dambuster
Posts: 109
Joined: Sun Nov 05, 2006 7:49 am

LX: A Shame...

Thu Nov 16, 2006 5:19 am

Hi

I haven't found any topics that would directly answer my question, so I posted it in a new one.
Obviously many big national airlines are now private (i.e. not state subsidized) Swiss is one of them, they now belong to LH, so can the "Conseil Fédéral" pretend LX is the national carrier? AFAIK, it doesn't belong to the Swiss so why should they say it's the national carrier???
I know that to start with SR was private etc... still IMO it's ridiculous to pretend it's the national carrier and not care about it not help it nothing until it falls in foreign hands... Don't shoot me, I have the right to have my opinion!
 
jimyvr
Posts: 1597
Joined: Wed Nov 01, 2006 1:08 pm

RE: LX: A Shame...

Thu Nov 16, 2006 5:27 am

The reality is, is a national pride more important or positive financial status more important?

One could argue national pride is more important, but face it, if that's the reason to run a business (and if you can't run it correctly or it just keeps missing the target by your own people), it's not gonna work, unless you're EK or SQ.
1000 - 01MAR07 | http://airlineroute.blogspot.com/
 
ZRH
Posts: 4371
Joined: Tue Nov 16, 1999 11:32 pm

RE: LX: A Shame...

Thu Nov 16, 2006 5:37 am

Wake up. There is no such a thing as a so called national carrier any more. Swiss governement does not call it like this. Only the economic situation is important. Therefore the LH solution was probably the best. It would be absolute crazy to spend more tax money for an airline. And BTW it is not allowed anymore by WTO and EU laws.
 
dambuster
Posts: 109
Joined: Sun Nov 05, 2006 7:49 am

RE: LX: A Shame...

Thu Nov 16, 2006 5:49 am

Quoting ZRH (Reply 2):
Therefore the LH solution was probably the best. It would be absolute crazy to spend more tax money for an airline. And BTW it is not allowed anymore by WTO and EU laws.

Well too bad! EU laws really suck, especially that Switzerland isn't part of the EU, I hope that soon enough this whole none national carrier thing jumps back into their faces in some sort of economic problems...
Err, I think that there are still some airlines that are supported by their governments...
Also, I don't know about you but all those taxes they take from us, I find it a bit mysterious where they go...  scratchchin  If it's for their darn AVS they can forget it! Anyway I'd find it quite logical that they restore this rule and allow subsidies, aviation shouldn't be different in this field than other means of transport.
 
PanHAM
Posts: 8530
Joined: Fri May 06, 2005 6:44 pm

RE: LX: A Shame...

Thu Nov 16, 2006 6:03 am

Quoting Dambuster (Reply 3):

Well too bad! EU laws really suc

That's what we all say

Quoting Dambuster (Reply 3):
especially that Switzerland isn't part of the EU

de facto you are and believe me, it's better for Switzerland to have all these agreements which allow Swiss carriers to fly from anywhere in the EU to anywhere in the EU



Quoting Dambuster (Reply 3):
t! Anyway I'd find it quite logical that they restore this rule and allow subsidies, aviation shouldn't be different in this field than other means of transpor

what do you mean? Rail infrastructure is subsidised for good reasons, rail transport is not. Neither is road transport, why should air transport be subsidised? Be happy that LX is beginning to prosper again. The LH deal is good for them, it brings them additional customers. I use LX on Sunday transiting through ZRH, I would not have done that if they were not in M&M.
powered by Eierlikör
 
ZRH
Posts: 4371
Joined: Tue Nov 16, 1999 11:32 pm

RE: LX: A Shame...

Thu Nov 16, 2006 6:04 am

Quoting Dambuster (Reply 3):
Err, I think that there are still some airlines that are supported by their governments...

Officially not. This is also the problem of AZ. But honestly most governments find half legal ways to subside their airlines. But why do you wish that? There is no reason to do it. Aviation became a business as any other and there is no reason for governments to spend money. We don't want to have a situation like with the farmers.
 
abrelosojos
Posts: 4049
Joined: Sun May 29, 2005 6:48 am

RE: LX: A Shame...

Thu Nov 16, 2006 6:09 am

Quoting ZRH (Reply 2):
And BTW it is not allowed anymore by WTO and EU laws.

= Yet, I can think of many airlines in Europe that continue to receive state subsidy. EU law is broken when convenient by the member countries. Its actually quite the farce. On a separate note, I wish LX continued to be independent.

Cheers,
A.
Live, and let live.
 
ZRH
Posts: 4371
Joined: Tue Nov 16, 1999 11:32 pm

RE: LX: A Shame...

Thu Nov 16, 2006 6:30 am

Quoting Abrelosojos (Reply 6):
= Yet, I can think of many airlines in Europe that continue to receive state subsidy. EU law is broken when convenient by the member countries.

You are right. But I think there are not many. Probably AZ and OA but not the big ones like LH, AF or BA.
 
abrelosojos
Posts: 4049
Joined: Sun May 29, 2005 6:48 am

RE: LX: A Shame...

Thu Nov 16, 2006 7:52 am

Quoting ZRH (Reply 7):
Probably AZ and OA but not the big ones like LH, AF or BA.

= Well, there are indirect subisidies ... and dont forget that AF got around $3.7 billion bailout in end 1994 and a smaller amount a little later.

Cheers,
A.
Live, and let live.
 
dambuster
Posts: 109
Joined: Sun Nov 05, 2006 7:49 am

RE: LX: A Shame...

Thu Nov 16, 2006 6:01 pm

There's no doubt there are subsidies AZ is a good example! Well somehow, most airlines aren't doing well maybe U2 are and some other low cost, maybe some EK etc... But for the rest subsidies would do some good, ok it kills competition but I'd prefer subsidies than LX not being independant...
 
Motorhussy
Posts: 3219
Joined: Thu Mar 30, 2000 7:49 am

RE: LX: A Shame...

Thu Nov 16, 2006 6:09 pm

I guess you can call it the national carrier as it is the only airline exclusively committed to getting passengers to and from Switzerland (or points beyond via Switzerland).

It does do a good job as a global ambassador. People elsewhere think of Swiss precision and other positives when they think of Swiss. And if the airline fails to reinforce these positive attributes, it impacts negatively on the nation - as did the collapse of Swissair.

Whether you think of it as your flag carrier, it carries your flag around the world.

IMHO of course.
Regards
MH
come visit the south pacific
 
ANother
Posts: 1833
Joined: Thu Nov 03, 2005 2:47 am

RE: LX: A Shame...

Thu Nov 16, 2006 6:26 pm

The Air Services Agreements that Switzerland has with countries outside of the EU all have a similar designation clause. This permits each country to designate airlines for the route rights contained in the agreement. The ICAO standard clause provides that each airline must be 'substantially owned' by nationals of the country making the designation.

This means that Swiss is required to be 'substantially owned' by citizens of Switzerland.

While we all know that LH has taken control of LX, they have done some accounting fiddle to retain LX's Swiss nationality. If LX became German they could not use Switzerland's route rights.

For the same reason KL remains a 'Dutch' airline on paper.
 
desediez
Posts: 42
Joined: Tue Oct 10, 2006 2:44 pm

RE: LX: A Shame...

Thu Nov 16, 2006 8:18 pm

Quoting Abrelosojos (Reply 6):
On a separate note, I wish LX continued to be independent.

For those whishes you must admit: -mala pata- for you and luck for many employees of LX... Wink
 
SwissA330
Posts: 550
Joined: Fri Mar 01, 2002 8:23 am

RE: LX: A Shame...

Thu Nov 16, 2006 9:18 pm

That's correct. Swiss is still a swiss company for the above stated reasons. Swiss belongs to a (swiss) company called 'Air Trust'. and those guys are connected to Lufthansa, who own 49% of them.

In the long run however, Swiss will become a direct part of LH, at least this is the plan.

The whole story:
http://www.swiss.com/web/NS6/about-s...ss/sw-lx-lh-partnership-future.htm

Now what I don't get: I'm still a shareholder of LX, but apparently i have been 'squeezed out' Sad
Well, it's a nice Paper to put in a frame and hang on a wall...
swissair/+/ we care
 
YULWinterSkies
Posts: 1266
Joined: Thu Jun 09, 2005 11:42 pm

RE: LX: A Shame...

Fri Nov 17, 2006 12:58 am

Quoting PanHAM (Reply 4):
it's better for Switzerland to have all these agreements which allow Swiss carriers to fly from anywhere in the EU to anywhere in the EU

Do they actually fly from anywhere in the EU to anywhere in the EU? I'm confused...
When I doubt... go running!
 
User avatar
PipoA380
Posts: 1537
Joined: Wed May 18, 2005 1:36 am

RE: LX: A Shame...

Fri Nov 17, 2006 1:28 am

Quoting Dambuster (Thread starter):
so can the "Conseil Fédéral" pretend LX is the national carrier?

Well, back in 2002 when the company was created, there was a lot of money injected info LX. This money was granted by the "Conseil Fédéral", and comes from the people (almost every "canton" paid a part of it). This money comes from somewhere, and this usually is our pockets. Somehow, the conseil fédéral can pretend it's the national airlines, let's rather say the Swiss people's airline.

Quoting Dambuster (Thread starter):
until it falls in foreign hands...

The acquisition by LH is the best thing that ever happened to LX. Their way of thinking was completely mad, thinking they would be able to survive in such a higly competitive market such as Europe, as a stand-alone airline, surrounded by AF-KL, AZ, LH, OS, and so on. They were loosing loads of money (ours, still!) and I'm quite confident that LX would not be making the money they're finally making if it hadn't entered Star Alliance. Today, the keyword to success is "strategic alliance", and it LX so long to finally figure out that they almost started a new great eipsode of airline bankrupcy.

Quoting Dambuster (Reply 3):
If it's for their darn AVS they can forget it!

You know, one day you'll be really happy to have that AVS, and I think most people in Switzerland are under-estimating the problem of AVS, but that's a completely different debate, and I don't know why you're getting this on the table...

Quoting Dambuster (Reply 3):
allow subsidies

What for? Maintain an unnecessary airline (I'm exagerating, but considering all other airlines around us) that costs too much and that's sponsored by us? Subsidies means you my friend. Subsidies also means that whoever's subsidised doesn't really care about how much they spend, and what for. Ok, they helped them launch the airlines, now let them fly with their own wings. Being part of Star Alliance does them a lot of good. They're expanding their fleet, they're making money, they have nice service aboard, and they're actually even good at it! Not being subsidises pushes to competition, price dropping, and better service. That's what it's all about today.

Quoting Dambuster (Reply 3):
aviation shouldn't be different in this field than other means of transport.

Of course it should. The SBB/CFF is subsidised because we definitely need trains in Switzerland, because the SNCF or the DB will never come here and build our train insrastructure. Furthermore, the trains actually are no harm for the environment. Flying GVA-ZRH is. This is part of another thing, which is ethics, and I don't think it's the point of the discussion. The difference is that foreign planes can come into Airports in ZRH, whereas foreign trains can't come into Zürich HB. No one want to pay for the costs of it, but it's something we can not live without. Planes is, because other ones will still fly their planes here.

To me, this is all good. LX and LH are living happily together, they're making profit, we still have our airlines and our brand, and we have a good flagship around the world. Let Swiss fly with its own wings. They all have to... one day or another!
It's not about AIRBUS. it's not about BOEING. It's all about the beauty of FLYING.
 
YukonTrader
Posts: 204
Joined: Fri May 20, 2005 8:23 pm

RE: LX: A Shame...

Fri Nov 17, 2006 4:09 am

Hi

Quoting Abrelosojos (Reply 6):
= Yet, I can think of many airlines in Europe that continue to receive state subsidy. EU law is broken when convenient by the member countries. Its actually quite the farce.

mh, not quite right as a quick look into EuroStat etc. would reveal. EC Competition Law is one of the areas where the EC has quite a record, so to say. Any of the big global Chemical firms such as Hoechst, ICI, Hoffman-LaRoche etc. will immediately admit that. They once used to form cartells in about any market you could think off: Be it color components, vitamins or polypropylene, you just look up the leading case law of the ECJ at www.curia.europa.eu/ and look up the hefty sanctions imposed on the firms to see for yourselves ;o).

And also our friend Bill Gates is having a hard time dealing with Art. 82 EC-Treaty, the provision sanctioning an abuse of a dominant position of an undertaking, even if it is one based in Redmond, OR...

In as far as the EC provisions on State Aid (Art 88 EC-Treaty, if I remember correctly) that forbid Member State Subsidies are concerned, it is crucial to remember that these provisions make a few exceptions:
- Activities of overall economic interest (such as the above-mentioned rail infrastructure without which the economy would grind to a halt) are exempt from the provision, and therefore open to certain forms of subsidies, although the conditions are strict and practices are closely monitored,
- Industries and enterprises undergoing restructions can apply for an exemption to have their restructuring cost subsidised. If granted, the subsidy has a clear financial limit and time frame, and can onlly be extended or increased on a very exceptional basis. This is exactly what France did in the case of restructuring Air France in 2003.

AZ and OA however are 'repeat customers' in successfully applying for restructuring aid. Political lobbying (pressure, if you want) has bought them another life-span, although I don't expect that they will obtain another exemtion for yet another subsidy. The majority of Member States and the European Commission (which ultimately decides about the compatibility of a subsidy with the Common Market) have made a pretty clear point that if the current subsidies run out without succeeding in turning OA and AZ around, then it will be curtains for those airlines. Should Italy or Greece subsidise them, the Commission will start proceedings and urge the airlines in question to pay back the money immediately.

Just my 2 1/2 cents. Cheers, Lukas
 
jfk777
Posts: 5828
Joined: Tue Aug 22, 2006 7:23 am

RE: LX: A Shame...

Fri Nov 17, 2006 5:14 am

I wish British Airways hadn't been such bullies with SWISS and it had joined ONEWORLD. With Luftahnsa in STAR with SAS & Austrian and now SWISS central Europe is crowded by Star airlines. A ONEWORLD SWISS in the middle of all those Star alliance carriers would have been great.
 
multimark
Posts: 411
Joined: Sat Jul 29, 2006 1:53 pm

RE: LX: A Shame...

Fri Nov 17, 2006 10:17 am

People forget that a nationally owned flag carrier, working in concert with a national tourism authority can do wonders for that country's tourism, thus increasing employment and tax revenue. Unfortunately the Reagan/Thatcher mentality that still seems to hold sway over many people has cast that model into disrepute.

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