Lufthansa, the biggest airline group in Germany, expects its profits to grow on takeover of the loss-making Swiss carrier Swiss International Air Lines. The company received approval from Swiss’s board and the Swiss government.

The deal may form the biggest airline corporation for Europe. The bid will cost Lufthansa between SFr70m and SFr460m ($59m-$390m) depending on the performance of the Lufthansa share price.

"Lufthansa will further expand its position as an internationally leading network carrier by integrating Swiss," the company said in a statement.

The deal is expected to save about 160 million euros for Lufthansa a year beginning in 2007.

Swiss International Air Lines is owned by the Swiss government and cantons, as well as UBS and Credit Suisse banks, and Swiss corporations including Nestlé and Novartis.

Lufthansa suggests that in case there is no special crisis in the current year the operating result will be at least at the same level with the previous year.

In 2004, Lufthansa’s operating profit was at euro383 million (US$501 million).