Alliance strategy and the fall of Swissair

Wilma W Suen

Journal of Air Transport Management, 2002, vol. 8, issue 5, 355-363

Abstract: This paper argues that the Swissair Group's bankruptcy is a direct consequence of mistakes made in implementing its alliance strategy. While the strategy was sound, analysis of the relative resource-dependence between Swissair and its partners will show that Swissair did not need equity to bind its partners to it. Moreover, this approach to operationalising the alliance strategy undermined a corporate level goal to diversify risk beyond the airline business. Financial analysis will show that the airline investments were unprofitable, increased the Group's leverage and weakened its cash position. As a result, the Group did not have adequate resources to recover from external shocks.

Keywords: Strategic alliances; Swissair; Qualiflyer; Power; Interdependence; Financial management (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:8:y:2002:i:5:p:355-363

DOI: 10.1016/S0969-6997(02)00017-0

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