Herman de Wulf/BRUSSELS

SABENA'S NEW president, Paul Reutlinger, has warned staff that the ailing carrier needs to shave billions of Belgian francs from its cost base.

Reutlinger, who joined Sabena from Swissair after Pierre Godfroid's resignation, says that the carrier needs to make annual savings of BFr4.7 billion ($154 million) and warns that the figure is growing. By 2000, it will need to be cutting costs by BFr6.7 billion, he told employees at a 23 April meeting.

Making a plea for co-operation with the workforce, to replace the bitter union confrontation which eventually ousted his predecessor, he pledges that "...management will find part of the savings", but says that the bulk must come from "a reduction of structural costs". He says that the dismissal of 1,700 employees, or greater job flexibility, is required - ideas vehemently opposed by the air-transport unions.

Reutlinger says that, while Sabena has added capacity over the past five years, profits have sunk because of falling yields, weak load factors and a poor fleet mix. He says that the target is now to achieve a "slight" increase in loads while attempting to hold costs steady.

Swissair, which holds a 49.5% stake in the Belgian carrier, is in the middle of its own tough restructuring, and has set a target of 1998 for turning round Sabena's losses. Swissair's management team argues that the Belgian airline is on schedule to achieve this, barring further strikes, which cost the airline an estimated BFr900 million in 1995.

Privately, however, some within the Swiss airline admit that the state of Sabena has proved worse than feared and that moves towards greater operational integration are being held up by a mismatch between the service levels of the airlines. The issue is complicated by Switzerland's inability to secure a transport deal with the European Union which would give it greater freedom in operating within the European air market.

Source: Flight International