COPENGHAGEN -- German airline Lufthansa could either merge or take over beleaguered Scandinavian flagship carrier SAS, a spokesman for the International Air Transport Association (IATA) told the Danish daily *****Politiken***** on Friday.

"I think it is simply a matter of time before we see something which resembles a merger between Lufthansa and SAS. This could take place in about two years," IATA spokesman William Gaillard said.

In Frankfurt, Lufthansa denied there were any such plans in the pipeline.

"These sort of ideas are clearly in play, but we're not playing them," said Lufthansa spokesman Michael Lamberty.

So far, the German flag carrier was perfectly happy with the way its star alliance, of which SAS was also a member, functioned.

The alliance allows partner airlines to cooperate in the areas of code-sharing and frequent flyer programs without any economic obligations.

SAS had said Thursday it was cutting 4,000 jobs and announced a savings package of between six and eight billion kronor (656-875 million euros, 695-927 billion dollars) to take full effect within 18 months.

The group has previously announced its aim to return to profitability by 2005, and is already implementing two other restructuring programs with a total earnings effect of 12.8 billion kronor before 2005.

The IATA spokesman said there were too many airlines for the amount of passengers, noting that there were 15 large competing carriers in Europe.

"The airline industry is the only industry in the world that has not undergone a wave of mergers and it needs to go through that process, a process in which a lot of national companies will lose their independence," he said.

Analyst Mark Bayley from JP Morgan Investment Bank in London agreed, saying: "There are too many national companies in Europe right now, and we have to expect some mergers in the years to come".

He said he believed that only British Airways, Air France, Lufthansa and KLM would still be around in five years' time, expressing strong doubts that SAS would survive as an independent company.

SAS Chief Executive Joergen Lindegaard rejected any speculation of a merger when he presented the restructuring plan on Thursday. "There is a lot of talk about there only being room for the big companies. But we think we have found another way by reuniting a series of different companies within our group, such as Braathens and Wideroe (in Norway), Spanair (in Spain) and Air Botnia (in Finland)," he said. (AFP)