The Red Cross: First Aid for the Swiss National Brand?

Some months ago, I wrote about the brand value of national reputation. Nations can be brands themselves, and the value set attached to these concepts can be used by brand builders. A key example was Switzerland. Let’s rethink the Swiss brand in light of recent events.

In the U.S., first it was Pan Am, now it’s TWA. Both once-formidable airline brands are now pages in history books. Three weeks ago, Swissair went into bankruptcy. This wasn’t a major shock. It had been in the cards for months, if not years. But Swissair’s demise was nevertheless unsettling. This consumer perception was underscored by the fact that this wasn’t any national airline, it was the Swiss one. Swiss coverage of the saga would lead you to believe that the Swiss view this as the biggest national image catastrophe since World War II.

Why the drama? The demise of an Australian carrier, Ansett Australia, happened unremarkably a few weeks before Swissair’s announcement. The widespread astonishment at Swissair’s collapse is because it is perceived to be evidence of weakness in the formerly unassailable Swiss brand.

Consider Switzerland. You form associations — the Swiss Army Knife, Swatch watches, the Red Cross, Nestlé, Rolex, UBS, Credit Suisse — a host of high-quality brands. They have reputations built on impeccable quality, stability, reliability, and integrity. A Swiss-branded item exacts your trust at a premium price. You pay that price because you appreciate the quality, because you believe nothing will go wrong.

On October 5, something went wrong. Swissair grounded its fleet when UBS and Credit Suisse First Boston said they would not aid their fellow brand. Thousands of Swissair passengers were stranded around the world. Many told the media their reason for flying Swissair was that, in turbulent, volatile times, it was the only airline they trusted. Loyal customers were stranded, their tickets worth less than the paper they were printed on. That Friday was every brand’s nightmare.

Swissair’s fate makes consumers, particularly in Europe, reconsider what Switzerland as a brand means. A friend recently joked that my Rolex watch probably never worked. If the Swiss can’t keep an airline aloft, how can they make a decent watch? A throwaway joke — but perhaps a new interpretation of the Swiss brand.

The Swissair collapse caused damage not only for the airline but also for other Swiss brands. Other European brands may also be adversely affected. Could many quality European products, once regarded as paragons of stability and quality, lose their hold on consumer trust?

Consumer belief in stability is shaken. Life is mutable, so trusting a brand for life may no longer be possible. Even the strongest brands, ones that seem to be part of life’s fabric, can disappear.

Swissair received a bailout last week from the government, Novartis, and Nestlé, enabling it to resume operations. But Crossair, a Swissair subsidiary, is taking over the bulk of its parent’s operations under its banner. The Crossair logo is almost identical to Swissair’s — both echo the national flag. Has this “Red Cross” first aid come too late to bolster the national brand? Time will tell.