Swiss International Air Lines will enter the Oneworld alliance which includes British Airways and Aer Lingus rather than merge with Germany's Lufthansa, Swiss media reported today.
Zurich's Tages-Anzeigernewspaper and Swiss radio said Swiss's board had opted to stay independent and become a member of Oneworld, an international alliance that offered more chances to boost revenue in an overcrowded and ailing airline sector.
The board was unwilling to hand over the loss-making company to Lufthansa, which co-leads with United Airlines the rival Star Alliance, the world's largest grouping.
Shares in the carrier, formed last year from the ashes of collapsed predecessor Swissair, were suspended at the company's request yesterday until noon today.
The Financial Timesreported the deal calls for British Airways to buy "a significant number" of Swiss's takeoff and landing slots at London's Heathrow airport, which would provide immediate cash for the Swiss group.
The British carrier would take no equity stake or have any financial exposure to Swiss, it said.
Swiss has already cut its fleet and workforce by about a third - laying off some 3,000 people - and pared its route network. But the loss-making carrier is still looking for 500 million Swiss francs ($369.5 million) to help it keep aloft in the highly competitive, overcrowded airline industry.