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Airlines


Swiss takes off into the future with Lufthansa
April 2005 324

The supervisory board of Deutsche Lufthansa and the board of directors of Swiss International Air Lines (Swiss) have approved the business model jointly developed by both companies for the takeover and integration of Swiss into the Lufthansa Group.

The Swiss Confederation, the Canton Zurich, and other large shareholders support the transaction. So far, a corresponding approval has been obtained from more than 80 per cent of the SWISS share capital. Lufthansa’s chairman and CEO Wolfgang Mayrhuber and SWISS President and CEO Christoph Franz signed the Integration Agreement in Zurich last month.
Mayrhuber emphasized the benefits of the integration for both airlines: “Lufthansa and Swiss, two world-renowned airlines with a strong sense of quality and service are joining forces. The most important aspect of the integration is that it will produce clear benefits for our customers. More destinations, better connections, comprehensive frequent-flyer programs and mutual lounge access enhance the attractiveness of both companies. The merger is not only good for Switzerland and Germany; it is also beneficial for our Star Alliance partners and strengthens the European aviation sector.”
Franz commented on the successful conclusion of negotiations with Lufthansa: “As a member of the Lufthansa Group, Swiss will be able to permanently fulfill its task even better of connecting Switzerland with the world. Swiss will become even more attractive for its customers with expanded services through  integration into this leading network, coordinated flight plans, and access to the lounges of Lufthansa and its partners. The creation of a competitive cost structure will, however, continue to provide the basis for a positive development of Swiss.”
Swiss will, therefore, continue to pursue the restructuring programme announced in January 2005. The company still intends to conclude the negotiations on new general labour agreements rapidly, on the lines of the pay accord reached recently weekend with three ground worker unions. “The Integration Agreement ensures fair development of the Zurich hub, the size of our long-haul fleet, the quality brand Swiss, and the continued existence of Swiss as an operating airline based in Switzerland,” said Franz.
In order to preserve the Swiss air traffic infrastructure for the long term, an independent foundation will be established under Swiss law for a period of ten years, which will be able to propose a member to the Lufthansa supervisory board and two members to the Swiss board of directors.
Lufthansa will further expand its position as an internationally leading network carrier by integrating Swiss. Through its access to an attractive market with great economic strength and by harmonizing traffic between the neighbouring countries, Lufthansa will strengthen its competitive position permanently. Already from the 2005/06 winter flight schedule onwards, the customers of both companies will be offered an expanded global service.
The takeover creates significant synergies both on the revenue and on the cost side, which will gradually increase and amount to about Euro 160 million per year from 2007 onwards.
According to the jointly developed business model, Swiss is to remain a mostly independent airline with its management and seat in Switzerland, its own fleet and crew, managed within the Lufthansa system as a profit center. Swiss will keep its own brand appearance, continue to develop its strengths, und expand its locational advantage on the Swiss market.




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