Lufthansa in talks to take over SAS

Lufthansa is engaged in early-stage discussions with SAS about a take-over of the Scandinavian carrier – a merger that would solidify the German airline’s position as Europe’s second-largest carrier.

The diversified German giant has dealt with fluctuations in operating costs and demand for seats better than most of its competitors. It has also been quite clear that it sees the current period of instability in the airline industry as a good time to find bargains. As carriers throughout Europe struggle with high fuel costs and reduced demand, conditions are ripe for the stronger airlines to buy up floundering rivals.

Speculation about Lufthansa’s talks with SAS saw trading of the Scandinavian carrier’s stock suspended, with the group acknowledging that it was “conducting talks about a possible structural solution” to financial problems that have left aircraft sitting on the ground and have seen staff let go.

Lufthansa has declined to comment on the talks, but industry insiders have said that the carriers have been in contact for a number of weeks. The same sources added, however, that it was still too early to know if the discussions would leave to a near-term takeover of SAS by Lufthansa.

Over the past year, the price of SAS stock has dropped by two-thirds, with the postponement of listing Spanish unit Spanair negatively affecting investor sentiment.

www.flysas.com