Swiss has finally secured its long-sought link with British Airways, and therefore the oneworld alliance, agreeing to sell slots at London Heathrow and merge its frequent-flyer programme.
After months of negotiations with both BA and Star alliance founder Lufthansa, Swiss has signed a binding memorandum of understanding with BA on an alliance between the two carriers, and at the same time, accepted an invitation to join oneworld.
The airlines will forge joint-venture flight operations between Switzerland and the UK, including extensive codesharing, and BA will gain eight of the 14 daily slot pairs that Swiss holds at Heathrow. In return for the slot exchange, BA will guarantee a SFr50 million ($36 million) credit line for Swiss. The deal will also see the 500,000 members of the airline's frequent-flyer programme, the Swiss TravelClub, integrated into BA's Executive Club.
The BA deal is also understood to contain restrictions on the growth of down-sized Swiss, which has lowered its capacity by 35% from 137 to 79 aircraft.
Mike Powell, analyst at London-based Dresdner Kleinwort Wasserstein says the deal is good for both parties. "Swiss has finally muscled its way into one of the global alliances. This opens the door to the next most important thing - new cash." Powell sees Swiss now gaining access to SFr500 million of new debt finance that could secure its future, with the carrier now in discussions with major banks and its main shareholders.
Swiss says its membership of oneworld will produce an annual benefit of SFr100 million a year, and that member carriers intend to direct more of their services via its Zurich hub to serve the central European market. At present, oneworld airlines have 34 flights to and from Zurich.
MARK PILLING LONDON
Source: Airline Business
