Lufthansa eyes purchase of SAS

By Michael Flux, November 4 2010

Germany's flag carrier Lufthansa may looking to purchase the struggling Swiss airline SAS, after positive statements from key members of the airline.

Rumors of a possible takeover have not previously been addressed by either company. In a recent press conference, however, Lufthansa chairman Jürgen Weber told the audience that he "would happily integrate SAS" into their operations.

SAS may be in need of the kind of bailout Lufthansa could provide. The airline has been dropping further into debt since a 2008 spike in oil prices, the global financial crisis and the recent Icelandic volcano eruption have severely damaged its profitability.

Lufthansa has been buying up carriers to stay competitive in an increasingly tightening market. Elsewhere on the continent, Spain's Iberia Airlines is merging with British Airways to form IAG. The recently merged Air France-KLM is the other dominant force in the region.

Last September, British Airways head Willie Walsh wrote up a list of twelve airlines he would consider buying or merging with after the IAG deal is complete.

He's also underlined five European airlines that may come up for sale within the next few years. One of these is Lufthansa's recent purchase of bmi, and also on the cards is none other than SAS. It will be interesting to see which airline is able to pick up the struggling company.

Lufthansa chairman Jürgen Weber is hoping for ownership restrictions to be lifted in the U.S. and China - it's clear the rampant consolidation of airlines is not yet over.


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