FRANKFURT - The operating profits of German flag carrier Lufthansa will stagnate this year owing to the buyout of its ailing partner Swiss International Air Lines, Lufthansa CEO Wolfgang Mayrhuber said on Wednesday.
Mayrhuber told reporters in Frankfurt that Lufthansa's profits in 2005 would remain "at the same level" as the 383 million euros (500 million dollars) recorded in 2004.
The German company had an operating profit of 36 million euros in 2003.
The merger with Swiss, announced on Tuesday, will generate one-off costs of 101 million euros, while it will generate expected annual synergies of 165 million euros from 2008, he said.
Lufthansa shares opened lower in early trading in Frankfurt on Wednesday but then began to rise steadily.
The two companies revealed publicly for the first time on March 14 that they were in "constructive" takeover talks, following months of speculation about secret meetings between company executives.
Analysts have predicted that the deal should speed up consolidation in the European airline industry as more older carriers join forces to compete against low-cost competition.
03/23/2005 10:51 GMT