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Bigger alliance beckons SAirGroup

Joining the Oneworld airline alliance could bring needed business to Swissair and Crossair Keystone Archive

SAirGroup, owner of Swissair, is expected to join a major global airline alliance, following a change in corporate strategy triggered by the departure of its chief executive, Philippe Bruggisser, last month.

This content was published on February 21, 2001 - 10:25

SAirGroup is remaining tight-lipped about any potential alliance, but analysts say it is likely to link up with the Oneworld group, which includes SAirGroup's transatlantic partner, American Airlines, as well as British Airways.

"I think they will link up with Oneworld," said Zürcher Kantonalbank analyst Patrick Schwendimann. "I think they will keep the stakes in Lot and South African Airways for sure and perhaps Sabena."

SAirGroup last month announced plans to jettison its costly foreign expansion programme initiated by Bruggisser.

At present, the company heads the Qualiflyer alliance, which includes 11 smaller airlines, some of which are in financial difficulty.

At the end of January SAirGroup announced that it would continue with its two main pillars of airlines and airline related activities. However, it insisted that henceforth airlines would have to make a profit on their own and could no longer rely on subsidies from the airline related services.

Linking up with a bigger alliance would offer SAirGroup increased code sharing flights as well as a larger frequent flyer programme which should help fill its planes at a profit.

Already acting SAirGroup chairman and chief executive, Eric Honegger, has said that while SAirGroup is "moving forward" with its existing Qualiflyer pact, the company would also "explore other opportunities with other alliances".

On Monday, SAirGroup agreed with the Belgian government to inject €250 million (SFr483.4 million) into cash strapped Sabena after trade unions agreed to €52 million in cost cuts.

But SAirGroup, which has a 49.5 per cent stake in Sabena, refused to make a long-term commitment to Sabena.

"It will depend on a future alliance for SAirGroup. In the case of Oneworld it will depend on whether British Airways sees a benefit in cooperating with Sabena," Schwendimann said.

The future of SAirGroup's commitment to French airlines AOM/Air Liberte/Air Littoral is also under review.

Patrick Schwendimann believes the group activities in France could be sold off. However, Didier Winet, an investment bank and fund manager at Pictet believes it will depend on negotiations with and concessions by the labour unions.

swissinfo with agencies

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