Steffen Schmidt  /  AP file
The tails of a German Lufthansa plane, front, and two planes of Swiss airline Swiss International are seen at Zurich airport. Lufthansa won EU approval Tuesday for its $374.7 million takeover of Swiss International.
updated 7/5/2005 9:05:34 AM ET 2005-07-05T13:05:34

Lufthansa AG won clearance from the European Union on Tuesday to proceed with its $374.7 million takeover of Swiss International Air Lines provided the carriers surrender slots at several airports including hubs in Zurich and Frankfurt.

Company officials said the decision means they could complete the deal by 2006 at the earliest.

EU approval came after U.S. antitrust regulators gave their clearance to the deal over the weekend.

The slots that would be given up would amount to “a total of up to 41 roundtrips per day,” a news release said.

Under the terms of the EU approval, both airlines may also have to give up slots at Munich, Duesseldorf, Berlin; Vienna, Austria; Stockholm, Sweden; and Copenhagen, Denmark, said Lufthansa spokeswoman Christine Ritz.

“At the moment, we don’t have to give up the slots,” she said. “It’s only if there’s a new entrant or if there are no slots available. Right now, we’re still flying on all these destinations.”

EU Competition Commissioner Neelie Kroes said the takeover of Swiss, which has suffered massive financial problems since it was created out of Swissair in 2002, “should not lead to higher prices or reduced choice of carrier.”

The EU head office said its investigation into the deal found that competition was reduced the most on the Zurich-Frankfurt and Zurich-Munich routes and also said that competition on long-haul routes to the United States, South Africa, Thailand and Egypt would be affected.

The EU also got assurances from the Swiss civil aviation authority that it would give traffic rights to other carriers wanting to stop over in Zurich on flights to the U.S. “or other non-EU destinations.”

Lufthansa has pledged to maintain the Swiss brand and run it as a separate Swiss-based airline operating from its hub in Zurich.

“The green light from Brussels and Washington gives us the opportunity to ensure the long-term future of the air transport connections that are so crucial to Switzerland and its economy,” Swiss President and Chief Executive Christoph Franz said.

Lufthansa, Europe’s third-largest passenger airline behind British Airways and Air France-KLM, decided in May to buy troubled Swiss, which was racking up losses of $1.64 billion (2 billion francs) since its creation three years ago.

Ritz said Lufthansa will increase its stake in AirTrust — the vehicle by which Lufthansa is buying Swiss shares from its minority shareholders — from 11 percent to 49 percent.

“Once the current negotiations to secure Swiss’ traffic rights have been successfully concluded and corresponding agreements have been obtained, Lufthansa will raise its holding in Swiss to 100 percent,” she said, adding that could happen by 2006.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%