Commission Criticizes Swissair Management



ZURICH, Switzerland - The leadership of the now defunct Swiss flag
carrier Swissair made serious mistakes prior to the airline's
collapse, but it is unclear whether this will have any legal
consequences, an official report said Friday.


In a long-awaited 3,300 page report, the management consultancy firm
Ernst & Young said the sudden grounding of the carrier on Oct. 2,
2001 — leaving thousands of passengers stranded — was unnecessary
because Swissair had 123 million Swiss francs (then worth $76.9
million) at its disposal, and not just the 14.5 million francs it
claimed.

Swissair's parent company SAirGroup was heavily indebted at the end
of 2000. But the company's accounting practices masked the gravity of
the financial crisis, the report said. It criticized Swissair's board
and its auditors for being negligent.

It also said that Swissair, by taking sizable stakes in troubled
European carriers, failed to comply with its own strategy calling for
minority holdings of 10 percent to 30 percent.

The law firm overseeing Swissair's liquidation, Wenger Plattner, said
the report would be studied in depth before any decision was taken on
possible legal action against Swissair's former management. A
decision would not be made until the second half of the year, it
said.

Swissair was long a symbol of reliability and quality. After its
abrupt demise, the Swiss government and big banks were forced to
inject billions of dollars into a new airline, called Swiss.

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