Two sets of carriers this month progressed on plans to merge operations after regulators signed off on their proposed deals. In Europe, Lufthansa's intended purchase of Swiss International Air Lines cleared a European Commission review after the two airlines accepted concessions meant to protect competition. Stateside, America West and US Airways said the U.S. Department of Justice did not object to their proposed merger and that they remain on track to close the transaction this autumn.
The deadline for competing bids for US Airways' assets expired this month without any other parties submitting alternative plans. "It would have been difficult for other offers to have provided comparable value to our stakeholders, and with this bidding process now behind us, we will begin planning with America West for the integration of our two companies, which will create an airline that offers numerous benefits for our customers and the communities we serve," said US Airways CEO Bruce Lakefield. The airline also has made additional progress in its efforts to reorganize and emerge from bankruptcy protection (see story, page 4).
America West and US Airways on aggregate serve as preferred airline suppliers for at least 20 of the largest North American corporate travel programs, as measured by the most recent BTN Corporate Travel 100
(BTN, July 4). The airlines said they would attract incremental corporate business once their networks are combined
(BTN, June 6).The remaining America West nonstop transcontinental services, however, will be eliminated this fall as part of the integration process. The carrier originally launched transcontinental flights in late 2003 but since has trimmed the schedules.
Meanwhile, European and U.S. competition authorities this month approved Lufthansa German Airlines' planned acquisition of Swiss, clearing the carriers to begin integrating flight schedules and other customer programs. In a statement issued this month, the European Commission said its conditional approval followed commitments by the two carriers to surrender slots at several airports.
Specifically, the two airlines agreed to relinquish slots for a total of 41 daily roundtrips flights at Berlin, Copenhagen, Düsseldorf, Frankfurt, Munich, Stockholm, Vienna and Zurich. EC said it secured other commitments from Lufthansa and Swiss, as well as German and Swiss civil aviation authorities which agreed not to regulate pricing on long-haul routes.
"I welcome airline consolidation in Europe, but it should not lead to higher prices or reduced choice of carrier," said European Union Competition Commissioner Neelie Kroes.
Lufthansa said U.S. antitrust approval "has been granted unconditionally."
"Following our successful public purchase offer
(BTNonline, June 24) and the plans to welcome Swiss to Star Alliance, these regulatory approvals mark a further milestone on our joint journey forward," said Lufthansa chairman and CEO Wolfgang Mayrhuber. "In just a few weeks' time, the customers of our two airlines will be feeling the first benefits that our partnership will bring."
The carriers said those benefit would include a wider network, improved flight connections and integrated frequent flyer and airport lounge programs. Much of the coordination is set to go into effect at the start of the 2005/2006 winter schedule. Lufthansa said it would raise its stake in Swiss to 100 percent in 2006 following negotiations to secure Swiss traffic rights.
According to the latest BTN CT100 report, several of the largest North American corporate travel programs use one or both carriers, including Bayer, Citigroup, Hoffman-La Roche, SAP America, the United Nations and the World Bank.
Lufthansa and Swiss announced merger plans this spring
(BTN, April 18).