Swiss airline in alliance talks only with Oneworld

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ZURICH, March 18 (Reuters) - The new Swiss national airline is holding
alliance talks only with Oneworld, having ended discussions with the other
two global airline groupings, industry executives said on Monday.

Swiss is the brand name of the company which is due to take off on March 31
to fly two-thirds of the destinations previously operated by failed flag
carrier Swissair (SWSZn) as well as continuing its short and medium-haul
services previously flown by predecessor Crossair (CROZn).

Its choice of the Oneworld alliance grouping led by British Airways Plc
(BAY) and AMR Corp's (AMR) American Airlines is expected to be made public
at a March 26 news conference in Zurich.


A Oneworld linkup would mean an extension of the transatlantic ties that
existed between the two Swiss airlines and American. But it is unclear to
what extent the dissolving Qualiflyer alliance -- Swissair's attempt to lead
a fourth global grouping -- would be integrated into Oneworld.

A spokesman for Lufthansa (LHAG), part of the rival Star Alliance grouping,
told Reuters: "There are no talks any more between the Star Alliance and
Swiss/Crossair."

An industry source said SkyTeam saw only limited advantages to Swiss's
membership and was not interested.

Oneworld spokesman Michael Blunt said: "We cannot comment on any talks we
may have with potential alliance members."

A Crossair spokesman said: "The talks are being held at the highest level
and we are making no comment on their progress."

In Paris, a spokeswoman at Air France (AIRF) said it was up to Swiss to say
whether or not there were talks about the Swiss airline joining its SkyTeam
alliance.


ONEWORLD

Oneworld is an alliance of eight airlines: American, British Airways, Aer
Lingus [AERL.UL], Cathay Pacific Airways Ltd (0293), Iberia (IBLA), Finnair
(FIA1S), LanChile (LAN) and Qantas (QAN).

The Qualiflyer alliance, started in 1998, currently only exists as a
frequent flyer programme while all members are reviewing their options for
the future.

It is a mixed bag of companies working under financial strains such as DAT
Belgian Airlines, which is the successor to failed Belgian carrier Sabena;
LOT Polish Airlines [LOT.UL]; Portugalia Airlines, TAP-Air Portugal
[TAPA.UL], and Volare.

Swiss Chairman Piet Bouw last week told a business meeting that the
advantages of working with Star were less than those of cooperating with
SkyTeam and Oneworld.

He added the potential for cooperation with American was a little bit
greater than with Delta Air Lines Inc (DAL), "but substantially larger than
working together with United Airlines (UAL)."


LIMITED ADVANTAGES FOR SKYTEAM Star Alliance includes Germany's Lufthansa,
Scandinavian Airlines System(SAS), British Midland Airways [BMID.UL],
Austrian Airlines (AUAV), Lauda (LAUV) and Tyrolean.

In North America it has UAL Corp (UAL) unit United Airlines and Air Canada
(SIAL), Thai Airways (THAI), Air New Zealand Ltd (AIRVA) and Ansett
Australia [ATI.UL].

In Latin America it has Varig (VAGV3) and Mexicana.

The SkyTeam involves Air France, Delta Air Lines, Alitalia (AZPIa), Korean
Air (03490), Aero Mexico and Czech Airlines.

A number of major airlines are not fully allied yet, such as KLM (KLM) and
its transatlantic partner Northwest Airlines Corp (NWAC).

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