The deal may save Swiss

Swiss said its customers would "benefit from this development in the form of a substantially expanded range of services".

The agreement will give BA access to Swiss take-off and landing slots at London's Heathrow airport, Swiss said.

BA will also back a financial bail-out for Swiss in the form of a credit facility worth 50m Swiss francs ($37m; �22.4m) which will be secured against the slots.

Survival measure

The Swiss airline's decision to join the Oneworld alliance puts an end to speculation that it might merge with Germany's Lufthansa, a tie-up that aviation analysts thought would probably have meant the end of Swiss as a separate airline.

Signing up to Oneworld keeps loss-making Swiss independent, there are still questions as to whether the company will survive in an overcrowded, highly competitive marketplace.

Swiss chief executive Andre Dose said on Tuesday that the loss-making airline plans to return to profit in 2005.

Following the tie-up, two major Swiss banks, UBS and Credit Suisse, have said they are willing to offer further loan facilities to Swiss, the airline said.

Swiss International was formed out of the collapse of Swissair in late 2001. The group was restructed under the management of its one-time regional subsidiary Crossair.

The failure of Swissair provoked a sense of national trauma in Switzerland.

Ailing Swiss

The Swiss government stepped in to broker a survival package. It persuaded the airline's banks to extend fresh loans and Swiss firms to give up tax concessions so funds could be diverted to the airline.

But Swiss International's business has not gone well since then, and in June 2003 the airline announced it would shed 34 aircraft - one third of its planes - in an effort to save 1.6bn Swiss francs ($1.21bn; �725m).

It said it was dropping one third of its routes to streamline the business, and plans to cease flying to Washington DC, Beijing or Rio de Janeiro.

The plan also included 3,000 job cuts in the company's 9,000 strong workforce.

Swiss racked up a net loss of 333m Swiss francs ($240m; �149m) in the first half of 2002.