Swissair bosses cleared over airline collapse

Swissair's bankruptcy caused nationwide shock Keystone

A Zurich court has cleared all 19 former Swissair managers and advisors accused of bringing down the airline with criminal malpractice.

The defendants in Switzerland’s largest corporate trial had all denied charges that included damaging creditors, mismanagement, making false business statements and forging documents.

Prosecutors had requested that the former executives, board members and consultants receive sentences ranging from fines to six months in prison.

The court in Bülach near Zurich on Thursday also awarded around SFr3 million ($2.45 million) in compensation to be shared among the defendants.

“There is no evidence that the defendants knowingly acted to damage the company,” said Andreas Fischer, the presiding judge.

“In part, there is a lack of evidence from the prosecuting attorney that the critical actions taken actually led to damage at the SAirGroup,” he said, referring to the airline’s holding company.

“This court’s task was not to investigate the whole Swissair story or to find out why the airline was grounded,” said Fischer. “We had to look at the specific allegations made in each case of the indictment and were limited to that.”

Prosecutors can appeal the acquittal within the next ten days.

Emotional turmoil

The grounding of Switzerland’s national airline on October 2, 2001, generated emotional turmoil in the country and left a bitter taste in the mouth of many shareholders and staff who lost money and jobs.

“The prosecution was an absolute fiasco,” said Daniel Vischer, a lawyer and union leader. “Criminal law is a very tight corset,” he told Swiss television, adding that the question if prosecution had been under political pressure needed to be resolved.

Urs Eicher, speaking on behalf of a flight attendants union, criticised the high compensation that taxpayers would ultimately have to pay.

“Those who suffered real damage, the small people who lost jobs or pension funds in the Swissair bankruptcy, will get nothing,” he told Swiss TV.

The trial, held five years after Swissair’s demise, was designed to hold executives, board members and outside consultants to account for their actions.

Most refused to answer questions in court, but Mario Corti, chief executive and chairman of parent company SAirGroup from March 2001 until the grounding, used the proceedings as a springboard to mount a passionate defence.

The defendants blamed the Belgian government, the big Swiss banks and the September 11 terrorist attacks for the downfall of the national airline.

swissinfo with agencies

Key facts

There were 19 defendants, including 16 former members of the Swissair board and the company’s top management, plus three outside consultants who advised the airline.
The investigation took five years and produced 280 metres worth of documents. The prosecution’s indictment ran to 100 pages.
The Zurich cantonal prosecutor spent 40,000 working hours on the case, questioning 300 people and searching 20 houses.
According to the chief prosecutor, the costs of the investigation could total SFr4-5 million ($3-4 million), not including prosecution staff salaries.

In brief

Swissair planes were grounded in October 2001, after the company had been in business for 71 years.

The downturn in the aviation market after the terrorist attacks of September 11, 2001, proved the last straw for the heavily indebted Swissair, which folded the following year.

The airline collapsed because it over-extended itself by buying stakes in numerous loss-making airlines, including Belgium’s Sabena and Poland’s Lot, in an attempt to form its own airline alliance.

The remains of Swissair and the regional carrier Crossair were brought together in 2002 to form the new national carrier Swiss, which was in turn taken over by Germany’s Lufthansa in 2005.