Brussels airport IPO slips amid Sabena turmoil

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Belgium is delaying the initial public offering of Brussels International Airport Company (BIAC) from 2001 to next year citing poor market conditions and the uncertainty over the future of flag-carrier Sabena.

A spokesman for BIAC comments: “It is very likely that the IPO will be postponed until next year. It will depend on a number of issues - the stock market situation is unfavourable and the problems with the national carrier. The outcome of the Sabena strategy will influence the date of the IPO.”

The offering had originally been scheduled to take place this year and had been part of the Government’s plans since it formed the company in 1998. The Belgian Government owns a 63.56% stake in BIAC with the remaining 36.44% shares being held by Belgian companies. Merrill Lynch is acting as financial advisors for the Belgian Government on the privatisation.

The financial crisis at Sabena is a serious issue for BIAC which relies on the airline for more than 50% of the traffic at Brussels National Airport. The spokesman continues: “If something drastic happens to this carrier it will have an effect on our revenue.”

The BIAC spokesman says that the airport’s traffic has been hit hard by the problems at Sabena but say that there are greater contributing factors to a fall in traffic growth to zero at the airport. He says: “There are two main reasons [for the zero traffic growth] - the general slowdown in the country as well as the outbreak of foot and mouth disease. The problems with Sabena did not help to push growth. If we had a strong carrier here we would phase the slowdown.”

Over the past two years Brussels has seen passenger traffic growth rise by 8% annual, while before that in 1998 and 1997 passenger traffic growth hovered at 14%. Brussels National airport serve 21.6 million passengers last year.