Closure and restart as an option for a sustainable South African national airline

Journal of Transport and Supply Chain Management

Field Value
Title Closure and restart as an option for a sustainable South African national airline
Creator Vermooten, Joachim
Subject Business; Air Transport Economics; Airline Restructuring national airline; turnaround strategy; airline restructuring; financial distress; funding requirements; business rescue; SAA; SAirGroup; Crossair; Swiss International Air Lines; Lufthansa; Phoenix; successor state-owned airline
Description Background: The non-implementation of certain key initiatives of South African Airways’ (SAA’s) turnaround strategy poses a risk that SAA may not recover financially.Objectives: The establishment of SWISS (previously known as Crossair and Swiss International Air Lines) as a successor airline to Swissair’s liquidation was studied to determine the viability of closure and restart of a smaller successor state-owned airline as an alternative option to a sudden liquidation of SAA.Method: The study is based on a literature review of analysis, official reports and financial results.Results: Three distinct phases for the establishment of the successor airline for Swissair were identified: (1) Financial distress of the SAirGroup (Swissair’s holding company) and the factors which contributed to Swissair’s demise. (2) The transition from Swissair to SWISS. Swissair’s grounding was caused by a liquidity crunch followed the announcement of bankruptcy protection. Flight operations were restarted a few days later with financial support from both the State and the private sector. Some of Swissair’s assets, routes, staff and flight operations were transferred to a subsidiary, Crossair, as successor airline, later re-branded as SWISS. SWISS, however, continued to incur losses despite progressively reduced scale of activities and four restructuring plans. (3) As a Swiss-based national airline SWISS, which became profitable following its acquisition by Lufthansa.Conclusion: The transformation of SWISS as successor airline to Swissair is an option to mitigate the risk of a sudden service disruption of SAA. Serious pitfalls require detailed preparation and funding before implementation. SWISS only became successful following its acquisition by Lufthansa.
Publisher AOSIS
Date 2020-03-19
Type info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion — Historical Inquiry; Literary Analysis
Format text/html application/epub+zip text/xml application/pdf
Identifier 10.4102/jtscm.v14i0.477
Source Journal of Transport and Supply Chain Management; Vol 14 (2020); 17 pages 1995-5235 2310-8789
Language eng
Coverage South Africa; Switzerland; European Union 2001 to 2017 Airline Restructuring; Airline Bankrupcy; National Airline; State-owned Airline
Rights Copyright (c) 2020 Joachim Vermooten