Lufthansa pays around 269 million Swiss francs (around 172 million euros) for SWISS out-performance option

21 March 2008

Cooperation between SWISS and Lufthansa a success story / Lufthansa share price significantly out-performs that of competitors

Three years to the day since the announced integration of SWISS in the Lufthansa Aviation Group, the former majority shareholders of the Swiss carrier will shortly be receiving the payout for their out-performance option from the German airline. In exchange for their onetime SWISS shares, they will be paid a total of about 269 million Swiss francs (about 172 million euros). The payout level depends on the performance of the Lufthansa share price compared with the share price of a specified group of competitors (British Airways, Air France/KLM, Iberia). In the reference period Lufthansa shares have out-performed the defined basket of shares by 44.67 per cent. The success of SWISS in that period has contributed appreciably to this positive development. The payout formally concludes the transaction between Lufthansa and SWISS announced three years ago.

Together with the some 70 million Swiss francs (around 45 million euros), which Lufthansa paid for about 15 per cent of SWISS equity in 2005, the price for the complete acquisition of the Swiss carrier now amounts to around 339 million Swiss francs (some 217 million euros).

SWISS remains SWISS – with Lufthansa

SWISS connects Switzerland with Europe and the world. The airline is now fulfilling that mission better than ever since its founding. “The ascent of SWISS in the intervening years substantiates the decision taken by the majority shareholders three years ago. The subsequent development of SWISS would not have been possible without the airline’s integration in the Lufthansa Group,” said SWISS CEO Christoph Franz. “At the time, Lufthansa pledged to equip SWISS with two additional long-haul aircraft. The expectations three years ago have been significantly surpassed; the SWISS fleet is already operating with an additional five long-haul and seven mid-range jets. Staffing levels have risen in unison; they were up in 2007 alone by 10 per cent,“ observed the SWISS CEO. “The airline’s growth and the decision to renew the fleet are equivalent in value to several billion Swiss francs.“

Further figures underline the ascent of SWISS since the announcement of its integration three years ago: Passenger numbers have risen by a third to more than 12 million. Capacity utilisation on aircraft in the fleet is up by five percentage points to more than 80 per cent. Capacity in seat kilometres has increased by 14 per cent but has been clearly outpaced by demand. After years of restructuring, capacity has been raised appreciably at the Zurich hub as well as at Basel and Geneva airports. In intercontinental traffic, the number of flights at existing destinations has been increased, wherever possible, to daily frequencies and the Swiss airline’s extensive network expanded with the addition of Delhi and, from 9 May, with Shanghai. Connections this spring were also laid on to St. Petersburg, Florence and Sofia

“SWISS is now a very healthy company and well-positioned as a quality carrier. Its success is founded on the firm commitment of the airline management and the exceptional team performance of all the staff,” emphasised Lufthansa Chairman and CEO Wolfgang Mayrhuber. “The successful partnership between Lufthansa and SWISS is to the good of all: our customers, shareholders, SWISS and its employees, and not least, to Switzerland as an economic base, especially the Zurich hub.”

Further information from:

Deutsche Lufthansa AG
Corporate Communications
Tel. + 49 69 696 – 51014
Fax + 49 69 696 – 95428

Swiss International Air Lines AG
Corporate Communications
Tel. +41 848 773 773
Fax +41 44 564 2127