SAirGroup succeed in gaining partnership with LOT at the expense of BA code sharing

Published: 10/25/1999

The SAirGroup has been selected by the Polish Treasury Ministry, from a shortlist including Lufthansa and British Airways, to be the strategic partner for state owned airline LOT and take a 37.6% stake by the end of 1999 after making a capital commitment to raise its stake from an initial 10%. The new investment from SAirGroup will bring LOT into the Qualiflyer Alliance in January 2000 and according to Phillipe Bruggisser, the CEO of SairGroup, “LOT's Warsaw hub ideally enhances the Qualiflyer Group's position in Eastern Europe.” For BA, the loss of its code sharing with LOT will deliver a severe blow to its Eastern Europe activities. The size of the SAirGroup investment in LOT has not been disclosed, but sources within Poland have said that the SAirGroup's bid was substantially above the other short listed candidates, motivated in part perhaps, by the desire to reinforce the Qualiflyer Group's Eastern European coverage, which was severely dented by the departure of Austrian Airlines from the alliance. LOT's employees will receive 15% of the airline initially in the privatisation, but it will be reduced to 10% after the SAirGroup investment in the New Year. The state will retain 52% of the airline after the privatisation.

Article ID: 998