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SWISSAIR BUYS INTO LTU

by Heiko Reuter

Now it is settled: The Swissair Group is going to buy into the Düsseldorf Flight and Tourist Group LTU. A new giant will be created in Europe's Holiday Flight Business.

What the industry has been expecting has now occured: The Swissair Parent Company SAirGroup will take over 49.9 per cent of shares in the LTU- Group and will thus be the biggest single shareholder. The Westdeutsche Landesbank which also has shares in the Tourism Groups Hapag-Loyd and TUI will reduce its interest from 34 to an expected 10.2 per cent. This will happen because of pressure exerted by the Federal Monopolies and Mergers Commission. Further German investors, some of whom have still not been found, will hold 39.9 per cent of the shares. Members of the LTU Group are the airline with a fleet of 29 aircraft, the LTT-Touristik with the tour operators Tjaereborg, Meierís Weltreisen, Jahn-Reisen, Smile and Fly, THR and Marlboro. No details have been disclosed about the finances of the transaction.

There is a reason for the involvement of Swissair. In the European airline industry it is disadvantaged because it comes from a Non-EU-Country. With this shopping trip, the Swiss have created a new holiday flight giant. It has been claimed that the LTU will be linked to a Swissair-led "European Charter Flight Group" that is to have its hub in Düsseldorf. Supposedly the Balair/CTA (Switzerland), Sobelair (Belgium), the Italian Carrier Air Europe and Volare will belong to this association. SAirGroup President Philippe Bruggisser claims that the scheduled carriers of Swissairís and Austrian Airlinesí Qualiflyer Group could take on a feeder function. He stressed that LTU should keep its independence. Job cuts were not on the agenda: "The Swissair buy-in will not bring cutbacks but growth".

From page 19 of FLUG REVUE 1/99