The beginning of the 1990's marked a decisive period for Swissair, one that would ultimately lead to its collapse 10 years later. This period began in the shadow of the December 1992 Swiss referendum, where voters rejected joining the European Economic Area. This isolation forced Swissair into a strategic corner, as it was suddenly denied the "open skies" benefits enjoyed by EU-based carriers. To counter this, in 1993, Swissair initiated the "Alcazar" project, an ambitious attempt to merge with KLM, SAS, and Austrian Airlines into a single pan-European giant. However, by late 1993, these negotiations collapsed.

Following the failure of Alcazar, the airline shifted its focus toward securing a foothold within the EU through direct investment, a period characterized by the purchase of a 49.5% stake in the Belgian national carrier Sabena in 1995. During these years, the fleet underwent a modernization phase to support long-haul expansion and operational efficiency. The airline began phasing out older Fokker 100s and McDonnell Douglas MD-80 series aircraft in favour of the newer Airbus A320 in May 1995 and the A319 in April 1996 for short-haul routes. For its prestigious long-haul network, Swissair heavily relied on the McDonnell Douglas MD-11, which became the backbone of its intercontinental service, alongside the Boeing 747-300.

By 1996 and 1997, under the leadership of Philippe Bruggisser, the airline sought to transform Swissair into a dominant European power by acquiring minority stakes in smaller or struggling airlines, creating a "Quality Alliance" that could rival the emerging Star Alliance. This led to the formation of the SAirGroup in 1997, a holding structure designed to separate the flight operations from the company's more profitable service sectors, such as catering (Gate Gourmet) and ground handling (Swissport). The network expanded aggressively during this window; in 1993 and 1994, Swissair launched or reinforced routes to destinations such as Ljubljana, Izmir, and Lyon, while also inaugurating non-stop service from Zurich to Los Angeles, Seoul and Tokyo.

By 1998 the SAirGroup appeared robust on paper, reporting a profit of 361 million Swiss francs that year, largely bolstered by its non-aviation subsidiaries. However, the operational reality was marred by the crash of Swissair Flight 111 on September 2, 1998. The MD-11, flying from New York to Geneva, crashed into the Atlantic Ocean off the coast of Nova Scotia, Canada, killing all 229 people on board. The subsequent investigation identified a fire caused by faulty wiring in the cockpit’s in-flight entertainment system, which ignited flammable insulation blankets. This event not only devastated the airline's impeccable safety reputation but also placed an immense financial and psychological strain on the company at a moment when its capital was being heavily diverted into its risky acquisition spree.

By the end of 1998, the combination of the Flight 111 catastrophe and the mounting debt from the Sabena investment had created the fragile conditions that would lead to its eventual grounding and collapse three years later.

On the 4th September 1998, Swissair started to receive the first of an order of 16 Airbus A330-200. Sadly for the airline, the new airframes, arrived just a little too late as they quickly replaced older MD-11 on long haul routes and try to save the airline from its image aftermath from the crash of the MD-11.

In 1999, Swissair expanded its regional operations through its "Swissair Express" marketing brand and its partnership with Crossair, integrating additional BAe 146/Avro RJ series aircraft to bolster its European network. Notably, on September 6, 1999, the airline took delivery of the first Avro RJ100.

By June 2000, it was predicted that Swissair would lose between CHF 3.25 billion and 4.45 billion over the next three fiscal years. The management however maintained in classical restructuring, the Board approved the reorganisation of LTU, which Swissair was a shareholder, in the amount of approximately CHF 500 million. In addition, there were plans to take over Alitalia.

In summer 2000, the CEO Philippe Bruggisser came under public pressure, as the press published the financial situation of the group. Swissair and Sabena were each losing one million francs per day, and another million were lost every day at LTU and the French investments. As a solution, Swissair looked to withdraw from their foreign investments.

In March 2001, two studies by consultants were presented to the Board, which showed the financial difficulties of SAirGroup. At this point, the Directors resigned. The buying spree created a major cash flow crisis for parent company SAirGroup, and was exacerbated by the environment caused by the September 11 attacks in 2001.

Unable to make payments to creditors on its large debt, on 2 October 2001 the entire Swissair fleet was abruptly grounded. This led to the cancellation of over 230 flights, and thousands of passengers, as well a flight crews, being stranded around the world.

Flight crew corporate credit cards were blocked by the banks, with some hotels expelling the crews, and having them return home at their own expense. In addition, all future tickets sold were voided.

On the other side of the coin, Crossair shares were only reissued on the evening of 2 October due the rewriting of Crossair shares, with their purchase price not arriving until the following day – the setting of flight operations – into the SAirLines account.

SAirGroup's stake in Crossair was sold to the Swiss banks UBS and Credit Suisse. Furthermore, Crossair took over various assets of former Swissair, including its employees, aircraft and most European routes. Swissair and the SAirGroup were handed over to the liquidation firm of Jürg Hoss Liquidators, and ceased operations on 31 March 2002.

Crossair was then renamed Swiss International Air Lines, or Swiss for short, and took over Swissair's intercontinental routes on 1 April 2002, officially ending 71 years of Swissair Service.

Swiss International Air Lines was then taken over by the German airline Lufthansa in 2005. For Swissair's holding company SAirGroup AG, it finally completed its liquidation proceedings, which lasted over two decades, in 2024.

You can continue reading the history of SWISS as it carries on flying today under the Lufthansa Group.