Swiss air group Essay

Contents

1) Summary of the case text ……………………………………………………. 3
2) How well is Swissair positioned; how well is Qantas positioned?....................5
3) Why are there so many alliances in the international airline business?……….. 7
4) Evaluation of Swissair’s strategy of alliances ………………………………… 7
5) A realistic long-term strategic plan for Swissair ………………………………. 9
Reference ……………………………………………………………………… 12












1) Summary of the case text
The case deals with two different airlines, namely Swissair and Qantas and their recent, contradicting experiences in the airline industry are compared. Swissair is the national carrier of Switzerland and because Switzerland is small the average flight haul of Swissair was by international standards short. One problem for the airline is that in 1992 the Swiss rejected membership of the EU. Qantas was for many years the flag carrier for Australia on international routes, while being excluded from domestic routes. Qantas has a low average cost per passenger and an excellent record for safety.

Swissair
During the 1990s Swissair adopted an ambitious twofold strategy: to enlarge its non-airline business and acquire minority holdings in other airlines, mainly European. It had significant aspirations to be a major international player. In the new competitive environment the European airline industry has suffered and still suffers from over-capacity. There are two ways to react to this situation; by consolidating existing lines by purchase or to join and existing, or form a new, network to rival the Star Alliance Oneworld. One proposal, strongly promoted by Swissair, has been to consolidate the small European airlines around Swissair.
Swissair had some transition problems; in 2000 they had a significant loss due to the rising oil price and an appreciating currency, their growth strategy was overambitious and failed, their debt equity ration rose dramatically and the level of competition increased. Swissair...