Swiss Airline in Talks With Rivals

Financially troubled Swiss International Air Lines Ltd. is holding talks with rivals about closer ties that include a possible merger, a spokesman said.

The “independence of Swiss is not the first priority, and we have to prepare ourselves for other forms of cooperation,” said Jean-Claude Donzel, a spokesman for the Basel, Switzerland-based airline.

Swiss International would not comment on a report that Germany’s Deutsche Lufthansa, Europe’s third-biggest airline, has offered to buy the Swiss carrier.

Lufthansa is willing to acquire a one-third stake in its rival for as much as $219 million if Swiss International agrees to cut one-third of its workers and a labor dispute with its pilots is settled, according to a June 29 report in the Swiss weekly SonntagsZeitung.

Swiss International needs about $364 million to make cuts needed to continue operations, the airline said last month.

The Swiss government, which helped create the airline last year from parts of bankrupt Swissair Group and regional carrier Crossair, has ruled out another intervention.

UBS and Credit Suisse Group, two of Switzerland’s largest banks that together own about 23% of Swiss International, have said they would consider a request for more money from the airline in the same way they would review any other loan application.

The government and banks urged Swiss International to consider a merger at a meeting July 2 with company managers.