Lufthansa to buy SAS?

Stumbled over this agency statement on www.nzz.ch:

Lufthansa is acquiring SAS, trade of SAS stocks in Stockholm has been suspended temporarily. SAS will respond officially after its stock has surged by 10%...

"Finanzen: 12. September 2008, 15:12:05
Handel mit SAS-Aktie nach Gerücht über Kauf durch Lufthansa gestoppt


STOCKHOLM (AWP International) - Die Aktien der skandinavischen Fluggesellschaft SAS sind am Freitag nach Gerüchten über eine bevorstehende Übernahme durch die Deutsche Lufthansa vom Handel ausgesetzt worden. SAS kündigte eine Stellungnahme an, nachdem die Aktien des Unternehmens im Gefolge von Medienberichten um zehn Prozent in die Höhe geklettert waren./tb/DP/jb"

More "details" here:

http://de.reuters.com/article/topNew...24807420080912

Seems the LH M&A team is very busy at the moment trying to find another bride.

SAS published the following:

http://se.yhp.waymaker.net/sasgroup/....asp?id=172392

Statement regarding speculations on the future structure of the SAS Group

Regarding today's speculations in the media SAS confirms that it is in the process of evaluating various structural possibilities for the Group. Within this process SAS is conducting talks about a possible structural solution.

It must be emphasized that no decision has been taken.

This is IMHO not really a counterstatement leaving all opportunities wide open...

So perhaps they could rebrand the consolidated airline as: sLasH

What I read and hear in the German media is different. So far, LH hasn't confirmed anything.

I think it's time to start a thread about European airlines that LH doesn't want to buy

Here's one.

http://www.flyertalk.com/forum/showp...&postcount=936

Lufthansa is looking at forming an alliance involving bmi and Virgin Atlantic to take on the proposed powerhouse combination of British Airways and American Airlines.

It emerged yesterday that Lufthansa was in talks to buy SAS, the struggling Scandinavian airline, which owns 20 per cent of bmi. Lufthansa already owns 30 per cent of bmi, minus one share, and has an option to take full control of the airline this autumn. Shares in SAS were suspended yesterday after climbing 11.2 per cent following reports that it was in talks with Lufthansa.

(...)

Speculation of consolidation among under-pressure European airlines came as Sir Richard Branson kicked off a Pounds 3million campaign against an alliance between BA and AA. A spokesman for Virgin Atlantic said that the airline was not against consolidation per se and it understood it could become engaged in it in the months to come. "But it is the scale of this alliance between BA and AA that matters," the Virgin spokesman said. "Even if there were an alliance between Lufthansa, bmi and Virgin, we would still only have 17.5 per cent of slots at Heathrow compared with 47 per cent controlled by BA, AA and Iberia."

http://business.timesonline.co.uk/to...cle4744715.ece

Wells said.

However, LH requires only 17.5 percent of the slots in LHR. They certainly have no intention to keep all of the regional flights in the UK BA is required to offer because they only have one hub. I would assume (just by a judgement of the thumb) that the London region covers 80% of the profitable market in the UK. What I can imagine LH to do, is using the London slots for profitable long and medium range flights, forget about quite a bit of the regional network but direct the customers from the UK regions into FRA or DUS for connections. LHR-DUB will certainly survive but I am not sure about the rest.

Sounds familiar: That's what BA, sorry London Airways., already does.

Interestingly, to add a new twist to this story, there is an article in the Sunday Times today which says that LH may no longer be interested in buying BD:

"Lufthansa has an option to take complete control of BMI later this year or early next. However, it is understood it wants to sell its stake for around £200m and that talks with Etihad were held in the summer."

Strange given that The Times said something completely different the previous day!

I think you will find that BOTH BD and BA are required to operate certain services between places like GLA and EDI to LHR contrary to what you have stated. That said, I would not be surprised to see more A319s and EMB145s operating these routes moving forward.

If BD failed to operate these services they would loose the slots.

And if Ethihad brought them, BD would no longer necessarily be able to operate many of it's services outside of the EU. This story also goes against pretty much every other credible article out there as well as everything else we have heard coming out of BD. LHR and the UK is a very important market for LH so I can't see them walking away at this late stage.

Etihad sounds like a red herring to me.

They will use the slots, however, not for any non-profitable domestic routes. Why should they compete with BA on the routes into London? For connecting pax? Terminal 5 is a great Terminal to connect. If BDLH wants to do better, this can certainly not be done by connecting UK Pax in Terminal 1/2. For BDLH is can only be connections for in FRA or DUS and using the LHR slots for TATL routes for the London market.

I fully agree. If LH WANTS to buy BD they will buy BD. The purchase price can (assumingly) be paid out of cash flow.