Lufthansa Wants Swiss

The merger would cost Lufthansa between up to €60 million ($80.7 million), Reuters news agency reported, citing sources close to the negotiations.

Lufthansa officials said that both companies still have to get approval from their boards for business models to integrate the two airlines.

The German carrier will be able to make an offer for freely traded Swiss shares once this has happened, officials said, adding that the offer will be in line with the average share value during the last few weeks.

The proposed merger would not do away with Swiss, Lufthansa officials said.

"The joint business plan aims to combine forces while keeping Swiss independent as far as possible," read a Lufthansa statement, according to DPA news service.

Swiss' main shareholders will be informed about the plans on Monday, according to newspaper reports. The Swiss government has been supportive of a Lufthansa takeover after plans to join British Airways Oneworld alliance failed in 2003.

Swiss has been struggling for years: Its predecessor, Swissair, went bankrupt in 2001 and Swiss was resurrected with financial help from the government and private industry. Despite massive layoffs and restructuring measures, the airline still lost 140 million Swiss francs (€90.3 million, $121.6 million) in 2004.