Lufthansa to complete Swiss buyout early
Germany's Lufthansa will finalise the takeover of Swiss International Air Lines on July 1, several months earlier than previously indicated.
Lufthansa decided to acquire the remaining 51 per cent of shares needed for total ownership of Switzerland’s former national carrier following good financial results and the approval of all air traffic rights.
Within two weeks the Swiss airline that was set up partly with taxpayers’ money will be fully in German hands.
In March Swiss announced 2006 was its first full year of profit. In addition Switzerland recently secured air traffic rights for India, Hong Kong, Russia and Saudi Arabia.
These two conditions to a full takeover by Lufthansa were expected to take until at least the end of the year.
The German airline started the merger in 2005 and the financial benefits of the partnership stretched to a better-than-expected SFr300 million ($240 million) last year. Swiss became a member of the global airline consortium Star Alliance in April 2006, which also features Lufthansa.
“The assurances given when integration was announced have been more than honoured,” said Swiss chief executive Christoph Franz.
Separate identity
Lufthansa chief executive Wolfgang Mayrhuber reiterated that Swiss would retain its own unique identity despite being fully swallowed by its larger neighbour.
“The Swiss business model is a success. The airline is still heading for growth and progressing extremely well,” he said.
“Also in future Swiss with its own brand identity will further develop its strengths and expand its locational advantage in the Swiss market. Swiss will stay Swiss – also in partnership with Lufthansa.”
Swiss was born in 2002 out of the wreckage of former national carrier Swissair, that went bankrupt in October the previous year, and regional airline Crossair.
The Swiss government, some cantons and industry poured in more than SFr4 billion ($3.22 billion) to get the new airline off the ground. But Swiss was soon in financial difficulty, losing SFr980 million in its first year.
Restructuring complete
The government agreed to sell its 20.4 per cent stake and Canton Zurich its 10.2 per cent of shares to Lufthansa in March 2005 in a deal that valued Swiss at SFr500 million.
Swiss then underwent a major restructuring programme that slashed hundreds of jobs, reduced the fleet, involved tense industrial relations with some pilots and saw the birth of regional carrier Swiss European Air Lines.
But Franz announced the end of this programme earlier this year and said the airline would now look to expand.
Five long-haul aircraft and three short-haul planes have been or will shortly be added to Swiss’s 73-strong fleet.
swissinfo with agencies
Swiss achieved a SFr263 million ($211 million) net consolidated profit in 2006 – its first full year in the black.
The airline carried 10.5 million passengers to 70 destinations last year. Lufthansa flew 53.4 million passengers to 185 destinations.
Swiss International Air Lines was born in 2002 from the remains of bankrupt Swissair and the regional carrier Crossair.
The struggling Swiss was in turn taken over by Germany’s Lufthansa in 2005.
Lufthansa initially bought an 11% stake in Swiss in March 2005 and increased this share to 49% in 2006 once regulatory approval had been granted.
Lufthansa’s Swiss shares are held by a separate company, AirTrust, on behalf of the German airline.
The Swiss parliament has for the fourth time rejected calls for a public inquiry into the failure of former national airline Swissair.
The rightwing Swiss People’s Party initiative was thrown out on Thursday by 93 votes to 73.
The collapse of Swissair was the largest business failure in Switzerland and cost the taxpayer SFr2 billion ($1.6 billion), resulted in thousands of job losses and severely dented national pride.
A criminal trial of 19 former Swissair managers and advisors, accused of a variety of offences, cleared all defendants of wrongdoing earlier this month.
The Swissair liquidator has threatened to bring civil proceedings to sue former managers and executives for their involvement in the airline’s collapse.
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