Lufthansa will start integrating the operations of Swiss International Air Lines into its network from 30 October under the terms of an up to €300 million ($400 million) takeover deal approved last week.

The merger will see Lufthansa compete neck and neck with Air France to be Europe's largest airline group, with each posting annual revenues of about €19 billion, far ahead of third-placed British Airways at €11.5 billion.

The boards of Lufthansa and Swiss, and the Swiss government, have given the go-ahead for the first phase of the plan that will lead to the takeover of Swiss by Lufthansa by 2007. By the end of this month Lufthansa plans to take an 11% stake in AirTrust, a company set up to hold Swiss's shares, to comply with anti-trust laws and secure traffic rights.

The acquisition will happen in several steps. In the second phase, subject to anti-trust clearance, Lufthansa's stake in AirTrust will increase to 49%, probably during the third quarter. Negotiations to secure air traffic rights will take place simultaneously.

Lufthansa says the Swiss government will begin negotiations for traffic rights immediately, and the airlines are awaiting anti-trust approval. They will maintain their own fleets and pilots, with "no exchange", says Lufthansa.


Source: Flight International