Annotated Bibliography The Collapse of Swissair

Question: Describe about the Annotated Bibliography for The Collapse of Swissair. Answer: Swissair was Switzerland major airline until 2001 when it was faced with bankruptcy due to mismanagement and poor investment decisions. Swissair was rocked with bankruptcy due to the incompetence of the board in making investment decisions, which led to the company investing in other airlines that were not profitable. As a result, the company accumulated debts that led to its bankruptcy in 2001. This paper will outline the views and analysis of different scholars and economist about the Swissair situation. Bonsu, Henry. (Thursday, 29 November 2001). A nation in shock: Swissair crisis. BBC News. Retrieved from news.bbc.co.uk This article by Bonsu Henry outline the views of different individuals associated with Swissair. First, Bonsu outlines the reason that led to the collapse of the airline citing their desire to become global players despite the fact that they were a small airline by then as the main reason. Bonsu then outlines the attempts of the airline to get funding from different financial institutions to no avail. Lack of funding led to the grounding of all planes to force hands of the government and financial institution to provide funding to the airline. The article concludes with tragic events that followed the collapse of Swissair that left the nation in shock. The article starts by pointing out the importance of Swissair to Switzerland. Then it shades light to the problems that led to the collapse and how different individuals view the collapse. The article then points out the effects of the collapse that include bankruptcy, grounding of the plane, and stranded passengers around the world. Furthermore, the author outlines the efforts made by the management to salvage the situation, but it was already out of hand. Finally, the article concludes with how the nation was placed in shock by the events that followed the collapse of Swissair. This offers insight into the events prior and after the collapse of Swissair. Thus, the article is useful as it offers a deeper understanding of the situation. Richter, Patrick. (13 October 2001). The Collapse of Swissair. World Socialist Web Site. Retrieved from wsws.org Patrick Richer outlines the attempt made by Swissair management to save its collapsing airline in 2001 and the effects the collapse had to the people for Switzerland. The collapse of Swissair left 39,000 passengers stranded all over the world. The collapse had caused an international event as passengers were witnessed crying on television. The media in Switzerland stated that the tragedy had damaged the image of the nation beyond repair. However, there were attempts by the management to save the situation before it went out of hand. The problems of the airline started when it recorded a loss of 2.9 billion francs in 2000. This loss consumed all the reserves of the company. As a result, the debt of the firm went from 6.8 billion to 15 billion within a year. This was a result of liberalization and deregulation of airline market that intensified competition in the market. In an attempt to remain relevant and make profits in the market. The company made losses because the passengers numb er did not increase coupled with the salaries and high numbers of employees. The company was spending more than it was receiving. An attempt to get funding for national banks failed and it painted a bad picture of the bank to the country, which led to people closing their accounts with the banks. This article is important since it outlines the attempts made to salvage the company from its crisis. Moreover, the paper gives an insight of the events that led to the collapse of the airline. Thus, this article can offer information that can help in answering questions of the attempts made to salvage the airline. Eisinger Jesse. (October 5, 2001). Swissair`s Recent Collapse Offers Lessons to Investors. The Wall Street Journal. Retrieved from wsj.com Eisinger Jesse outlines the lessons investors should learn from the collapse of Swissair. The author outlines important lessons that come from the collapse of Swissair. Eisinger states that investors should take note of valuation techniques. Lesson one investors should learn from Swissair is sum-of-the-part valuation does not take into consideration tax effects among other factors, and thus investors should measure the return on free cash flow to get the real valuation. Lesson two states that investors should avoid companies that are acquirers. This is because Swissair tried to buy second-tier airlines that led to massive losses. Lesson three outlines there cannot help always; this is because Swissair tried to get a bailout from the Swiss government, but it did not. Finally, Eisinger points out that companies should not put faith in managers for outside the industry. This is because the best managers usually experience the hardest fall. This article outlines the lessons that investors should learn from the collapse of Swissair. This is important because it gives an insight into the events that led to the collapse of Swissair. Moreover, this article breaks down the different aspects of management that Swissair did not pay attention to, which led to losses, and eventually collapse of the company. Ottawa Business Journal. (October 11, 2001). Swissair gets creditor protection in Canada, U.S. Ottawa Business Journal. Retrieved from obj.ca The article reiterates the mismanagement of resources by Swissair board that led to the collapse of the company. The article points out the attempts made to buy out the company from U.S. buyout firm Texas Pacific Group. This was communicated through Switzerland largest bank. The article further emphasizes the fact that Swissair once the bride of the country has tarnished the image of the country as one of the most embarrassing corporate failures. In addition to this, the article points out how Crossair a regional subsidiary took over the operations of Swissair in a shakeup organized by the Credit Suisse and UBS both Swiss banks. Under Chapter 11bankrupcy protection, a company can continue its business free the claims of creditors. Moreover, the article concludes by stating that Texas Pacific offered US$7 billion to take over Swissair. Ideally, this article offers additional information by stating the fact that there was interest from outside Switzerland to take over Swissair. This offers an insight into the saga that surrounded the collapse of Swissair. Moreover, this information helps understand the magnitude and effects of Swissair collapse. All About Switzerland (2005). Swissair Grounding The article outlines the effects of the collapse to Switzerland. The article starts by outlining the rich history of Swissair. It describes the airline as an embodiment of traditional Swiss virtues like reliability, solidarity, and technical innovations. The embodiment of Swiss culture was evident on the white cross on the tail of Swissair aircraft, which elicited patriotic feeling in many Swiss nationals traveling with the airline. Thus, it appeared as a shame to many people including politicians when the airline collapsed. The article went further to outline the success the company has enjoyed over the year and the milestone it had achieved. This include the merger of Ad Astra Aero and Blair to form Swissair, a planned merger between Swissair and Austrian Airlines in 1967. Moreover, the article outlines the failure and rise of competition for Swissair including the formation of Crossair airline by former Swissair pilot Moritz Suter. This article is important because it outlines the history of Swissair its success and failure over the years. This article offers an understating of the company since its beginning in its fall and can help understand why the board members decided to make drastic decisions that led to the collapse of the company. Research Objectives Understanding the factors that contribute to the fall of Swissair Effects of the collapse of Swissair The reaction of the public to the collapse of Swissair References "BBC NEWS | Programmes | Crossing Continents | A Nation In Shock: Swissair Crisis." 2001. News.Bbc.Co.Uk. https://news.bbc.co.uk/2/hi/programmes/crossing_continents/1677085.stm. Eisinger, Jesse. 2001. "Swissair's Recent Collapseoffers Lessons To Investors". WSJ. https://www.wsj.com/articles/SB1002229241778311240. Markus G. Jud, Switzerland. 2016. "Swissair - Rise and Grounding Of A Once Famous Airline." Swiss-Economy-Business.All-About-Switzerland.Info. https://swiss-economy-business.all-about-switzerland.info/swissair-history-grounding-2001.html. Richter, Patrick. 2001. "The Collapse Of Swissair - World Socialist Web Site." Wsws.Org. https://www.wsws.org/en/articles/2001/10/swis-o13.html. "Swissair Gets Creditor Protection In Canada, U.S. - Archives - Ottawa Business Journal". 2016. Obj.Ca. https://www.obj.ca/Other/Archives/2001-10-11/article-2158340/Swissair-gets-creditor-protection-in-Canada,-U.S./1.