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HSE_CASE_NR: 103-043 | status: active
Authors: Santalainen, Timo
Baliga, Ram
Material: 22 pages
Notes: Swissair A is followed by cases B, C and D. Swissair cases deal with strategic decision making during a period of turbulence and discontinuity or to discuss the intricacies of strategic alliances in the aviation industry. The case set is a particularly good follow-up to the best-seller Harvard Business School case Swissair’s Alliances (HBS 9-794-152)
Publication year: 2003  Language: eng
Keywords: airline industry; alliances; aviation; competition; deregulation; excess capacity; restructuring; subsidies; turbulent business environment
Abstract: Philippe Bruggisser took over as the CEO of Swissair in 1996. Fragmentation, excess capacity, declining government interest in subsidizing loss making airlines, and EU initiated deregulation had made life difficult for airlines such as Swissair that had a small home market. Additionally, the benefits of deregulation that would accrue to airlines of countries that were members of the EU were currently unavailable to Swissair as Switzerland was not a member of the European Union. As an outsider, Swissair had to watch as European carriers added flights and entered alliances even as their governments were reluctant to renegotiate individual aviation treaties with Switzerland. The Swissair (A) case details strategic decisions made by Bruggisser as he sought to strengthen Swissair’s competitive position in the very turbulent aviation industry. Rather than seeking to ally with large international alliances such as Star, oneworld, or SkyTeam Bruggisser sought to build his own alliance—the Qualiflyer Group—by initially buying significant stakes in a number of second-tier European airlines, following this up with stakes in non-European international airlines such as South African Airways, and negotiating some route-specific agreements with other international airlines such as Cathay-Pacific. Bruggisser also adopted another contrarian strategy—going against the prevailing trend of outsourcing many of the activities involved in running an airline such as catering, aircraft maintenance, etc. and attempting to grow Swissair’s position in these to become a global service provider to other airlines.

Related teaching note:
Notes: 7 pages. Teaching note for Swissair (A), (B), (C),(D).
Publication year: 2003  Language: eng

Case is available from ecch case collection:
» ecch case info (62305)
[reference nr 303-186-1]