British Airways/Swissair - Possible Merger

Sun Aug 20, 2000 9:06 pm

The UK's Financial Mail is today reporting that Swissair is weighing up plans to open up merger talks with British Airways, in competition with KLM. Swissair employed a leading consultancy firm to weigh up the benefits of a relationship with BA - the study found Swissair and British Airways are better suited as partners than BA/KLM.

BA still claims talks with KLM are on track. But the Swissair study maintains there would be fewer regulatory problems with a BA/SR link than BA/KL. Both the EC and USA will probably impose penalties on both BA and KLM should they merge to form the world's 3rd largest airline, including BA surrendering LHR slots or KLM ending it's alliance with KLM should BA refuse to do this.

Swissair would also better fit with BA's policy of targeting high-yield Premium passengers. KLM does not have a First Class cabin, and 70% of their passengers are economy travellers transfering from neighbouring countries. The Swissair study concluded a BA/KLM deal would increase the losses BA already suffers on their short-haul flights.

A Swissair merger will also allow BA to keep American Airlines as it's US partner, which is their prefered choice. Daniel Solon of aviation consultants Avmark said;
"Northwest is hardly BA's first choice as an American partner." I think he was being polite! Northwest has a poor image, an ageing fleet, no service to major Trans-Atlantic gateways such as JFK, BOS and LAX, and only serves one UK airport, Gatwick.
However BA is reported to have accepted that an alliance with Northwest is the price they will have to pay for KLM, although Rod Eddington is reportedly far from happy with this.

Swissair would also bring with it Sabena and Crossair. BA would also regain access to the French domestic market through Air Liberte/AOM, along with links to Turkish Airlines, Air Portugal, Air Europe and Portugalia.

Very interesting. I think Swissair are a much better partner for British Airways;
- More compatible image
- Fleets better matched
- Same US partner
- Fits BA's overall strategy better

I hope 2 of the world's best airlines can come to an agreement to allow them to continue to grow and provide excellent service to a growing number of passengers.


RE: British Airways/Swissair - Possible Merger

Sun Aug 20, 2000 9:11 pm

Online link to the full article;
Swissair may bust up BA party

RE: British Airways/Swissair - Possible Merger

Sun Aug 20, 2000 9:20 pm

Uh, how is this going to affect BA Economy class fares to the US? I hope this merger doesn't mean BA starts to charge what it likes to Y class pax.

Posts: 2126
Joined: Tue May 18, 1999 1:28 am

RE: British Airways/Swissair - Possible Merger

Mon Aug 21, 2000 3:07 am

I hope Swissair will start charging more competitive fares. What they charge is rip-off in all classes and yet they are full.

ZRH-LON-MIA British Airways 499 Francs
ZRH-MIA Swissair 1299 Francs


RE: British Airways/Swissair - Possible Merger

Mon Aug 21, 2000 3:13 am

i think that they should merge with Swissair because it would be better for them and they would still have their favoured partners American Airlines and Qantas.
Posts: 821
Joined: Tue Mar 28, 2000 2:45 pm

RE: British Airways/Swissair - Possible Merger

Mon Aug 21, 2000 3:27 am

If by chance BA and Swissiar should merge, why would it be easier to get approval from the regulators? It would seem to me that the same old questions and problems from the BA/AA deal would come up again. Only more so by the presence of Swissair in the mix. I have heard that BA isnt ready to give up slots at LHR for US carriers to gain approval for the KLM merger. So why would they do it for Swissair, AA and so on. somebody please explain. My personal opinion is that this is all a ploy to avoid facing the issue of increased US compertition at LHR in the form of openskies. The sooner that BA realizes openskies will come the sooner they can get their act together.

RE: British Airways/Swissair - Possible Merger

Mon Aug 21, 2000 4:08 am

....and stop charging ridiculous fares.
Posts: 4371
Joined: Tue Nov 16, 1999 11:32 pm

RE: British Airways/Swissair - Possible Merger

Mon Aug 21, 2000 5:28 am

Swissair representatives denied this story (Teletext Swiss TV DRS). They said that there are no merger taks with BA.

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