Future of Swiss to be decided next week

It's not clear whether Lufthansa would retain Zurich airport as a hub following a merger with Swiss Keystone

The government says it will decide on Tuesday whether to allow Lufthansa to take over the national airline, Swiss, amid growing opposition to the sale at home.

This content was published on March 18, 2005 minutes

The announcement came as Swiss CEO Christoph Franz told unions he could provide no job guarantees for the airline’s 6,000 employees following a link-up with the German carrier.

Public opposition to the planned merger appears to be growing in Switzerland following reports that Lufthansa would secure loss-making Swiss for a knockdown price.

The government announcement followed talks between finance minister Hans-Rudolf Merz and the heads of the four parties in government.

"The cabinet is evaluating the Lufthansa offer, and the strategic alternatives for Swiss from the point of view of transport policy, economic and financial aspects," the finance ministry said in a statement on Friday.

It also confirmed that the boards of both Swiss and Lufthansa would meet separately on Tuesday. The government will announce its decision following those meetings.


Shareholders in Swiss met on Monday to discuss the proposed deal, but made no public comment afterwards. The government is the airline’s largest shareholder, and pumped around SFr600 million ($515.9 million) into Swiss when it was formed in 2002.

Other big shareholders include the banks UBS and Credit Suisse and major Swiss companies Nestlé, Roche and Novartis. The main shareholders are believed to be generally in favour of a merger between Swiss and Lufthansa.

Some members of parliament have demanded that it should have a say in whether the sale goes ahead, but the finance ministry stressed that "the decision lies with the cabinet alone".

Analysts say the planned sale is likely to happen, but warned that with opposition to it growing in Switzerland it could still fall through.

Rescue bid

Friday’s newspapers carried full-page adverts in which two Swiss lawyers argued that the airline was being "given away" and called on investors to come forward to help them form a holding company to take control of it.

Jürg Brand and Marius Grossenbacher said would-be investors would have to contribute a minimum of SFr10,000 each.

On Friday, Swiss CEO Franz met unions to discuss the airline’s future. Afterwards union representatives said he had been unable to provide any guarantees that the company’s around 6,000 jobs would be safeguarded.

But Daniel Vischer of the public service union said there was no reason to fear a large-scale relocation of jobs to Germany in the event of a company tie-up.

swissinfo with agencies

Key facts

Swiss has a current market value of around SFr500 million.
The airline's book value is estimated at SFr850 million.
In 2004 it made a net loss of SFr140 million.
In the same year, Lufthansa made a provisional net profit of €400 million (SFr620 million).

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