Johnnybgoode From Germany, joined Jan 2001, 2187 posts, RR: 6 Posted (11 years 11 months 1 day 9 hours ago) and read 11683 times:
i just wanted to provide some facts on how LH wants to takeover LX. i know that this very topic has been discussed several times, but for those who are looking for some precise information at one glance, i just wanted to provide a short overview of what i think seems to be very interesting move of taking over another airline.
accoding to Reuters and other sources (NZZ), LH´s board might soon foward the following take over-plan to LX:
* LX must get another 500 million Swiss franc ($351.9 million) injection of capital from its shareholders
* in return, LH would promise to pay back 300 million francs to Swiss investors via profit-sharing or dividends and the other 200 million in the form of options on Lufthansa shares
* the options would be exercisable in 2010 and give Swiss shareholders a seven percent stake in Lufthansa, making them the biggest minority investors in LH
* as reported several times, LH would integrate LX into its own network and have operational control
* it would keep the LX brand and maintain Zurich as a hub in addition to its own Frankfurt and Munich hubs
* as an additional prerequisite for this deal, LX must found a company which is required to sell surplus aircraft of LX´ fleet
currently, LX' biggest shareholders are the Swiss federal government with a 20.4 percent stake, UBS with 10.4 percent, the canton of Zurich with 10.2 percent and Credit Suisse Group with 10 percent.
it remains unclear whether they would be willing to stump up additional money - especially before parliamentary elections next month - to follow up on the public/private rescue of a national airline after Swissair collapsed in 2001.
however, it does seem unlikely that those shareholders regard the mere membership of LX in oneworld as viable means to return LX to profitibality.
StarFlyer From Germany, joined Sep 2002, 987 posts, RR: 1
Reply 1, posted (11 years 11 months 1 day 8 hours ago) and read 11630 times:
Keeping the brand and Zurich as a hub? Sounds like they are just saying that to calm the Swiss people, but to me both dont make sense.
Why keep a second corporate ID when LH's reputation is so much better and the marketing could be combined! Also the Zurich hub would really have to go as LH has just invested big money in MUC which is rather close.
Great for competition: The German, Austrian and Swiss national carriers will all be cooperating. Wonder if this is even going to get approval from the competition watchdogs.
BAJMowiec From United States of America, joined Aug 2003, 99 posts, RR: 0
Reply 4, posted (11 years 11 months 1 day 8 hours ago) and read 11544 times:
I see possibilities here, if ''Lufa'' takes over LX, and that merger practically makes it one airline, then, like someone here said, AUA would chip in, and guess, what do you have then ? A big, really big all-Germanic airline, sort of like SAS, which incorporates Denmark , Sweden and Norway into one ! Any names for an airline like that ? Germania is taken ... It's just a thought, anyone else shares my view? Any comments?
RJ100 From Switzerland, joined Nov 2000, 4132 posts, RR: 27
Reply 5, posted (11 years 11 months 1 day 7 hours ago) and read 11531 times:
Strange, I have always thought that "NZZ am Sonntag" is the most reliable Sunday newspaper in Switzerland...so maybe this is going to happen!?
I still think that the Oneworld option is the better way to go. BA has slot problems in London and therefore would be more interested to keep a Swiss hub than Lufthansa that is promoting the Munich hub...
Mozart From Luxembourg, joined Aug 2003, 2281 posts, RR: 12
Reply 7, posted (11 years 11 months 1 day 7 hours ago) and read 11462 times:
I don't believe the "Germanic-equivalent-of-SAS" solution where OS, LX and LH merge. There is a cultural issue: the Scandinavians get on with each other, whereas the Swiss and the Austrians have "mixed feelings" to say the least about Germans. Lufthansa would be considered a German takeover and thus resented, especially in Switzerland. It is as if the US took over Mexico.
UA 777 From , joined Dec 1969, posts, RR:
Reply 8, posted (11 years 11 months 1 day 6 hours ago) and read 11419 times:
BAJMowiec: I see possibilities here, if ''Lufa'' takes over LX, and that merger practically makes it one airline, then, like someone here said, AUA would chip in, and guess, what do you have then ? A big, really big all-Germanic airline, sort of like SAS, which incorporates Denmark , Sweden and Norway into one ! Any names for an airline like that ? Germania is taken ... It's just a thought, anyone else shares my view? Any comments?
I disagree with you because I think it would be much wiser for LH to not let LX or OS disappear but make them a part of their network. They did the same with Air Dolomiti and it seems to be going very well. An independant product does not necessarily take away market share from LH but might open new markets for them.
CPH-R From Denmark, joined May 2001, 6279 posts, RR: 3
Reply 10, posted (11 years 11 months 1 day 6 hours ago) and read 11369 times:
One has to ask the questions: How big is LX's route network compared to LH's? It seems to me that LH's route network is that much bigger than LX's - and that if Lufti did take over LX, it would become a sort of feeder, where LX would bring passengers to the ZRH hub and then feed it on to FRA og MUC. Perhaps with a PrivatAir operation or two to cater for the business traffic going to/from Switzerland.
Andreas From Germany, joined Oct 2001, 6104 posts, RR: 30
Reply 11, posted (11 years 11 months 1 day 6 hours ago) and read 11366 times:
If I remember correctly, the oneworld solution means a shareholding of BA and then membership in Oneworld...what would one expect to gain from such a solution?
Some sort of independence for a Swiss national carrier?
Forget it, Swiss tried twice and screwed it up royally, so there are things now to be taken into account that have nothing to do with national feelings.
Swiss government needs a solution, and a quick one, Swiss on a standalone basis is not able to survive, that is a given fact now, so they need alternatives, a clear, not-too-expensive alternative exit, because (correct me if I'm wrong) there are budget restraints in Switzerland, too, and the government is not willing to pay any more trials to keep Swiss alive.
The LH solution provides exactly that...a getaway from the problem, with one-off costs in an acceptable amount PLUS sort of an equity kicker, and a management solution that has repeatedly proven to be able to solve problems such as the ones of Swiss.
If BA really wants to grab Swiss, they need to offer the same as LH, just a little cheaper...that's it!
Merger? Why that, there's really no need, and merge what? LH takes over Swiss, period, OS is another case! Yet these are valuable brand names that one should not destroy without need, and I don't see any need to do so!
Mozart, when money comes onstage, national feelings get kicked out of the door quite efficiently, and that is a good solution!
DoorsToManual From , joined Dec 1969, posts, RR:
Reply 12, posted (11 years 11 months 1 day 5 hours ago) and read 11305 times:
Well, it was interesting to read Mozart's comments in a period when many are asking for closer ties throughout the EU....I'm not criticising your remarks Mozart, but I do think they were very interesting! I had the impression that most Europeans were happy and comfortable and didn't resent each other.....are cultural issues important? Probably, but others seem to think there are other priorities at the minute.
Star_member From Australia, joined Dec 2000, 185 posts, RR: 0
Reply 13, posted (11 years 11 months 1 day 5 hours ago) and read 11239 times:
it would be great if this deal goes ahead. i don't see the point of lh phasing out lx. the swiss brand is a good one despite the recent financial turmoils and bankruptcy. internationally, there is still a strong perception of an excellent product when we use the swiss brand. i think zurich will continue to have some key long haul routes eg new york, singapore, tokyo, london etc but many of the african routes will disappear and merged with lh. hope it all happens, swiss will be a good addition to star alliance
Johnnybgoode From Germany, joined Jan 2001, 2187 posts, RR: 6
Reply 14, posted (11 years 11 months 1 day ago) and read 11138 times:
i second the opinion of Andreas, you hit on the nail!
and about national feelings. as i basically understand that some Austrian and Swiss people might resent the fact that their "national" airline might be taken over or controlled by a German airline, i think this would be a major step towards consolidation of the european airline industry, which is badly needed. we must stop restricting our minds by fences and borders.
it´s happenend in the US, and it is about to start here. there´s too much airlines, and especially in weak markets.
and from that point of view, i´m sure that no board member or member of higher management at LX and OS would stand in the way of integrating their airline with Lufthansa (except maybe for loosing their job) since those stand a much better chance of success than failed attempts such as KLM/Alitalia. it´s hard to combine airlines/companies with different corporate cultures, thus, imho, Swiss and Lufthansa fit together nicely.
If only pure sweetness was offered, why's this bitter taste left in my mouth.
Dutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 56
Reply 16, posted (11 years 11 months 23 hours ago) and read 11071 times:
This deal is likely to happen for many reasons, the most important being that the Swiss will still have an airline and vital air services in and out of Zurich and the financial mess created by SR and LX will be over with, once and for all. And, the airline being owned by Lufthansa almost guarantees that the Swiss airline will survive. Its becoming clear that LX is headed for major trouble, and if this deal can be closed in the near-term future, it will avoid a lot of turmoil. As mentioned above, rationalization is needed in the European airline industry, especially with LCC becoming a larger part of the intra-european landscape, and its no longer possible for each country to sponsor a full service airline serving destinations all over the world.
Three interesting questions remain:
1. The fleet - I guess LH will pick and choose from the existing LX fleet, I wonder which types and aircraft they will take and what will be sold off? What about the A343s that SR has on order? Will LH convert the MD11s to cargo aircraft for LH Cargo? And, what about all of those regional aircraft?
2. Zurich - although the deal calls for Zurich to remain a hub in the combined airline network, will Zurich be a complete hub retaining service to cities all over the world, or will Zurich concentrate on certain regions, say moving passengers from Germany/Western Europe to destinations in Eastern Europe and capital cities in the former USSR republics and maybe Africa? I imagine some interncontinental service will remain: to key destinations such as JFK, BOS, SIN, NRT, but I do not imagine LH will create a network where Munich and Zurich directly compete with eachother.
2. Geneva - the forgetten city: at a certain point, Swissair elected to make Zurich its central hub and dropped almost all long haul service out of Geneva (I believe that only the JFK-GVA flight remained), LX has not focused on GVA, I wonder what LH will have in mind for services in and out of Geneva?
N79969 From , joined Dec 1969, posts, RR:
Reply 17, posted (11 years 11 months 23 hours ago) and read 11049 times:
I think looking at the TWA/AA merger is useful here. While AA kept STL alive for a while, they are slowly de-hubbing from that airport. I do not believe LH will want to run what would still be a competing intercontinental network with a hub in such close proximity to its own hubs.
I think Zurich will become a very well-served spoke for Lufthansa ultimately. However, I don't think this will completely occur until the EU consolidates power and negotiates an US-EU Open-Skies (with the UK carved out).
Because of Zurich's importance, I think it will be served even without a carrier based at the airport.
RJ100 From Switzerland, joined Nov 2000, 4132 posts, RR: 27
Reply 18, posted (11 years 11 months 23 hours ago) and read 11022 times:
@N79969: To be honest, I think the Zurich hub will once again be downgraded (LH already mentioned that cost cutting is needed if they take over LX), and LH / LFSB), France">BSL and GVA will not see more than feeder services to German airports and maybe some direct services to the big European centers...
CV990 From , joined Dec 1969, posts, RR:
Reply 19, posted (11 years 11 months 19 hours ago) and read 10956 times:
Until I see some words said in SWISS homepage about a possible merger I'm not going to discuss this matter, this all seems too vague. If SWISS is going to go forward an alliance I see them going to BA than to LH. My personal feeling!
Regards and I'm still waiting for a comment from SWISS!
Goose From Canada, joined Aug 2003, 1840 posts, RR: 14
Reply 20, posted (11 years 11 months 19 hours ago) and read 10947 times:
A big, really big all-Germanic airline, sort of like SAS, which incorporates Denmark , Sweden and Norway into one ! Any names for an airline like that ?
I can see the ads now....
We're German. And so are you.
As for the promises made to keep Swiss independantly branded, employed and so on.... well, it can be kept on the same pile as the promises to keep Canadian independantly branded, with its own management and employees, as a part of the "Air Canada family of Airlines."
CV990 From , joined Dec 1969, posts, RR:
Reply 22, posted (11 years 11 months 17 hours ago) and read 10873 times:
I really don't think swiss citizens will like everytime they need to make an intercontinental flight go from ZRH to FRA or MUC to go abroad. I think swiss people and SWISS Board of Directors that EVENTUALLY deal with that matter must have a little bit of pride NOT to let ZRH close their intercontinental flights! I would much better believe that SOME intercontinental flights would be directed via FRA and MUC but not all of them.
Andreas From Germany, joined Oct 2001, 6104 posts, RR: 30
Reply 23, posted (11 years 11 months 15 hours ago) and read 10828 times:
CV990: Afaik, the current board already spoke out loud that they prefer the LH version, I semm to remember an interview with the CEO.
You like Swiss to join Oneworld because you prefer Oneworld to Star? Very well, unfortunately you won't be able to feed the money into Swiss that is needed to keep the company afloat so to speak. Please keep in mind: we are talking survival or not here...and this to decide lies no more in the hands of the swiss management..deservedly so, after two major screw-ups!
As for strategy: I don't see LH closing down ZRH, it's a major financial center, and the government of Switzerland will in any case of takeover make absolutely clear that ZRH will remain that way. And why would LH want to do it? There's business travel, international finance community, people who are prepared to pay well for their tickets, exactly the clientele LH attracts, too. They'll never re-connect via FRA or MUC if it costs them 3 hours more.
But enough speculation, let's wait and see, it won't take long, I presume.
Flying-Tiger From Germany, joined Aug 1999, 4180 posts, RR: 35
Reply 24, posted (11 years 11 months 14 hours ago) and read 10814 times:
Some long-hauls to remain in ZRH to the important STAR hubs and to New York, all other long-hauls to move to MUC and FRA, especially Africa. Swiss Regional probably to become another part of Lufthansa Regional but maybe split up with the ARJs going to EW/CL, the ERJs to leave the fleet in favour of CRJs, the Saabs replaced by Dashs or ATRs by Contact Air or Augsburg Airways. More conections to the existing STAR hubs in Europe, especially to FRA and MUC plus additional in-betweens when interesting.
The A340s to be kept, the MD-11s probably converted or sold-off, depending on GEC´s needs. The A330-200s to be integrated into LH´s fleet. Several A319CJ/BBJ flights to start from ZRH and GVA. Embraer 170/190 order most likely to be cancelled.