swissair alliances case study
GLOBAL BUSINESS ENVIRONMENT
Case 8: Swissair’s Alliances
Hoang Van Hung (David)
(Graduate MBA)
Philippines Christian University
Global Business Environment – Prof. Reyes
Feb. 22, 2013
Metro Manila, Philippines
I- Case Background
The Swiss Air Transport Co. Ltd., was founded in 1931 to fly between Switzerland and a handful of central European locations.
By 1949, the company had become the Swiss flag airline, and had inaugurated long-haul intercontinental service over the North Atlantic. By 1970, Swissair also served destinations in Asia, Africa, and South America.
In 1990, Swissair was among the top 20 airlines in international revenue-passenger-kilometers flown and among the top ten in international passengers carried.
The carrier had revenues of $2.2 billion in 1989, with strong enough cash flow to self-finance between 50% to 100% of its expenditure for aircraft and other capital equipment each year.
It owned several subsidiaries, including two charter airlines and the largest travel agent in Switzerland.
Unlike many of its European competitors, Swissair was not owned by the national government. Only about 22% of its equity was owned by various Swiss authorities.
Swissair’s main hub was Zurich’s Kloten airport with European traffic also routed through Geneva.
About 7 million people lived in Switzerland, Its two major cities, Zurich and Geneva, were important global business and financial centers, helping Switzerland become the wealthiest nation, per capital, in Europe.
Switzerland’s gross domestic product was forecast to reach nearly $175 billion in 1990, having grown steadily at between 2% and 3% per year over the previous five years. Labor markets were extremely tight in Switzerland during the period, with unemployment as low as 0.5%. Despite this, Swiss inflation was low and stable; prices rose an average of 2% per year in the 1908s.
Although Switzerland had not joined the European Community (EC), almost
Case 8: Swissair’s Alliances
Hoang Van Hung (David)
(Graduate MBA)
Philippines Christian University
Global Business Environment – Prof. Reyes
Feb. 22, 2013
Metro Manila, Philippines
I- Case Background
The Swiss Air Transport Co. Ltd., was founded in 1931 to fly between Switzerland and a handful of central European locations.
By 1949, the company had become the Swiss flag airline, and had inaugurated long-haul intercontinental service over the North Atlantic. By 1970, Swissair also served destinations in Asia, Africa, and South America.
In 1990, Swissair was among the top 20 airlines in international revenue-passenger-kilometers flown and among the top ten in international passengers carried.
The carrier had revenues of $2.2 billion in 1989, with strong enough cash flow to self-finance between 50% to 100% of its expenditure for aircraft and other capital equipment each year.
It owned several subsidiaries, including two charter airlines and the largest travel agent in Switzerland.
Unlike many of its European competitors, Swissair was not owned by the national government. Only about 22% of its equity was owned by various Swiss authorities.
Swissair’s main hub was Zurich’s Kloten airport with European traffic also routed through Geneva.
About 7 million people lived in Switzerland, Its two major cities, Zurich and Geneva, were important global business and financial centers, helping Switzerland become the wealthiest nation, per capital, in Europe.
Switzerland’s gross domestic product was forecast to reach nearly $175 billion in 1990, having grown steadily at between 2% and 3% per year over the previous five years. Labor markets were extremely tight in Switzerland during the period, with unemployment as low as 0.5%. Despite this, Swiss inflation was low and stable; prices rose an average of 2% per year in the 1908s.
Although Switzerland had not joined the European Community (EC), almost