Vienna Waltz

Along with a flag and an anthem, the symbols of nationhood all too often include a money-losing national airline. Since 1950, the number of "flag" carriers has proliferated to the point that there are almost as many as there are countries in the U.N. At least one airline is sensibly going against the trend. Tiny Austrian Airlines, which is distinguished by excellent service and frequent deficits, is seeking a shelter under the broad wings of Swissair.

Both airlines are among the pleasantest to fly on--expert pilots, comely stewardesses, gourmet food--but the similarity ends there. Austrian, which is 98% state-owned, has been a losing investment during most of its 13 years of existence and has dropped a total of $40 million. It provides a daily service to New York by leasing half of the cabin of an aircraft flown by Belgium's Sabena. By contrast, Swissair is 70% privately owned, flies to 56 countries and has not lost money since 1949. Last year it earned $7,300,000.

The two carriers are careful not to call their plans a merger. If Austrian Airlines were to disappear entirely, its successor might lose some reciprocal landing rights that Austrian acquired--but never used--when it granted Australia's

Qantas and Russia's Aeroflot access to Vienna. Besides, Swissair might also acquire Austrian Airlines' debts.

Instead of a merger, Austrian and Swissair are negotiating a form of Alpine bundling or, as their executives call it, "harmonization." Swissair would issue more stock and give the Austrian government a 9% share, as well as several seats on a new board of directors. Planes from both countries would be maintained in Austria, where labor is cheaper than in Switzerland. Pilots would be trained on Swissair's flight simulator in Zurich. Sales offices and planes of both lines would bear a single name, possibly "Swissair-Austrian Airlines," but aircraft from each country would still be distinguished by a national emblem on the tails.

Since the Austrian line is an ardent suitor, the canny Swiss are exacting a stiff price. As a dowry, the Austrians would have to supply the combined line with a fleet of nine jets to be bought by AA with a $76 million loan backed by the Vienna'government. A bill guaranteeing the loan has been introduced in the Austrian Parliament, but not yet passed. Once that considerable detail is taken care of, negotiations are expected to move ahead in earnest, and the two lines could begin to practice their special kind of togetherness by April 1972.

This file is automatically generated by a robot program, so reader's discretion is required.