THE EUROPEAN Commission (EC) has given its blessing to the alliance between Swissair and Belgian flag carrier Sabena.
Under the deal, Swissair will take a 49.5% stake in Sabena by 2005. The EC says that it is "satisfied" about guarantees that Sabena will remain under European Union (EU) control, one of which is that the Belgian Government will retain a blocking minority stake in the airline.
The two have set themselves the target of "being among the top three European airlines" by the year 2000, and say that they will form work groups to create "specific customer-service improvements", beginning this November.
Swissair will invest BFr6 billion ($209.7 million) in Sabena (which has been losing money) as part of a recapitalisation of the Belgian airline, which will raise a total of BFr10 billion. Some BFr1.5 billion of this will come from the Belgian Government. Swissair will also lend the Belgian Government around BFr4 billion to pay Air France for the 37.5% stake it held previously.
Under the deal agreed with, the EC, 18 new connections will be opened by Sabena to Switzerland, and Swissair will start 12 in the other direction. Switzerland is not a member of the EU, and the closer ties with Sabena "...offer the chance to link our routes into the network of an EU airline", says the Swiss flag carrier.
The EC says that routes between the two countries should be open to competition.
Swissair is twice the size of Sabena, carrying 8.4 million passengers in 1994. The combined fleets number around 100 aircraft, but the two are expected to rationalise their fleets as a result of the merger.
Source: Flight International
