FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
2001
2001 - 2367.PDF
BUSINESS FINANCIAL CRISIS HERMAN DE WULF / ANTWERP Swissair cuts off Sabena's lifeline With no prospect of cash bail-out, the last hope for ailing Belgian flag carrier could be conversion to regional airline Sabena's outlook worsened in late June when 49.5% shareholder Swissair Group said that it had no intention of investing further in the loss-making Belgian airline. Swissair Group chief executive officer Mario Corti said that his airline had abandoned earlier plans to increase its interest in Sabena to 85% and wants to withdraw from it altogether. The Belgian Govern ment, which owns 50.5%, was ready to supply Sabena with more money to implement a revised business plan provided that Swissair was also willing. Swissair Group argues, however, that the agreement to up its stake, which was ratified in January, was based on the condition of a return to profitability for Sabena. Swissair is due to reveal its own action plan on 12 July, including the future of its Sabena involve ment and other interests. The Belgian Government is des perate to avoid bankruptcy of the national carrier and the loss of 10,000 jobs, but it cannot keep Sabena afloat alone. A unilateral cash injection is likely to be consid ered as a subsidy for the carrier and against European Union rules. Swissair's announcement fol- will run out of money next month. Sabena's dire position prompted discussions in the Belgian Parlia ment and suggestions in the coun try that the airline could be forced to seek a concordat or postpone ment of payments - Belgian equiv alent of US Chapter 11 bankruptcy protection - by July. Belgium's minister for government-owned lowed a request from Sabena management at its 18 June board meeting for another BFrl6 billion ($340 million) from its sharehold ers to salvage the airline. Sabena managing director Christoph Miiller, who has relinquished his Swissair Group responsibilities to concentrate on the Belgian flag car rier, says without the cash Sabena BANKRUPTCY Failing carrier wins extension French airline AOM-Air Liberte has been granted a three-month extension to continue operations by a French court following its fling for bankruptcy. AOM-Air Liberte was forced to file for bankruptcy in mid-June after its prin cipal shareholders, Swissair Group and Marine-Wendel, withdrew support for the loss-making airline and its failure to secure alternative funding. It needed Fr3 billion ($390 million) to finance its restructuring programme, which included 1,300-plus redundancies and a fleet rationalisation. The Tribunal de Commerce de Creteil in Paris is examining the airline's options, but reports suggest it has only enough cash to last until 10 July. French transport minister Jean-Claude Gayssot, keen to avoid the closure of the airline and the loss of 5,100 jobs, has criticised AOM-Air Liberte's shareholders following the carrier's prolonged decline into bankruptcy. "In this type of situation, each shareholder has to play their role fully," he says. Attempts by Swissair Group to persuade 51 %-owner Marine-Wendel to provide a Fr1 billion cash injection were unsuccessful. "We said that we will commit to providing two-thirds of the Fr3 billion required...but it needed Marine-Wendel to jump in," says Swissair. Rescue bids mooted recently include ones from UK-based AITI Holdings and low-cost airline EasyJet. "Despite new [potential] partners, neither Swissair nor Marine-Wendel wanted to participate," says Gayssot. companies, Rik Daems, and Sabena president Fred Chaffart were due to meet with the Court of Commerce in Brussels on 24 June to inform the court of developments. Time is running out for Sabena, which received a BFrlO billion injection earlier this year - BFr4 billion from the government and BFr6 billion from Swissair. Following the board meeting, Sabena president Fred Chaffart said: "A number of scenarios have been studied which led to the con clusion that extra money is needed soon, and that more cuts in costs will be necessary." Options being considered are to: downsize Sabena to a regional car rier centered on its low cost Delta Air Transport (DAT) subsidiary; abandon long-haul routes with the exception of the profitable New York and Kinshasa, Democratic Republic of Congo, services; and increase code sharing. The airline has cancelled an order for 19 Airbus A320 family aircraft, which is likely to cost BFr6 billion in dam ages to the manufacturer. Sabena suffered a BFr 13.3 bil lion loss last year, and indications are that this year's results will be just as bad. ACQUISITIONS No to Mesaba by Northwest Northwest Airlines has with drawn its proposal to acquire the outstanding shares of Mesaba Holdings, parent company of Mesaba Airlines. Northwest holds a 28% stake in Minneapolis-based Mesaba, which operates as a Northwest Airlink carrier, and had proposed the additional stock purchase last November. "Recent developments in the regionaVairline industry have caused lis to re-evaluate our ownership relationships with the regional airlines," says Northwest. AIRLINE CLOSURE PAUL PHELAN / CAIRNS Soaring fuel costs finish FlightWest FlightWest is the latest in a line of Australian shutdowns Australia's last surviving privately- owned airline, Brisbane-based regional FlightWest Airlines, shut down on 19 June when its sole owners, the Buchanan family, placed it in voluntary liquidation. The closure followed Australia's Civil Aviation Safety Authority (CASA) recent issue of a notice requiring the carrier to "show cause" why its operating certificate should not be cancelled or sus pended over alleged breaches. In response, FlightWest had commit ted to making major changes. FlightWest's closure stranded hundreds of passengers at 34 destinations, many of them remote settlements without alternative access. The airline's 400 staff were told FlightWest had succumbed to "an unprecedented chain of events", including a low Australian dollar, sustained high fuel prices and intense competition resulting in plummeting yield. It also told employees that the company's assets exceeded liabilities by A$6 million ($3 million). FlightWest's fleet of Fokker F28-400s, Fokker 100s, Embraer Brasilias and BAe Jetstream 32EPs served major along Queensland's coastal strip. www.flightinternational.com FLIGHT INTERNATIONAL 26 JUNE - 2 JULY 2001 51
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
