Lufthansa denies bid for Swissair
German carrier refutes media report saying it made an offer for Swiss airline.
July 14, 2003: 7:35 AM EDT
ZURICH (Reuters) - German airline Lufthansa denied Monday a media report that it had made a firm takeover offer for battered Swiss International Air Lines, but investors still pushed up the Swiss carrier''s share price.
"There is definitely no offer," Deutsche Lufthansa AG spokesman Klaus Walther said in Frankfurt.
The Swiss carrier declined to comment on the report, saying only it was talking to several airlines about various forms of cooperation.
Swiss Sunday newspaper SonntagsZeitung quoted unidentified sources as saying the German carrier had made a firm takeover bid that would guarantee Swiss''s survival in a slimmed-down form, unless economic conditions worsen drastically.
The report boosted shares in the struggling carrier by more than 17 percent to 8.50 Swiss francs, but the thinly traded stock backed off to 8.14 francs after the denial.
Analysts also played down the report, saying Swissair still faced many hurdles before it could be ready for a takeover.
"There are lots of problems to be overcome before any move could happen and it is difficult to establish how likely this is or give any time frame at the moment," said Trudbert Merkel, a fund manager at DEKA in Frankfurt, adding Lufthansa might only be interested in parts of Swiss.
"Lufthansa, just like other large European airlines, is generally interested in the Swiss market," Zuercher Kantonalbank analyst Patrik Schwendimann said, but he also added Lufthansa was unlikely to make a full bid at the moment.
Swissair Chief Executive Andre Dose has only said that the airline would have to consider giving up its independence as it fights to avoid the fate of its collapsed predecessor, Swissair.
One large hurdle the airline faces is a bitter dispute between former Crossair pilots and former Swissair pilots, who were forced to work together after the airline was formed from the remains of collapsed Swissair and regional carrier Crossair.
Former Crossair pilots say they have been discriminated against in terms of seniority and have borne the brunt of layoffs.
Hurt by a global economic slump and travel jitters sparked by war and the SARS virus, Swissair said Friday it would cut its route network by more than a quarter, after it already announced plans last month to slash its fleet and staff by about a third.