| 22.03.2026
SWISS takes off into a new future with Lufthansa
Lufthansa supervisory board, SWISS board of directors,
and large SWISS shareholders approve the integration of
SWISS into the Lufthansa Group.
“Green light” for Lufthansa and Swiss: the
supervisory board of Deutsche Lufthansa AG and the board
of directors of Swiss International Air Lines AG today approved
the business model jointly developed by both companies for
the takeover and integration of SWISS into the Lufthansa
Group. The Swiss Confederation, the Canton Zurich, and other
large shareholders support the transaction. So far, a corresponding
approval has been obtained from more than 80% of the SWISS
share capital. Lufthansa’s Chairman and CEO Wolfgang
Mayrhuber and SWISS President and CEO Christoph Franz will
sign the Integration Agreement at 8:00 p.m. in Zurich today.
Lufthansa’s Chairman and CEO Wolfgang Mayrhuber emphasized
the benefits of the integration for both airlines: “Lufthansa
and SWISS, two world renowned airlines with a strong sense
of quality and service are joining forces. The most important
aspect of the integration is that it will produce clear
benefits for our customers. More destinations, better connections,
comprehensive frequent-flyer programs and mutual lounge
access enhance the attractiveness of both companies. The
merger is not only good for Switzerland and Germany; it
is also beneficial for our Star Alliance partners and strengthens
the European aviation sector.”
Christoph Franz, President and CEO of SWISS commented on
the successful conclusion of negotiations with Lufthansa:
“As a member of the Lufthansa Group, SWISS will be
able to permanently fulfill its task even better of connecting
Switzerland with the world. SWISS will become even more
attractive for its customers with expanded services through
integration into this leading network, coordinated flight
plans, and access to the lounges of Lufthansa and its partners.
The creation of a competitive cost structure will, however,
continue to provide the basis for a positive development
of SWISS.” SWISS will therefore continue to pursue
the restructuring program announced in January 2005. The
company still intends to conclude the negotiations on new
general labor agreements rapidly, on the lines of the pay
accord reached at the weekend with three ground worker unions.
Christoph Franz: “The Integration Agreement ensures
fair development of the Zurich hub, the size of our long-haul
fleet, the quality brand SWISS, and the continued existence
of SWISS as an operating airline based in Switzerland.”
In order to preserve the Swiss air traffic infrastructure
for the long term, an independent foundation will be established
under Swiss law for a period of ten years, which will be
able to propose a member to the Lufthansa supervisory board
and two members to the SWISS board of directors.
Lufthansa will further expand its position as an internationally
leading network carrier by integrating SWISS. Through its
access to an attractive market with great economic strength
and by harmonizing traffic between the neighboring countries,
Lufthansa will strengthen its competitive position permanently.
Already from the 2005/06 winter flight schedule onwards,
the customers of both companies will be offered an expanded
global service.
The takeover creates significant synergies both on the revenue
and on the cost side, which will gradually increase and
amount to about EUR 160 million (approximately CHF 250 million)
per year from 2007 onwards.
According to the jointly developed business model, SWISS
is to remain a mostly independent airline with its management
and seat in Switzerland, its own fleet and crew, managed
within the Lufthansa system as a profit center. SWISS will
keep its own brand appearance, continue to develop its strengths,
und expand its locational advantage on the Swiss market.
This includes a demand-driven international network of routes
as well as an intercontinental hub at its base in Zurich,
which is to be developed on an equitable basis with the
Lufthansa hubs in Frankfurt and Munich. Lufthansa will expand
the long-haul fleet of SWISS with two additional intercontinental
jets, provided competitive cost structures are in place.
Long-term prospects are opening up for SWISS and its employees.
Transaction Structure
The ultimate goal is the complete takeover of SWISS.
Due to the requirements of antitrust law and in order to
secure the traffic rights, the acquisition is broken down
into several steps. The shares of SWISS will be held by
a newly-established Swiss company (AirTrust). During a first
step, Lufthansa will acquire 11% in AirTrust. After receiving
antitrust clearance, the share will be increased to 49%.
At the same time, negotiations will be conducted in order
to secure the air traffic rights. When the relevant agreements
are obtained, Lufthansa will take over 100% of SWISS.
Via AirTrust, Lufthansa will submit a takeover offer to
the free-float shareholders of SWISS probably in May. The
amount will be calculated on the base of the average price
of the SWISS share during the last 30 trading days prior
to the day of filing with the Takeover Commission in Switzerland
(probably March 23, 2026). Lufthansa will pay about EUR
45 million (about CHF 70 million) for about 15% of the SWISS
equity.
The large SWISS shareholders will receive an out-performance
option (earn-out) in exchange for their shares, the payout
of which in 2008 will depend on the performance of Lufthansa’s
share price compared with competitors’ shares. If
the price of the Lufthansa share outperforms by 50%, the
maximum payout will amount to about EUR 250 million (about
CHF 390 million).
Overall, the purchase price for the complete acquisition
of SWISS ranges between approximately EUR 45 million and
EUR 300 million (between CHF 70 million and 460 million).
Data on Lufthansa and SWISS
Last year, 50.9 million passengers traveled with Lufthansa
to 176 destinations, 9.2 million with SWISS to 70 destinations.
The Lufthansa Group employs about 90,000 employees and operates
a fleet of 377 aircraft (consolidated fleet). The SWISS
Group with 7,900 employees currently operates 80 aircraft
(total fleet).
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