ORD Boy 2
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BA/Swissair

Sun Sep 24, 2000 2:25 pm

check this out

BA sets sights on Swissair
By Jason Nisse
24 September 2000
British Airways is to pursue another merger in Europe after the failure of its £3.1bn deal with KLM. Swissair, Switzerland's largest airline, is understood to be the main target.
Ron Eddington, the Australian chief executive of BA, is understood to want to force the pace of European consolidation as the way of stemming the losses that BA is haemorrhaging on the Continent.
Its number one target is Swissair, that's owned by SAirGroup. Last month SAirGroup produced a report which, while not published, became common knowledge in the air travel industry. It concluded that a merger between Swissair and BA would be a much better fit than a BA-KLM deal, as there would not be the regulatory problems of Swissair losing lucrative transatlantic routes, an issue KLM would have faced if taken over by BA.
Also Swissair has a higher proportion of business passengers than KLM, fitting in with the sort of business that BA would like to develop. BA recently launched beds in its club class long-haul flights and an economy plus service for business travellers.
Swissair currently has no direct relationship with BA. It runs its own alliance of airlines, called Qualiflyer, while BA is part of a grouping called OneWorld. BA also has a 10 per cent stake in Iberia, the Spanish airline.
Swissair has not commented on speculation that BA could be interested in a deal, but admitted that its name is often mentioned in conjunction with a BA merger.
A BA spokesman said the group was concentrating on its business and was not about to rush into any other merger discussions.
However, other sources close to BA said that Mr Eddington is concerned that if BA does not strike an alliance in Europe that allows its to cut costs substantially, it may find it difficult turning its Continental losses into profits.
The merger with KLM would have created the world's third largest airline but fell apart over the issue of the amount of control that would have been exercised by Mr Eddington.
The collapse of the deal is an embarrassment to the Australian who only took over at BA in May, following the sudden departure of his predecessor, Bob Ayling.
Under Mr Ayling, BA pursued an alliance with American Airlines that fell foul of regulators on both sides of the Atlantic.

ORD Boy2
 
Mr.BA
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RE: BA/Swissair

Sun Sep 24, 2000 2:40 pm

I don't think SwissAir wants to merge though. But I agree-BA needs another European partner... any thoughts???

Alvin
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MrAirbus
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RE: BA/Swissair

Sun Sep 24, 2000 11:00 pm

Somewhere it would be logic. BA is working together with AA thanks to OneWorld. SR/SN are doing some code shares with AA. So it probably would be no problem for AA and the trans-atlantic flights.

At the other hand, do you know what kind of an airline you would create if it ever would come to a merger between BA and SR???? That would be an awful big airline, it would become the monster of Europe. Along with SR there would also be SN (Sabena), TP (Tap Air Portugal) and Crossair. All of these airlines are owned (or half owned) by SR.

They would become very strong in the international market (north-south-west-east) but also at the intra-european market. They also would have some prety strong hubs. LHR, ZUR, BRU, LIS. They would set the price for the tickets all over Europe. Say byebye to the cheap fares.

I think the EU will never allow a merger of that size between 2 major European airlines. Think about the reaction of the EU when SR tried to buy more than 50% in TP. That deal didn't happen. I think SR now only has 49% of the shares of TP. It worked with SN where SR ownes more than 85% of the shares, but that is thanks to the Belgian government who wants to get rid of all the state owned companies.

Something deep inside of tells me that it would be nice to see such a big European airline, but common sence tells me that would never happen. Prices would go up and competition would be very, very, very p/o.
 
ricfredo
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RE: BA/Swissair

Sun Sep 24, 2000 11:52 pm

I think that a merger between Sairgroup and Ba is improbable because of the reaction of the European Commission .(Antitrust Authority).I know that Alitalia is talking to BA about the opportunity of a reciprocal agreement.
 
blink182
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RE: BA/Swissair

Mon Sep 25, 2000 4:24 am

If AA would be able to still codeshare like it does now with SR, I am all for it, but if it means leaving SR/SN I say NO WAY SR/BA! I think if the two do merge, AA will lose its alliance with SR/SN so I am kinda against it, plus why does BA want to buy another airline?
blink182
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gerardo
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RE: BA/Swissair

Mon Sep 25, 2000 6:06 am

SR never tried to buy more than 50% of TAP. EU-airlines, owned by a non EU airline will loose its EU rights, and Switzerland is not in the EU. That's why SR acquired 49% of SN, LTU, AOM, ... . Furthermore, TAP is not completely for sale.

Now, that the bilateral agreement between EU and Switzerland has been signed, SR will gain almost the same rights as other EU airlines, also the right to acquire more than 50% of an EU airline, as they anounced with SN, of which SR will take over 85%.

I don't think, a BA-SR merger would get green light from the EU commission however.

Regards
Gerardo

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avion
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RE: BA/Swissair

Mon Sep 25, 2000 6:16 am

I also believe that it wouldnt be that easy to buy the SAir Group because they are larger than KLM.

Avion
 
ZRH
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RE: BA/Swissair

Tue Sep 26, 2000 12:36 am

I don't think that there will be merger between SAirGroup and BA. They perhaps work very close together, but a merger won't be possible. BA and AA (with the other Oneworld members) and SR (with all Qualiflyer members) would be a very, very attractive and strong alliance.