett Airlines did.
Sabena, Al Italia, SAA,... This is the bottom of the barrel. Would have been great if they invested in catering or air freight instead. When SwissAir was losing money, why didnt they do an equity offer before becoming bankrupt?
Great video as always! Quick question though. What on earth happened to your microphone? It used to sound 10 times better, much clearer. It sounds so muffled and rolled off now. I suggest going back to your old microphone or however you recorded your voiceovers before. Keep up the good work!
@@mdhazeldine I agree the videos used to seem crisper looking as well. Shame. But YTs video compression is generally terrible especially content that has gone thru many stages of compression iterations progressively getting worse.
@@pjotrtje0NL The hit to its reputation would have been significant and ultimately would have stifled any chance of a financial recovery, even though unlikely anyway.
I also think by 2001, Swissair was flying a fleet of increasingly obsolete aircraft, too. Lufthansa's purchase of Swiss International Airlines in 2006 meant the airline could finally buy a lot of new planes, for example going to a combination of A320 Family and the A340-300 plus the 777-300ER. now supplemented by the A220 and soon the A350-900 to replace the A340's.
McKinsey has a knack of turning gold into siht.
How to become a small business?
Be a large one and get McKinsey in.
Scheme -ers , as Heath Ledger would say as Joker
Hmm, I look at it as, they had a knack of turning siht (unprofitable airlines) into gold (for themselves).
Not with Unions.Then/ Extant not a large pool of customers,coupled with out of control increasing costs.can only subsidize entities losing money for so long.
Their competitors are exactly the same.
I remember flying Swissair in economy class. We had leather seats and the meal consisted of a plate of dry Grisons beef fillet, which is very expensive. It was a flight from Paris to Zurich. I complimented the steward about this unexpected high standard. His proud answer was that it was normal Swissair standard. The week after, Swissair went bankrupt…
A terrible shame but I don't think their lavish catering was what did them in lol
That happened because of the crash in Halifax, i loved my airline and was cranky the government didn’t do more to help the national airline out.
Sad
SR 111 had relatively little to do with the failure. It was the result of excessive debt incurred by the CEO of the group, who ran up about CHF 5,000.000.000 of debt the board of directions was not aware; the 9-11 disaster with SR losing USD $ 17M per day,; the entrance of the new Euro in surrounding countries, versus a strong CHF; and the accumulation of Sabena and other airline shares that ultimately doomed the finest airline the world had ever known, bar none! @@ilovesuisse1
I worked for a company that was Mckinsey'd back in the late 80's and took about a decade to recover.
When I first heard the name mentioned in this video it was an "aha, I now get it" moment.
I flew Swissair a number of times in the 80's and 90's and always thought they were excellent.
Yeah, they did spin off that "Hunter strategy" to Swissair stupid ass executive named Bruggisser and he was foolish enough to buy it. All the remaining board people were honorary people with no aviation background whatsoever and did sleep the board meeting out and just collecting their attending board fees. Management issue all over.
Unfortunately, it wasn't McKinsey alone. The whole Swissair debacle is a prime example of a class of "business elites" sitting on inherited laurels and thinking that their mere existence would pay for itself.
One saying about McKinsey was that they would go into a company and tell them to decentralised everything that was centralised and vice versa. Then in 2 years go back and repeat the process in reverse. A nice permanent income stream! Sadly my one experience of Swissair shortly before their demise was less good, the only airline I've ever known to lose hold baggage on a point-to-point flight. Apparently the ground staff at Basle had forgotten to unload one compartment completely, so there were a dozen or so upset passengers milling around. But by then the plane was apparently on its way back to London. We got our bags next day. Not what I expected of Swiss efficiency.
When a company 'outsources its decision making to McKinsey' (or another consulting firm) they deserve what they get. In such cases, there was usually an ex-McKinsey board member to do the advocacy from the inside. It would be interesting to have an audit of the financial interests of McKinsey in the multiple transactions they recommended, unopposed by the passive Swiss Air board.
I was thinking exactly the same. McKinsey and all the other big consulting outfits get paid their fees whatever happens. Their influence on commercial entities and governments is malign. They give management (and government) an excuse not to develop their own expertise and real ability to manage. I wonder how many really successful businesses outsource such decision making.
@@rivaterrier I worked for a school system that hired and paid very well administrators who were supposed to make policies and decisions to make the district top notch at educating children. Almost all these highly educated and expensive people promptly farmed out at great expense the policies and decisions they were supposed to make to outside consulting firms. If the policies and decisions turned out to be wrong and detrimental (as they often were) the administrators then could blame the consultants for the failure. So much money was wasted doing this.
McKinsey and these other "consulting" firms have to make themselves relevant to these boards that are paying them handsomely. How would it go over if the consulting firm came back and said, "do nothing different, your on the right path to success"? How long do you think that board would keep them on retainer if they realized that they were already making the right decisions and were doing well? Why keep paying this consulting firm if their advice is to do nothing different than you would otherwise? So of course a "consulting" firm is going to make one suggestion and recommendation after another to keep themselves on the dole.
Plus it always helps when you have a senior board remember on the inside, or you got your fingers in the other companies your recommending to purchase or make deals with.. Or like others said, if they make the wrong choice, the board members get to blame the consulting firm and walk away from responsibility by both parties. How many of the SwissAir board member stayed on with Swiss or found another company to pay them and not suffer any consequences for their actions?
Also wondering about that, and how many in McKinsey made a killing on Sabena shares!
For access to the Belgium hub, and only a 49% non-controlling share, loss-making Sabena should've paid Swiss Air those millions instead of the other way around!
Most companies fail when they farm their strategic decisions to outside firms that know nothing about their business and the peculiarities of their company. This is doubly baffling when successful companies do it.
I worked for a tech company that became the leader in their business. In 1998, they brought in BCG to consult. They went on interviewing all executive & middle management for months, and produced a most comical competency layout - they understood nothing. Yet the board kept going. The company went from $1.3B/year with no debt, to $650M and tons of debt within ~6 years mostly for failed acquisitions. Almost killed their golden goose chasing after unrealistic dreams.
Luckily for them, their golden goose didn't die, and they greatly recovered. But even with all their acquisitions, they still haven't reached 1.3B yet.
Part of the expansion aggression made during the 90’s was the retrofitting of brand new in-flight entertainment systems for older fleets to attract new customers. The decision which ultimately brought down Swissair Flight 111 when the sketchy wiring circuit caught on fire.
"aggressive" ?? i think that was only two planes flying between NYC and geneva.
@@ursodermatt8809 it was all the MD11s repainted in the eurowhite livery. One MD11 had the system in all 3 classes (a single picture exists online - in economy the screens were incorporated into a secondary panel attached to the tray table) and the rest had it in First & business only.
I'm not sure if the 747s got the system too when they went eurowhite
Knew about the crash. Never knew it was in some sort of reaction to the struggle to survive in a competitive market. Too bad the passengers became part of the damage of turbulent market maneuvering.
@@JimMork To be honest: the relation is rather coincidential. It's a bit of a stretch to blame McKinsey for that desaster.
@@JosipRadnik1 I agree. I don't think McKinsey would sink to a detail like "upgrade in flight entertainment". But some conditions led to hiring McKinsey. My bank employer worked with them eons ago. Upshot was the bank was bought by a expanding bank. And down the line, there was a massive management problem. McKinsey? No. But their presence is like when ambulances come. They are a rescue operation.
McKinsey in particular amongst the consultant firms seem to have done quite a lot of damage over the decades to industry especially in Europe.
Those who can, do.
Those who cannot, teach.
Those who cannot teach, consult.
Old English proverb.
The video Steven Crowder did on McKinsey & Company is very eye opening.
@@blatherskite9601 🤣I thought Those who cannot teach, teach gym class.
If you don’t know how to push back against consultants that have no legal or financial leverage to compel you to obey them, then you weren’t fit to run a company in the first place.
@@buffalomerkis7603 There is also a book called "When McKinsey Comes to Town" which uncovers McKinsey's ruthless corporate tactics.
Key missing factor that went unmentioned was the crash of Swissair flight 111. Funnily enough, as many point out, McKinsey can also be blamed for it.
Why is that?
@@paulyoung7551There has to be a McKinsey connection to 111. That is the only possible explanation for using a Las Vegas based company to install an in flight entertainment system in the aircraft. Vegas doesn't even have a maintenance hanger today. At the time of 111, the Vegas airport was nearly irrelevant by any metric. The only importance the Vegas area had for aviation was that the fan disc that failed on United 232 (Sioux City) was forged in Henderson.
Why Swiss Air chose a company no other airline had heard of to supply the IFE system had to be connected to McKinsey.
That crash was a fiasco total fiasco
@@hewhohasnoidentity4377 Sounds like the lowest bidder to me. I somehow doubt the Swiss actually knew where exactly they had sent the planes off to get the new systems installed, they just knew the board was adviced by McKinsey to send them there.
@paulyoung7551 he recommended that older be planes be sent to equip with new entertainment systems, and the same old wiring were used to cut cost on implementation. The wires which would catch fire on flight 111.
Yet another one of those names I remember from my youth but never quite figured out what happened until now. This channel is so very helpful for that.
Yep. McKinsey happened.
15:50 - That's Captain Urs Zimmermann who was Captain of the ill fated Swissair Flight 111 which crashed in Nova Scotia, Canada after an in-flight fire.
RIP 😢
Oh, wow~
RIP
Oh wow I didn’t know he also flew the Airbus RIP
@@walternerd3147 He was type rated on the A320 family the mid 1990's and then moved onto the MD-11 in 1997. You can find all this information on the final report of the accident.
In 2000 my parents visited Europe, booking a SwissAir flight. When they arrived at the airport there was no sign of SwissAir staff, and it took a while for them to figure out that the flight was cancelled, and to make alternative arrangements. This was very much the opposite of what one would expect from SwissAir. But when SwissAir disappeared the next year, we weren't very surprised.
Sadly my one experience of Swissair shortly before their demise was similar, the only airline I've ever known to lose hold baggage on a point-to-point flight. Apparently the ground staff at Basle had forgotten to unload one compartment completely, so there were a dozen or so upset passengers milling around. But by then the plane was apparently on its way back to London. We got our bags next day. Not what I expected of Swiss efficiency.
@@iankemp1131I flew almost three decades as cabin crew, within don’t know how many flights as a passenger, but somewhere in the upper hundreds or thousands. It did happen, that your checked luggage did not arrive at the destination. Lost and Found report and the suitcase was geleitetes next day or days. It really isn’t a big deal. Expect the Unexpected.
@@wakeupcall2665 well yes, we all know that glitches can happen and I've had luggage delayed on a couple of occasions when connecting flights were late and there wasn't time to transfer it, that's fully understandable. But this is the only time I've seen a substantial number of people left simultaneously without luggage on a simple point-to-point flight on any airline because they forgot to unload a complete compartment. Mercifully very rare, as it should be.
@@ristokempasSwitzerland is not a shifty country, i find that comment offensive. I don’t know anyone who worships “Moscovia”. That’s a daft comment, considering how many thousands of Ukranian refugees we have here. I love my beautiful country, plenty of people love visiting here. Maybe you should look at your own country, maybe your country is not so perfect like you think. Saying you are a European from a wealthy country sounds snobbish, full of self importance.
Swiss Air's 1950s hand painted advertisements are some of my favorites from the whole industry, thanks for the vid, fantastic as always!
Started with Crossair in late 1999 on the Saab 340 before quickly moving to E145. Was in Alicante when the Swissair collapsed having just arrived from Geneva. Swiss first officer nearly fainted with shock. Crossair expanded to become Swiss but I got chopped in the significant redundancies.. The only remnant of Crossair now is Swiss’ LX flight destination.
Kinda crazy when you realize you could step in as CEO with zero experience and still be 100% more successful just by making no major decisions.
I flew Swissair many times in the late 80’s, including holidays with my family. They were superb. Then they seemed to just give up and became hopeless and I never used them again. Frankly, I really do not understand why anyone now flies out of choice. The golden days are truly over.
Swissair's Qualiflyer group always seemed like a 90s version of Etihad Partners
That being the group members didn't help Swissair/Etihad, just bogged them down
@@conlanding that was their final livery, they also changed the bottom colour to blue to signify the Qualiflyer group
You can turn it also the other way round. When Etihad started to buy shares in crappy airlines, here in Switzerland many people said things like "oh look, they do a Swissair" or "ah, that's where all the former Swissair managers have ended up...".
This was a traumic thing in switzerland, the fact that the germabs came and bought what was left was the cherry on top.
There is even a swiss movie about it.
Without the Germans picking up what the incompetent Swiss destroyed, Switzerland wouldn't have an airline anymore at all. And the movie is probably the biggest joke of them all, painting Swissair's Management who ran the company into the ground as the victims. Complete hogwash.
I worked in the industry during this period, and it seemed that every few days there was a reiteration of the ability of Swissair to create a head-shaking moment.
I remember Swissair from the Tintin story The Calculus Affair, one of my favourites of the series.
Moral. Avoid management consultants.
Sir Arnold Weinstock used to say to subordinates, recommending the use of consultants - "You want me to pay someone else to do your job."
@@1951GL yes comparing weinstock and McKinsey only reinforces the old saying, ‘ those that can, do. Those that can’t, teach’.
Or use them only for temporary activities, for which hiring and firing own staff is difficult and costly…
@@brianwillson9567 I've never respected that derogatory saying. Without teachers nobody learns to "do" anything at all
@@visionist7 teachers are today no more than purveyors of the wokist agenda. Pink Floyd had it right all those years ago in the wall.
I flew SwissAir in July 2001 returning on a A330. It was a good flight, even in economy. Flew into Newark New Jersey, you could see from the tip of Manhattan with the Statue of Liberty and of course the Twin Towers upon landing; it all changed in a matter of months after that. I had no clue how close they were to going bankrupt. I haven't had the chance to fly Swiss since then. Somehow always ending up on United through Chicago to Zurich since then. Fascinating story, well presented.
Last month I flew from Zurich to Newark with Swiss and I can comfortably say that you are not missing much. United experience is so much better and that should say a lot.
Who would have guessed, outsourced consultants getting it wrong. I've "never" experienced that. A friend had his whole dept outsourced to save money, now costs the company 3 times more than it did before.
Excellent vid.
If McKinsey was so certain of their advice, they should have been made to invest in the airline. The same could be said for any consulting company who advise organisations. Skin in the game is required, otherwise it’s just management being lazy which deserves to fail.
Interestingly, we try to do that in a lot of our clients, yet they are not willing to do that as it decreases profit for other stakeholders…
Ever notice who hires consultants? Men. And not simply because the majority of corporate leaders are men. Why? Consulting for many industries is little more than hiring a team to regularly jerk off the clients. Thus the more they play to the client egos and hubris, the better. And remember this rule of consulting - “We don’t actually DO anything we propose, we just propose it”.
Well some executive women in charges are also quite bad. See Anne Lauvergon at the head of the french atom company who nearly drove it to bankrupcy because she agreeed to overpay billions for the acquisition of an african company that was pretending to have uranium mineral stock which they didn't have 10% of what they pretented.@@kcindc5539
@@kcindc5539 What the hell are you talking about? "Ever notice who likes to eat hamburgers? Precisely. Men! And who was a man? Hitler! Therefore..." That is how that reads. I can make up a "rule" too if you'd like. I don't think the consultants in this case were fluffing the airline. They just made bad recommendations. A LACK of ego could be argued to be the problem here as it seems the Swissair higher ups were very passive.
@@kcindc5539 tell me you have daddy issues without telling me you have daddy issues
One thing I have always liked about Swissair/Swiss is the white cross on the tail. That's one detail that speaks for itself. After making such bad business decisions for years, I hope LX will finally be successful. Interesting subject, you should make episodes of other airlines that have had struggles and are also fighting to stay up. Good job.
I very clearly remember my first trip to Switzerland in 1995 (as a teenager) with a Swissair flight from LHR to Zurich on a brand new Airbus A321. It seemed very high quality and I was most impressed by their luggage delivery service to your hotel and the fact that the train station was right under the terminal. So slick. Shame it all fell apart.
The train station hasn't moved 😉
Having a train station right under the terminal isn't unique, though I can't think of there being one in any UK airport.
@@sheevone4359 Stansted does, but it's a terminus and far away from London. Gatwick almost does (it's next to it). Heathrow Terminal 5 does, but that's a terminus too and wasn't built at that time. We don't have any through stations under airport terminals that are that close to a major city.
@mdhazeldine ah yes, so kind of on all these accounts.
One of the nicest flights I have ever had was returning from Zurich to Heathrow about 2. pm. Blue Skies sunny, turned up at the Airport just 30 minutes before take off, Check In said stay calm. Luggage was taken from me by Swiss staff who said DON'T RUSH, your aircraft is through those doors and immediately on your right BUT Duty Free is opposite, you have time. Even on such a short flight, nice food and drink, impeccable service and I thought "Swiss have got this sorted". How wrong I was but thanks for explaining why I was wrong.
Management consultants are expensive and I have not heard of any of their successes. In fact they drop in, make several suggestions, which unfortunately the management agree too. Fini.
Fading memories of flying on Swissair Caravelle, Metropolitan, and Coronado. The last in 1969 between HKG and BKK.
The great thing about being a consultant is that you get to play with other peoples money, with absolutely no consequences or responsiblity.
Unfortunately companies still spend millions on consults to cut costs and usually get rid of the people that hold the company together but their job title / description may not actually Match what they do.
I hope you don't take this the wrong way, but I always feel satisfyingly exhausted after your videos. Your style is just right for these stories. Great vid as always!
As soon as they callled in McKinsey, they were doomed.
Pilot shown in the video is Urs zimmarmen died in swiss air 111 crash😔😔😔😔😔😔😔😔
Long live outsourcing and CEO’s from the old boys network. They, at least, made a fortune.
A week after 9/11 I flew London St Louis with TWA . Three weeks later returned on the same route again with TWA . On outward the aircraft was less the half full , on the return less then ten in cattle class , passengers outnumbered the cabin staff . Shortly after the airline collapsed .
The number of airlines that have folded is quite incredible , does the industry have a self destruct button , mergers that only benefit one side . Corruption ? McKinley was under investigation for insider trading.
6 months after 9/11 I flew on an American Airlines flight from St. Louis to Kahului, Maui, and it was so surreal since it was on ex-TWA metal (one of their 767-300s in their final livery), full TWA interior, and paint. Almost forgot I was actually on American Airlines at one point... maybe I am just dopey sometimes. 😂
@@DanknDerpyGamer The question we were mostly asked with astonishment in their voice " You crossed the pond , weren't you scared. "
Very impressed with your level of detail in bad management decisions. Acquiring loss making airlines, never a favorable strategy and outcome of profitability. Basic business and common sense approach.
Plane truth.
I think as well Swissair 111 also caused problems as well with the entertainment systems which not only saw the death throes for Swissair but also for the MD11
The MD11 didn't have a chance. The reputation of the DC10 was so bad nobody trusted it. The ETOPS rules changed to make twin engine operations remove the need for a third engine. Then the fuel consumption was not as good as was promised, causing Singapore to cancel their order. Finally, the 777 entered service and made the MD11 obsolete.
111 didn't kill the MD11. The MD11 was a failure before it entered service.
Well, you must be hinting at the Swissair III crash in 1998. Very likely caused by a cable fire behind the cockpit, part of their new IFE system, though it seems there were issues with adequate cabling standards across the airline generally. Although, I was not connected with any of that, I was the producer for the system's audio content. This was the era of airlines wanting to adopt huge IFE systems now that they had fleet wide seat-back entertainment screens. Unfortunately, the airline went bespoke and commissioned its own, unique system. Nothing wrong with that, maybe, there wasn't a rigorous enough bedding in process. They would have been much better off buying in an off-the-shelf system that had been road tested.
@@hewhohasnoidentity4377 > *nobody trusted it*
I mean, between at least half a dozen carriers, it did fly into the early 2000s, I wonder if the media scare mongering really did as much as some say... it might have, I really don't know, but it defintely still was a workhorse for a long time following the more notable crashes.
Ha - McKinsey faces charges of corruption in their role with the Guptas in state capture in South Africa. Though, we don't expect anyone to be bought to justice. How is this company still operating?
8:30 The Star Alliance actually came first in 1997. Oneworld was formed in 1999, and SkyTeam in 2000.
Was just watching John Oliver’s segment on McKinsey and was immediately drawn back to this video. I knew I heard of McKinsey before…
I wonder how much McKinsey made out of this mare's nest?
Excellent video - a worse (Swiss) version of British Leyland.
Why the Swiss would hire a bunch of bean counters like McKinsey is quite beyond me. All my dealings with the Swiss, have been top quality- and I've flown into Kloten, and night-stopped there more times than I can remember.
The Star Alliance also included founding members Air Canada and Thai Airways.
A wonderful aircraft. My dad - a huge aviation fan - would often wax lyrical about full squadrons of Lightnings going supersonic over the crowd at Farnborough and Biggin Hill air displays. Incredible. Wish I'd seen them too.
The Hunter strategy was totaly bonkers. They bought the worst leftover carriers.
i love your productions but they’re so information rich, i have to keep winding them to fully process the data. Please keep up your amazing work. Thank you. 😀
I use them on repeat to sleep. I can listen fully 50 times and still pick out new information.
I have been on Swissair and it's successor Swiss International but not the internal arm Cross Air.
9 out of 9 directors having no relevant industry experience? That's definitely time to sell your shares.
Awesome, thankyou! Interesting that Swissair invested in South African Airways as far back as 1999, could've warned them that's where the rot would really set in!
One of the great Airlines along with the best livery especially on thier mad dogs!!
Swissair: "Shall we expand our code-sharing?"
McKinsey: "Answer unclear. Ask again."
Very good narration - brilliant closing comments 👍
You should voice the British version of Forensic Files as your narration sounds very iconic and so smooth it’s very good!
They had no way to know it at the time, but mid-2001 is a particularly terrible time to try to stage a recovery in the airline industry.
Though not mentioned here - one way or the other - if the collapse of Swissair followed the pattern well-established in the U.S., then I'd be willing to bet that the very people who helped bring about the collapse walked away with a "million- dollar handshake." All this is especially galling for those of us who remember Swissair in its heyday. Sad viewing, but well-researched and well-presented.
It's really too bad. I Flew them the summer of 2001. Even in economy they were good. If they had more time to spin off all these unprofitable entities that McKinsey had convinced them to get into, maybe they would have survived. As it seems they finally figured this out near the end, and were in the process of unloading all that baggage as it were..
Minor nitpick, the Pentagon is in Langley, Virginia not Washington, D.C. (but they are very close).
It's in Arlington, VA, but it has a DC mailing address.
As a retired employee of an airline that went through bankruptcy, but continued to operate (under US bankruptcy law) I see many of the same mistakes made in both cases. Swissair had some handicaps that were going to be difficult to overcome in the best of circumstances. Competing against Lufthansa, for example, is not feasible. Just the states of Hessen (where Frankfurt is located) and Thuringia have a larger population than all of Switzerland. That small a customer base can not support the expansion plan they had. Political factors like not joining the EU did not help, but the final "nail in the coffin" was hiring McKinsey. Investing in a group of other failing airlines was not good advise in any way. It is like going to the hospital and inviting a group of other sicker people to join you hoping it will make you better! My company was luckier in hiring Bain & Co to help and getting a CEO that had vast experience in both airlines and working for Boeing. We went from "worst to first" in less than three years.
I still don't understand how McKinsey is so successful. They seem to be the ruin of many a large corporation.
Awesome video!
The sound of that MD-11 taking off at the start of that video is completely wrong. It was the sound made by a MD-80 probably.
Thanks for this great video!!
Thank you Rory 🤗
Gotta love learning more about Mckinsey than really anything else reading the comments.
"They got Mckinsey'd~"
lolol
Accurate explanation,also the disaster of flight 111 help its sinking.
Oh yeah, bring in McKinsay, the sure kiss of death.
Cover Sabena next! Then perhaps Varig.
Wow. Just wow. The Swiss guy always complaining here. Nailed it right in the face. Brilliant and absolutely correct down to the last dot. You rock.
First time i came across swissair was Tintin the tournesol affair...
While a minor point in the story, at 8:13-8:35 this video seems to have gotten the history of the formation of three main airline alliances wrong. Star Alliance was first (1997), Oneworld second (1999 but presented 1998) and SkyTeam last (2000).
There should be a couple more alliances a triopoly is undesirable
Oneworld and SkyTeam were in many ways essentially created as a response to the formation of the Star Alliance.
You are correct there are some countries in the world that have Airlines on opposite Alliances US Oneworld AA AS Skyteam DL Star Alliance UA
People's Republic of China 🇨🇳 including Hong Kong special administrative region 🇭🇰 Star Alliance CA ZH Skyteam MU and FM Oneworld CX🇭🇰
Republic of China 🇹🇼 Skyteam CI Star Alliance BR
Republic of Korea and Japan *These countries have two skytrax 5 star rated Airlines on different Airline alliances*
Skyteam 5 star KE🇰🇷 (DL Skyclub Access domestic prohibited) Oneworld JL 🇯🇵 (AA Admirals Club AS lounges Domestic US allowed) Star Alliance NH🇯🇵 & OZ🇰🇷 (Domestic US UA Club Allowed)
United Kingdom 🇬🇧 VS Skyteam (Domestic US DL Skyclubs access not allowed) Oneworld BA (AA Admirals Club AS Lounge access on higher tier allowed)
Spain Skyteam Air Europa (Suma Skyteam Elite Plus cannot access DL Sky clubs in the United States) Oneworld IB (Oneworld Emerald/Sapphire tier access is allowed on AA Admiral lounges)
I’m sure I have some Swissair memorabilia somewhere in the house…
The one and only step that might had helped Swissair was the offer of the then-CEO of Lufthansa, Jürgen Weber, Swissair to become a member of the Star Alliance and to quit the co-operation with American Airlines (in which AA took far more advantages than SR).
But exxagerated obsession with indepedence finally broke SR's neck.
Very good reconstruction of events. No reference is made to the Swissair 111 flight accident in 1998. Did it have a role at all?
Philippe Brugisser, not Brugissier!
I worked for Anderson Consulting, a McKinsey twin in this period.
Most of their consultants were only a couple of years out of college, with next to no professional experience.
I pitied our unsuspecting clients.
Anderson went out of business a couple of years later, as it deserved to do.
McKinsey is still operating..
AT&T in NEW JERSEY used Anderson Consulting back in the 1980s. That explains things!
SABENA: Such A Bad Experience Never Again
- 🤣 👍
If you want the Asia Pacific version of it is this Philippine Airlines PAL- Plane Always Late.
Better experience try competitors of PR in the region take Skytrax 5 Star rated like Swiss International Airlines Star Alliance partners OZ🇰🇷 NH🇯🇵 SQ BR🇹🇼 followed by Oneworld Alliance CX🇭🇰 and QR Skyteam Alliance KE🇰🇷.
The decline of Swissair began when financiers were made bosses instead of airliners.
The chairman of the board of directors and the CEO brought their friends from McKinsey into the company.
The last and only person who could have prevented the entrepreneurial disaster was an American, Jeff Katz.
This one at AA, under the legendary Robert Crandall, was a hardened, quick-witted man who had clubs thrown in his legs until he threw up the beg, rightly convinced that the Swissair bosses were total ignoramuses and the whole thing was not going to end well.
How do I know all this? I've had the privilege of serving under Katz and defending the Swissair premium products against leveling demanded by McKinsey and the other zeros.
To understand the arrogance of these unskilled managers, suffice it to know that they actually believed they could do what Air France had failed to do for decades with SABENA - make these lazy fellows profitable.
In addition, they financed with SWISSAIR money that had been accumulated over 60 years through solid business, throwing it out the window in a naive strategy in favor of bankrupt companies.
Insolvent constructs like Crossair, Air Liberté, LOT, etc. thanked them warmly and bamboozled SWISSAIR to the end!
The narrator's conclusion is correct: ANY company can be destroyed by the incompetence of its management, by not understanding the brand DNA, whether it is Mercedes, Pan AM, Rolex, or Swissair.
The irony of history is that Lufthansa, of all companies, which could never hold a candle to Swissair in terms of service and quality, was able to take over what was left of this former dream brand for a piece of cake.
I read once that throughout its 71 years, the number of years where Swissair actually showed a profit was - one.
Wasn’t that about Sabena?
I worked at a company that was Mckinsey'd in the mid 2010s. Their approach was simplistic, gimmicky, potentially damaging and they had no idea of how the basics of the area they were in functioned. The impression was of a handful of 6th form management students doing a project for school. It all ended well for me but boy they were a distraction. Often management have already decided what they want to do and bring in consultants who they can blame when it all falls apart. It then becomes an expensive sham.
Shaking my head at the consultant's concept of diversification is based on #1 investing in other airlines and #2 horizontally integrating in to other air service operations. Diversification generally involves investing in enterprises that are not related to your current business..
Managed to Failure 🤣🤣 Great Work by all concerned.
Could you cover Air Europe an early version of Ryan Air?
Small note on the Swiss footage you showed at the end. It's all recent stuff after the logo change.
There's a rumour that regular York - Wolverhampton trains might be using the Stalybridge - Stockport line, with a reasonable amount of stops for Reddish South and Denton. This is dependent on more bi-mode units and pathing.
With Swissair branding?? An interesting post on this Swissair airline documentary...
@@mikehindson-evans159 Oops. I had been watching our glorious leader's earlier post on least used railway stations, and thought I had put it on that one!
Aggressive expansion......combo of words that have mostly not gone well when associated with airlines😬
4:10 The vote in 1992 was not about joining the European Union (EU) but about joining the European Economical Space. It was far less binding than joining the EU but this refusal was a clear sign that Switzerland was not ready to join the EU.
I flew Swissair in the early 70s. The inflight service was absolutely excellent. BEA service by comparison felt much less professional. Thus the demise of such a wonderful airline was a tragedy.
One has to admit that the design of Swissair's aircraft tails was a big plus. (Sorry!!)
The concept of Low-Cost Airliners now has spread to High Speed Train Travel in the form of SNCF's Ouigo (Oh we go) TGV service and more recently in The UK Lumo service. Sorry i went completely off topic there even so it is a shame that of the times i flew overseas i never flew with SwissAir maybe it was because they did not serve Australian airports who knows. There were other airliners to choose from though. It's a shame that SwissAir went the way of the dinosaur like Ansett Airlines did.
The crash of SwissAir 111 should have been included in this video.
Sabena, Al Italia, SAA,... This is the bottom of the barrel. Would have been great if they invested in catering or air freight instead. When SwissAir was losing money, why didnt they do an equity offer before becoming bankrupt?
My parents flew to New York from Zürich back in 1994 the trip was the only first - class flight they ever took
Great video as always! Quick question though. What on earth happened to your microphone? It used to sound 10 times better, much clearer. It sounds so muffled and rolled off now. I suggest going back to your old microphone or however you recorded your voiceovers before. Keep up the good work!
It sounds to me like this video was exported in a highly compressed format, possibly by mistake. The picture quality seemed quite poor too.
@@mdhazeldine I agree the videos used to seem crisper looking as well. Shame. But YTs video compression is generally terrible especially content that has gone thru many stages of compression iterations progressively getting worse.
@@ELcinegatto87 It's not TH-cam's fault. There are many very high quality videos on this platform.
Curious about role of Flight 111
Im shocked it wasn't included
It did not really influence Swissair’s financial performance (or lack thereof)
@@pjotrtje0NL The hit to its reputation would have been significant and ultimately would have stifled any chance of a financial recovery, even though unlikely anyway.
McKinnsey advised Bonin to hold his side stick
As soon as I heard Ruairidh mention "McKinsey" I knew where this was heading and it was nowhere good
Sending this to my swissair nerd friend
and I only commented this so I could be the first comment 😭
swissair will never fall , even if it does , it doesn’t fall In my heart
The video took off but i didn't feel i landed anywhere.
Oh I must had been sleeping, intoxicated, or sniffed some glue!!!
SWISS AIR WAS THE MOST LUXOURIOUS FLIGHT I EVER MADE. ZURICH TO JFK. COMFORTABLE AND A JOY IN EVERY WAY
Are you the guy from the Ocean Ranger inquiry?
I also think by 2001, Swissair was flying a fleet of increasingly obsolete aircraft, too. Lufthansa's purchase of Swiss International Airlines in 2006 meant the airline could finally buy a lot of new planes, for example going to a combination of A320 Family and the A340-300 plus the 777-300ER. now supplemented by the A220 and soon the A350-900 to replace the A340's.
There seems to be a bit of a thread here! Swiss companies expanding to the world market then crashing - Credit Suisse comes to mind! Who's next?
The flag has always been a big plus, though.