http://www.examiner.ie/pport/web/ire...oxkB1js81w.asp 18/08/03
BA offers to take major stake in Swiss airline
BRITISH AIRWAYS is offering to take a major stake in Swiss International Air Lines, while Germany’s Lufthansa is eyeing a full takeover, a Swiss newspaper reports.
Quoting an internal source, the SonntagsZeitung said BA's participation in the loss-making Swiss carrier would be accompanied by an offer for Swiss to join the oneworld alliance, Swiss's goal since the airline was created in April 2002.
The paper said that at the same time, Swiss management had been to Frankfurt in recent days to discuss a firmed-up offer from Lufthansa to take over the airline
in full. Swiss has in the past said it was talking to Lufthansa, but declined to say what about. Swiss director Walter Bosch said on Saturday it was unlikely the board would decide on strategic options already at today's meeting ahead of first-half results due tomorrow but it should have made up its mind by month-end.
The airline, which has said it must find £228 million to keep flying into 2004, is expected to detail how it plans to tackle losses of millions of francs and survive in the airline industry.
Analysts say it must show progress on capacity reduction and cost-cutting measures to stand a chance of getting fresh cash from an outside investor and be invited to join an alliance.
Swiss public and private investors who helped launch Swiss with a 1.2 billion-franc capital injection have said that they had no interest in spending more money on the carrier whose earnings have suffered from slumping demand.
Swiss is trimming its network, laying off staff and grounding aircraft not only to boost efficiency and adjust costs to fallen revenues, but also to become an attractive alliance partner with an acceptable, unthreatening, market position.
BA in the past has kept Swiss out of the oneworld alliance, seeking to protect its own competitive position. Swiss paper Tages-Anzeiger said on Saturday that Swiss and Lufthansa were talking about an integration of Swiss into Lufthansa with Swiss keeping its brand, preserving the tell-tale red tail with white Swiss cross on its aircraft.
Swiss would get a slot in the Star Alliance in which the German airline is a key partner, keep its role as a premium carrier and be an independent unit within the Lufthansa group, which should help ease popular concern about the airline which as the successor to collapsed Swissair is a Swiss national icon