Sabena chief executive Paul Reutlinger has denied growing speculation that Swissair is preparing to pull out from the alliance with its struggling Belgian partner if the carrier's unions fail to agree on new working conditions and wage structures.

Rumours of a possible pull-out were revived by confirmation that the Swissair board has authorised the airline's management to write down its BFr6 billion ($180 million) investment in Sabena in the second quarter of this year. "This does not mean that Swissair is pulling out. It is simply an accounting measure," says Reutlinger, adding that it was merely to clean up the Swissair balance sheet.

Sabena is expected to return record losses of around BFr2-3 billion in 1996, and the management is still fighting to improve its performance in the face of union suspicion. Reutlinger claims, how- ever, that relations between management and unions are "improving", although sources admit that the airline faces a considerable uphill task.

Speaking at the European Aviation Club in Brussels on 21 January, Reutlinger predicted that the airline was on course to achieve the target, set out by Swissair, of a return to profits by 1999. He outlines five main objectives:

- a reduction in costs to BFr27 per tonne kilometre, down from BFr32 today;

- an increase in load factors to 57% on European markets and 67%elsewhere on the network - current loads stand at a low of just 52% in Europe;

- a rise in the proportion of business traffic from 32% to 37%;

- a reduction in connecting time to an average of 27min;

- an improvement in punctuality by 1998, to take the carrier from fifth to third in the league of major European carriers.

Efforts will also be made to return to the Far Eastern market from which the airline all but withdrew in 1991. "That was the right decision at the time, but we all know that is where the action is, and we must be a part of that," says Reutlinger.

The Sabena chief adds that he is "-absolutely convinced that if we take the right management decisions we have a good chance of surviving and succeeding".

Source: Flight International