British Airways is set to invite loss-making carrier Swiss International Air Lines into its oneworld alliance which includes Aer Lingus, Swiss newspapers have reported.
Citing insider sources, the SonntagsZeitungsaid Swiss chief executive Mr Andre Dose had received an oral invitation to join the airline alliance during talks with British Airways in London last week.
"A written invitation should arrive at Swiss' headquarters in Basel early next week", the newspaper wrote.
Swiss confirmed talks with the British flag carrier but declined to give further details.
"I can confirm talks with British Airways and with other large airlines," said a spokeswoman for Swiss.
Speculation has swirled that Germany's Lufthansa may take a stake in the airline as a way to end the financial woes Swiss blames on weak economies, the war in Iraq and the deadly virus SARS that grounded travellers.
But a German newspaper reported on Thursday that Lufthansa was not considering making a direct investment.
British Airways also confirmed talks with the struggling airline but declined to comment on how the talks went.
Membership in the oneworld alliance has been a key objective for Swiss since it was formed from the collapsed Swissair and regional carrier Crossair.
But in April British Airways dealt a blow to Swiss, saying its priority was its core business and not adding members to the oneworld alliance, which it leads with the American Airlines of the US, the world's largest carrier.
According to the SonntagsZeitung, British Airways' change of heart follows reports that Dutch carrier KLM is likely to chose Air France and not British Airways as an alliance partner.
"The fear that oneworld could slide from second to third place among the airline alliances raised Swiss' attractiveness for British Airways," the newspaper said, citing insider sources.
Global airline groupings such as oneworld, Star Alliance and SkyTeam allow carriers to combine frequent flyer programmes and sell seats on each others' planes, giving customers a greater choice of travel times and destinations.
On Saturday, Swiss said it had discussed seeking creditor protection with the Swiss government but added its board was not currently considering this option.
The Swiss carrier said it has enough cash to get it through 2003, but needed 500 million Swiss francs to fund restructuring which includes slashing around a third of its workforce and fleet and reducing its network by over a quarter.