Blog: You, us, everyone

The grounding of Air France-KLM

As a Swiss, I can’t stop thinking about the potential parallels between the predicament faced by Air France today and that faced by Swissair back in 2001. While the context is certainly not the same, the ultimate outcome could be. Let me explain: for a number of days in early October 2001, all of the Swissair carriers were grounded on the tarmac at Zurich Airport. Neither the Swiss government, or its population, or the company’s employees were asked if they were in agreement with the decision to declare bankruptcy. It was a fait-accompli; the result of a reality check.

So, 13 years after it was taken over by Lufthansa for a symbolic price, where is the company now?

Answer: According to my understanding, it’s definitely not worse off than before, in fact, maybe it’s even better today than in the past! The jobs have been preserved and it has even expanded its route network; and, despite the extraordinary developments in its history, which includes a foreign takeover, it remains today a Swiss company and nobody ever raises the question of its origin.

But what now of Air France? For several decades, this company has been bruised by the interests of the unions and its employees, compressed by legislative directives, and ultimately, exposed to fierce international competition. All attempts by the management to reorganize and adapt the company to the rules of the day, have bitterly failed. Quite simply, they were stifled. Hence, the idea of applying to Air France that which was also suffered by Swissair - since there is no other valid avenue open!

Downsizing and eventually closing down a business is part of the business life cycle: it doesn’t really make sense to start asking for everyone’s advice. The important point to grasp here is that this type of process can’t go on for a thousand years! So, it’s better Air France face the reality sooner rather than later. Changes will occur anyway, regardless of whether they want them to or not. Hence, the recommendation to proceed with the cost-cutting immediately, so that normal business can resume as quickly as possible.

Yet … I profoundly know that the French are not Swiss!